The receiver overseeing disgraced Victoria mortgage broker Greg Martel’s bankruptcy painted a bleak picture in a report released this week for investors who are out more than $295 million.
Based on what the receiver has been able to recover so far, it appears none of the 860 investors who lodged claims with the receivership for money invested in Martel’s bridge-loan schemes will receive any kind of financial return.
The year-end update of PricewaterhouseCoopers’ activities to track down the money investors entrusted with Martel shows the receivership remains underfunded and money received to date will not even cover PWC’s costs.
The report notes PWC is owed more than $1 million in professional fees so far.
In an unusual move for a receiver, Pricewaterhouse has agreed to continue its work until an analysis that shows where all of the money went has been completed.
“In order to complete [the analysis] for the benefit of investors, PWC has assumed the risk that the recoveries may be insufficient to cover its fees,” the company wrote in the report.
The analysis, which is being done to determine if the bridge loans ever existed and if there is money sitting in an account somewhere that could offset the investors’ losses, will track more than 50,000 transactions through 40-plus accounts at various financial institutions.
Those transactions represent more than $295 million invested into the short-term loan investments Martel had been offering.
To date the receiver has found no proof the loans ever existed.
Pricewaterhouse believes there are other investors who have not yet come forward and anticipates more than 1,300 investors could be tied up in the scheme, which it estimates involves nearly $300 million.
To date, the receiver has recovered only a tiny fraction of that.
The year-end report notes the sale of two of Martel’s properties netted only $192,304.
The sale of an Ontario property co-owned with ex-wife Lesley Martel brought in just $82,698, while the recent sale of a home in Langford – sold for $2.47 million — netted only $109,606 after the mortgage was paid out.
The receiver expects the sale of a Las Vegas property for just over $5 million US could net the receivership just over $1 million after its mortgage is discharged.
The receiver, which has been investigating Martel’s affairs since May, has managed to find only about $300,000 in cash as Martel has refused to co-operate.
It is still pursuing payments Martel made to some investors just ahead of the bankruptcy proceedings, including $2.3 million paid to Laurel Rayani.
Martel’s current whereabouts are unknown to the receiver, though PWC says it learned he had been exiled from Thailand after Aug. 30, at which point he travelled to Dubai.
Warrants for Martel’s arrest have been issued in both Canada and the U.S.
The B.C. Securities Commission is also investigating.
