Financiers Sentenced to 5 Years, $12M Fines for Winnipeg, Barrie Fraud
Two financiers have received sentences of five years each for defrauding investors in projects located in Winnipeg and Barrie, Ontario. Jawad Rathore, aged 49, and Vince Petrozza, 50, were executives at Fortress Real Developments Inc., a Toronto-based mortgage company that collapsed. They were convicted of defrauding nearly 800 investors out of a total of $33.1 million.
Key Facts of the Case
The Ontario Court of Justice delivered the ruling in May, highlighting the serious financial misconduct involved. The executives were found guilty of creating a scheme that resulted in significant losses for investors.
Projects Involved
- SkyCity: A proposed 45-storey condo tower in downtown Winnipeg.
- Collier Centre: A mixed-use development project in Barrie, Ontario.
Sentencing Overview
Each financier was sentenced to five years in prison and ordered to pay fines of $12.2 million. If they fail to pay these fines within ten years of release, they could each face an additional five years in jail.
Impact on Victims
The fraudulent activities primarily targeted everyday investors. Many victims suffered severe financial losses and psychological harm. Some even reported significant deterioration in their mental and physical health as a result of the deception.
Legal Context
Syndicated mortgages are designed to pool resources from investors for development projects, using the property as collateral. In this case, the mortgages were revealed to be overleveraged by as much as 300%, jeopardizing the principal investments and confirming the risky nature of the scheme.
Background of the Defendants
Both Rathore and Petrozza have no prior criminal records and have demonstrated potential for rehabilitation. Rathore has a family, including six children, while Petrozza also supports his family and elderly relatives. Although the judge acknowledged their community ties, he noted the lack of visible remorse for their actions.
The Crown had initially sought longer sentences of ten years, reflecting the severity of the fraud and its far-reaching effects on many investors. The court’s ruling underscores the serious consequences of financial misconduct in the real estate sector.
