Canadians who lost millions of dollars investing in syndicated mortgages attached to a series of failed development projects are calling on the federal government to take white-collar crime more seriously and conduct a property inquiry into Fortress Real Developments.
Launched by a group called 'Victims of Syndicated Mortgage Investments', the petition calls for an independent forensic financial inquiry into the millions raised from 14,000 investors across the country involving about 50 developments nationwide between 2008 and 2018
“The petition is designed to bring awareness to financial fraud in Canada,” said Rose Ray of Oro-Medonte Township. She lost money in the Fortress scheme. “It is one of the crimes that causes so much havoc in Canadians’ lives, but it is the least recognized.
“You can rob a store and get into more trouble than when you rob 14,000 people of their life savings.”
Fortress Real Developments used money raised through syndicated mortgages to finance dozens of real estate developments across the country. Court documents have shown that many of those projects have ultimately failed.
One of the largest was Collier Centre in downtown Barrie, a residential, office and commercial complex across from city hall which was initiated by Mady Development.
When Mady went bankrupt during construction, Fortress assumed ownership. In 2018, Fortress defaulted on its first mortgage and Morrison Financial Realty Corporation eventually took it over and finished construction.
The project has long been completed and the adjoining condos occupied while the current owner continues to work on a plan for the office and commercial space.
In Barrie, 949 investors lost everything they invested in Collier Centre, adding up to a combined $53 million.
According to the Financial Services Regulatory Authority of Ontario, which issued a $250,000 fine against Fortress in September, Fortress helped mortgage brokers raise more than $900 million in syndicated mortgage loans to help fund real estate development costs.
Ray lost “a nice chunk” of money investing in several of those projects.
Working in financial services, she found the promised annual eight per cent return good, but not too good. And the deal seemed to check all the boxes — there was a developer in place building and millions had already been raised.
Some of her family members and clients also put substantial sums into the deal.
She’s hoping the petition will bring attention to financial fraud, white-collar crime and the need to hold the companies and their principals accountable.
“We should be trying to stop it from happening to other people,” she said.
Barrie-Springwater-Oro-Medonte MP Doug Shipley is sponsoring the bill and presenting it to cabinet.
“I’ve had calls… from people who have lost their life savings. It’s heartbreaking,” he said. “They (investors) are right across the country. It’s affected a lot of people.”
Through the petition, the investors also want to see increased communication across all financial regulators in Canada, tougher jail sentences for fraud over $1million under the Standing Up For White Collar Crime Act, and increased funding for the RCMP Integrated Market Enforcement Teams so they have sufficient funding and resources to continue the investigation into the Fortress affair.
The e-petition is being loaded Feb. 19 via the House of Commons petition platform. To see the petition before Friday’s deadline, click here.