Missing millions and distraught investors: Case involving B.C. mortgage broker heads back to court

"Everybody's going to get paid."

Those words have been spoken more than once by Greg Martel, the Victoria mortgage broker, who has been accused of running his business like a Ponzi scheme and who owes over $226 million to hundreds of people who bought investments that — according to documents — may not have actually existed.

Martel is the sole director of My Mortgage Auction Corp. (MMAC), which did business as Shop Your Own Mortgage (SYOM). Chief among creditors is an investor identified as 1548199 Alberta Ltd., who claims in a civil suit to be owed a staggering $17.6 million. Two weeks ago, MMAC and Martel were placed into court-appointed receivership overseen by PricewaterhouseCoopers.

Last week at a virtual town hall for investors, PwC vice president Neil Bunker delivered sobering news to the 500 people tuning in: not only are Martel's whereabouts uncertain, investigators have yet to locate the missing millions or proof the investments were real.

The big mess of a case returns to B.C. Supreme Court in Vancouver for a two-day hearing starting Wednesday. Earlier court dates have taken place ex parte, meaning without Martel's participation or legal representation, although Vancouver lawyer Ritchie Clark told the court last week he was in the process of being retained by Martel.

So, just who is Greg Martel? And how did he come to owe so many people so much money?

Friends telling friends ...

CBC spoke to five investors, four of whom didn't want to be named. All said they heard about Martel from a friend who had made money, which gave them confidence. 

Single mother Gayle Morrell said she learned of Martel from a friend whose accredited financial planner recommended investing with him. 

Morrell said she worked hard for two years to scrape together $25,000 to invest. At first, it all seemed good. She watched her money grow to over $80,000 and had recently requested to withdraw the original deposit so she could build a free-standing roof over the RV she lives in with her son.

Now she doubts she'll ever see a penny of her money.

"It was interesting how [investing] changed the way I thought about finances. I kind of thought I was in some rich boys club ... I like, squeaked in, and this is how people with a lot of money make money," she said. "And now that it's all gone, it's like, crap, back to reality."

When bank interest rates were low — one or two per cent annually — Martel was offering annualized rates of between 50 and 100 percent for investments in bridge loans.

Essentially, he was acting as a private bank  — pooling investor money and loaning it out for terms of four, eight, 12 and 16 weeks at high interest to real estate projects needing short-term bridge financing. At least, that's what he claimed he was doing. PwC said on Friday it has yet to find documentation indicating the identity of any of Martel's bridge loan recipients. 

Investors told CBC they were encouraged to keep their money rolling into new investments when one came due. They said the Shop Your Own Mortgage online portal made depositing money and reinvesting simple, and it was exciting to watch your balance tick up in multiples of what could be earned in a TFSA or RRSP. 

As interest rates climbed, so did the returns promised by Martel — according to court documents, as high as 25 per cent for a fixed term of 10 weeks, equal to an annualized rate of 130 per cent. 

The largest single investment described in the 1548199 Alberta Ltd. lawsuit is $4.675 million for a 10 weeks term at 17 per cent interest. When the investment came due on Nov. 16, 2022, it was supposed to pay out almost $800,000 in interest on top of the principal.

Unlike the Alberta numbered company, investors CBC spoke to did not have millions tied up in the scheme. Like Morrell, they describe investing their nest egg, retirement savings or a condo downpayment. All were distraught about their potential losses.

Financial adviser and CBC contributor Mark Ting said while private bridge loans can be a legitimate investment, they are unregulated and a bad option for mom-and-pop investors who lack the sophistication to check the veracity of what's being sold.

"Don't think your mortgage broker has done the due diligence. They don't know what's happening. These are loans that others have passed on because they're way too high risk," said Ting. 

"[The investment] is good until it's not. And then when it's not, it really breaks down, almost like a house of cards, which I think is what's happening in this case."

Cracks appear

Investors tell CBC signs of trouble began appearing about a year ago when payouts from SYOM started to lag.

Normally it took around 10 days for a client to receive a payout after they requested cash in their account. Then it was four weeks, then six weeks, a couple of months ... Then nothing. 

When investors complained, Martel was quick with assurances that everybody was going to get paid, either posting online or speaking directly to individual clients over the phone or via text. One investor said Martel's promises to "fix things" seemed sincere and that he came across as "transparent and friendly."

The explanation he gave for the delays seemed plausible, too: so many people wanted to invest with him that the company was being overwhelmed.  

"What is happening is that we are getting a tremendous number of people getting in," he said in an online post to investors in February 2023. At the time, he also explained it was equally important for SYOM to be finding new bridge loan deals so clients could keep their money with him — and growing.  

"In return for all the money you guys have made off me over the years, off this private lending, please be a little bit more patient," he told investors. 

That same month, the first of over a dozen civil suits were filed against Martel and MMAC. On May 4, he and the company were put into court-ordered receivership.

Who is Greg Martel? 

According to information found online, Martel founded mortgage brokerage Zilla Mortgages in Victoria over a decade ago before branching out into subsidiaries, including MMAC. A few years ago, he launched a peer-to-peer car share business both in the U.S. and Canada —  think Airbnb for cars — called carSHAiR.

CarSHAiR in Vancouver and Victoria list the same seven luxury cars for hire, all hosted by "Greg M." According to receiver PwC, a number of motor vehicles have been identified in the search for assets. So have two heavily mortgaged, multi-million dollar homes, one in Langford near Victoria and one in Las Vegas. 

In 2021, a paid-for profile in L.A. Style Magazine described Martel as a "revolutionary serial entrepreneur" and "towering leader in the business community" who had been "mentored by the famed Tony Robbins." The magazine sells coverage promising "press credibility" and connection to a network of "thought leaders." 

In the article, Martel says he was born in Quebec, grew up in Toronto and then moved around "for hockey" before settling in Victoria. On social media, he lists his home as Newport Beach, Calif.

Martel and American Garrick Delafuente, the U.S. broker of record for Shop Your Own Mortgage, co-host an online podcast, "Just the Tip," that promises "the biggest industry scoops from the worlds of business, finance, real estate and mortgage knowledge!"

Martel has a network of companies in Canada and the United States that mingled money, according to PwC. An MMAC bank account with a remaining balance of $279 was found to have had $58 million flow through it over the last six months.

For her part, Morrell is trying to make peace with the fact her money is likely gone while dealing with the anxiety and stress.

"I don't want to give Greg my health and wellness as well," she said. "I'm really trying to be kind to myself and take care and let this just be about a lot of money and not so much more."