Two real estate developers were found guilty Wednesday of defrauding thousands of investors out of retirement savings in what prosecutors called one of Canada’s largest mortgage fraud schemes.
Ontario Court Justice Daniel Moore convicted Jawad Rathore and Vince Petrozza, co-founders of Fortress Real Developments, of fraud in connection with syndicated mortgage investments that raised $920 million from more than 14,000 investors.
“I find beyond a reasonable doubt that they both intentionally misled investors about the value of their secured interest in order to induce them into investing,” Moore said in delivering his verdict.
The scheme focused on two failed projects: a planned 45-story condo tower in Winnipeg called SkyCity and the Collier Centre in Barrie, Ontario. Both projects never materialized despite years of fundraising.
Prosecutors argued the men used inflated property valuations to calculate loan-to-value ratios while concealing actual appraisals that showed much lower values. The investments were promoted to retail investors as low-risk opportunities.
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RCMP’s Integrated Market Enforcement Team launched an investigation in 2015, raided company offices in 2018, and filed criminal charges four years later.
Victims of Syndicated Mortgage Investments, a group representing investors, estimates total losses at $416.7 million. Many investors were retirees who lost their life savings.
The fraud conviction carries a maximum 14-year prison term. Given the scale of losses, both men face at least two years behind bars. A sentencing hearing will occur next month.
The verdict concludes a trial that began in October 2024, bringing some closure to thousands of investors who trusted the developers with their retirement funds.
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