The B.C. Supreme Court has dismissed an application from a group of investors to adjourn proceedings against them.
The group, who are among victims of a $300 million Ponzi scheme run by Victoria mortgage broker Greg Martel, are part of a group of 561 investors considered “winners” by the trustee overseeing Martel’s bankruptcy.
They are subject to “clawback” proceedings by PricewaterhouseCoopers, the trustee, as it seeks to have more than $71 million paid back into Martel’s estate.
The court did not provide reasons for the decision.
The group had been seeking the adjournment claiming there would be procedural issues that could affect as many as 561 of Martel’s investors and that they have not had enough time to investigate the claims of the trustee overseeing Martel’s bankruptcy.
Earlier this year PricewaterhouseCooper sought a court order to have more than $71 million paid back so it could be more equitably redistributed to the broader investor group of more than 1,700 people.
The trustee claims the money was either excess funds or preferential payments, the result of Martel and My Mortgage Auction Corp.’s fraudulent activities.
The trustee’s funds-flow analysis of Martel’s activities determined where more than $300 million in investor money went after it had been entrusted with Martel and My Mortgage Auction — the vehicle through which Martel took investor money with the promise that funds would be used to provide short-term loans for real estate transactions and construction.
The analysis, which took the better part of a year and analyzed 65,000 banking transactions involving 33 banks and credit instruments, concluded no bridge loans ever existed. Martel was running a massive Ponzi scheme: funds received from investors were used to pay other investors, while some of the money was used to fuel Martel’s lifestyle.
The funds-flow analysis showed 1,709 investors put $301 million into My Mortgage Auction Corp. and $210 million was returned to investors, and the trustee separated them into winners and losers.
There were 480 winners, who received $68.25 million more than they invested, and 1,229 losers, who lost $149 million. The trustee identified another 81 investors who received payments totalling $3.12 million from Martel between March and June 2023.
Another group of investors has filed suit against the Royal Bank of Canada and B.C. Financial Services Authority for failure to protect investors.
Dustin Frank Renz, David Cumby and Andrew Todd Wilson have filed suit against the bank and the agency that oversees financial services in B.C., alleging they did not do enough to curtail Martel’s activities and reduce the losses experienced by investors.
The three men are hoping to have the lawsuit declared a class action on behalf of 1,229 investors who lost an estimated $149 million.
