The receiver overseeing disgraced Victoria mortgage broker Greg Martel’s bankruptcy has been given the green light to sell Martel’s Las Vegas home for $5.1 million US.
According to PricewaterhouseCoopers, the U.S. courts this week issued an order authorizing the trustee to sell the property to the family that has been living in it over the past year.
While the sale price might appear impressive for a home Martel bought for $4.8 million US in 2022, it will likely mean little to the hundreds of investors and creditors who claim Martel owes them $295 million.
According to PWC, the home has a mortgage of $3.84 million US, which means Martel’s estate will see just over $1.2 million US from the sale.
In a year-end update of the bankruptcy proceedings, PWC warned investors and creditors that based on what the receiver has been able to recover so far, none of the 860 who lodged claims with the receivership for money invested in Martel’s bridge-loan schemes will receive any kind of financial return.
The update stressed 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.
The sale of the Las Vegas home could cover some of that bill.
The property at 28 Quiet Moon Lane will be sold to Kirk and Janette Mendez. Kirk Mendez had signed a lease agreement, with an option to purchase, with Martel for the property in February last year.
Mendez agreed to pay $27,500 per month to lease the property. According to court documents, Mendez paid up front covering the period until February 2024. Martel appears to have absconded with the money.
The sale of the property, expected to close Jan. 31, was complicated by the fact Martel had transferred title to a group of creditors led by Dan Castellini.
In an affidavit filed with the courts, PWC Canada partner Neil Bunker said the creditor group, which claimed Martel owed them more than $2 million, paid an investigator to find Martel.
Bunker said once Martel was located in Thailand, Castellini cut a deal with him and Martel transferred the deeds to two Tesla vehicles, a large amount of cash and Martel’s Las Vegas property to him.
The U.S. courts then ruled Castellini could not dispose of any assets received from Martel and granted control of the property to PWC.
To make the sale of the Las Vegas home simple, PWC has entered into an agreement with Castellini.
PWC will pay Castellini $28,000 US to cover costs incurred investigating Martel, while Castellini must transfer title of the home to Mendez and co-operate with PWC to discover and recover assets that may belong to the estate.
Castellini will also put PWC in touch with the investigator that tracked down Martel and provide whatever information he can on Martel’s whereabouts.
The proceeds of the sale will go to PWC, which will then pay out the mortgage and the $28,000 fee to Castellini
“The settlement agreement paves the way for an efficient and value-maximizing sale of the Las Vegas property,” said Bunker in a statement filed with the courts, noting it allows them to avoid any further litigation and costs, while saving money on the interest owed on the mortgage.
Bunker said he believes Castellini has important knowledge regarding debtors that will be invaluable to PWC in maximizing the value of the estate for creditors and defrauded investors.
Pricewaterhouse continues to work on an analysis of where the money went.
The analysis, which is being done to determine if the bridge loans ever existed and if there is money sitting in an account 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 in 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 could be tied up in the scheme, which it estimates involves nearly $300 million.
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 Canada and the U.S.
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