Skip to content
Fortress Real Developments founders charged with fraud

The two co-founders of mortgage syndication firm Fortress Real Developments Inc. have been charged with fraud after a years-long investigation by the RCMP.

Ex-CEO Jawad Rathore and ex-COO Vince Petrozza have each been charged with one count of fraud and one count of secret commission bid, the RCMP announced this week.

Details of the allegations against Rathore and Petrozza were not provided by the RCMP.

Lawyers for Rathore and Petrozza said their clients had sworn to fight the charges.

“Mr. Petrozza has cooperated with the RCMP throughout their investigation and he is surprised and disappointed that they have decided to press charges. We are confident that when the evidence comes to light, it will show that there is no “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 attorney.

“This was a flawed investigation, dogged by tunnel vision from the start. There is no reasonable prospect of conviction. We look forward to establishing Mr. Rathore’s innocence,” the statement said. Rathore’s attorney, Scott K. Fenton.

Fortress was one of the first companies in Canada to offer retail investors the opportunity to invest in syndicated mortgages. A syndicated mortgage involves a group of investors pooling their money to lend to developers or landlords.

In 2018, the RCMP raided Fortress’s office amid complaints from investors that the company had failed to adequately explain the risk of their investments.

The investigation was conducted by the RCMP’s Integrated Market Enforcement Team, a specialized unit made up of police officers, lawyers and accountants who work in conjunction with securities regulators and law enforcement agencies. provincial police to fight crime in the financial markets. IMET was established in 2003. In 2015, its Toronto division moved to the headquarters of the Ontario Securities Commission.

Some Fortress-funded property developments ended up going bankrupt, costing investors millions, according to a 2016 Star article.

Among the projects Fortress financed were the Mady Collier Center condo development in Barrie, which won court protection from creditors in 2015; the project owed $50 million to creditors at the time, most of it owed to Laurentian Bank. Investors in the project had been told in a sales pitch that they would earn an annual return of eight percent.

Court documents have revealed that of the $16.9 million raised from hundreds of individual investors for the Mady Collier Center, more than a third was spent on marketing and promotion costs, mortgage broker fees and to something called co-development/priority returns, according to a 2016 Star article.

Syndicated mortgages were generally reserved for institutional investors or experienced real estate investors, Fortress offered ordinary consumers the opportunity to invest their money.


Conversations are the opinions of our readers and are subject to the Code of conduct. The Star does not share these opinions.