Co-founders of mortgage syndication company accused of not adequately disclosing risks to investors.
The two co-founders of mortgage syndication company Fortress Real Developments Inc. have been charged with fraud after a years-long RCMP investigation.
Ex-CEO Jawad Rathore and ex-COO Vince Petrozza were each charged with one count of fraud and one count of offering a secret commission, the RCMP announced this week.
Details of the allegations against Rathore and Petrozza weren’t provided by the RCMP.
Lawyers for Rathore and Petrozza said their clients vowed to fight the charges.
“Mr. Petrozza engaged with the RCMP throughout their investigation and he is surprised and disappointed that they decided to lay charges. We are confident that when the evidence is revealed, it will show there was no fraud or secrecy. Mr. Petrozza is innocent of the charges and we look forward to his day in court,” said Gerald Chan, Petrozza’s lawyer.
“This was a flawed investigation dogged by tunnel vision from the outset. There is no reasonable prospect of a conviction. We look forward to establishing Mr. Rathore’s innocence,” said Rathore’s lawyer Scott K. Fenton.
Fortress was one of the first companies in Canada to offer retail investors the ability to invest in syndicated mortgages. A syndicated mortgage involves a group of investors pooling their money to lend to developers or homeowners.
In 2018, the RCMP raided Fortress’s office amidst complaints from investors that the company hadn’t adequately explained the risk of their investments.
Josh Rubin – The Star – 2022-06-22.
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