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The trustee appointed to manage the bankruptcies of a Victoria mortgage company and its owner has concluded that they committed “numerous offences” and operated as a “massive Ponzi scheme.”
PricewaterhouseCoopers shared these conclusions in a document submitted to the B.C. Supreme Court and the federal Office of the Superintendent of Bankruptcy this week. The document, known as a “Section 170 Report,” details the trustee’s reasons for opposing the discharge of Greg Martel from bankruptcy.
It also indicates that more than 930 creditors have come forward to claim Martel and his company My Mortgage Auction Corp. owe them a total of more than $317 million.
Martel operated MMAC under the name “Shop Your Own Mortgage.” Last year, he and the company became the subject of multiple lawsuits from parties claiming millions of dollars owed to them.
MMAC was placed in receivership last May, and PwC was appointed its bankruptcy trustee in June. An MMAC investor obtained a bankruptcy order against Martel on Aug. 31, 2023, and PwC was appointed trustee of the personal bankruptcy as well.
Martel’s personal bankruptcy stems from the fact that he personally guaranteed investments and loans made to MMAC. While bankrupt individuals are often eligible for automatic discharge from bankruptcy after nine months, PwC filed its report to oppose discharge in Martel’s case.
According to PwC’s report, Martel has failed to perform “specific duties” required of him as part of the bankruptcy proceeding, including turning over documents and property and communicating with the trustee.
“Martel left Canada sometime before the commencement of the receivership of MMAC and the trustee was aware that he resided in Thailand until Aug. 31, 2023, when he was deported from Thailand and travelled to Dubai, UAE,” the document reads. “Since the commencement of MMAC’s receivership and subsequent bankruptcy, Martel refused to co-operate with the receiver/trustee.”
In addition to failing to perform his duties, Martel has also committed offences under the federal Bankruptcy and Insolvency Act, according to PwC.
As listed in the PwC report, those offences include:
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Fraudulent disposition of property; -
Material omission in a statement or accounting; -
Concealing documents affecting the state of the bankrupt’s affairs; -
Obtaining credit or property by false representations; -
And fraudulently concealing any property of a value of $50 or more
While the trustee’s report indicates that Martel “raised over $270 million from investors on false pretenses” and creditors’ claims against him and MMAC total more than $317 million, it also indicates that his current assets are worth less than 50 cents for every dollar of his liabilities.
“The trustee does not view this as beyond Martel’s control,” the document reads, before noting the former mortgage broker’s “unjustifiable extravagance in living.”
According to PwC, Martel and MMAC spent the following amounts, “at a minimum,” between 2018 and 2023:
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$3.1 million on travel (including private plane charters, commercial airfares, ferries, ride hailing, and accommodations) -
$3.1 million on vehicles (including acquisitions and leasing costs) -
$1.1 million on rent for multiple homes -
$261,000 on restaurant meals and events -
$200,000 on watches and jewelry -
$150,000 on recreation (including movie tickets, massages, and vacation resorts) -
$59,000 on “fitness/sports” (including sporting goods and greens fees) -
And $50,000 on wine and vineyard events
The B.C. Financial Services Authority suspended Martel’s licence to practise as a mortgage broker last year, citing evidence indicating he and the company had “conducted business in a manner prejudicial to the public interest.”
The PwC report indicates that the B.C. Securities Commission and the Victoria Police Department are also investigating Martel.
“The trustee does not expect that the investors will receive any recovery from the bankruptcy estates of Martel or MMAC,” the report concludes.