BC Mortgage Broker Under Investigation Has Sealing Order Denied, New Details Emerge

The investigations surrounding Gregory Joseph Martel remain ongoing as various authorities continue to unpack the workings of his company, My Mortgage Auction Corp (MMAC), and the situation is not getting any better for Martel.

In May, MMAC, which is registered in Victoria, was placed under receivership after it was hit with numerous lawsuits filed by residents and businesses, with accusations that Martel was running "a Ponzi-like investment scheme."

Greg Martel is the sole director of My Mortgage Auction Corp, which operated as Shop Your Own Mortgage (SYOM) and sold high interest bridge loans as investment opportunities, but failed to provide funds after several parties requested payments. At the time of the receivership, Greg Martel and his company were the subject of seven lawsuits, with an alleged total amount owing of $25.7M, according to court documents obtained by STOREYS, and the documents note that a number of other lawsuits were coming.

"Among other things, each of the actions allege that MMAC has failed to provide information to the plaintiffs contrary to the terms of the investment agreements, including the identities of the third parties that have received the plaintiffs' funds, or the particulars of any mortgage security in which the plaintiffs have an interest in pursuant to the agreements," said 1548199 Alberta Ltd. -- the company that loaned various sums of money to MMAC -- in its application to the Supreme Court seeking receivership.

"Despite repeated attempts by lenders to reach MMAC and Martel for further information, there has been no communication from MMAC or Martel," the filing adds. "Despite the evident inability of MMAC and Martel to meet its obligations to investors beginning in February 2023, there is evidence that MMAC continued to seek new funds from investors."

1548199 Alberta Ltd. says it is owed $17,598,989.76 and its receivership application was granted on May 4, with PricewaterhouseCoopers (PwC) serving as the receiver.

Since then, Martel has been uncooperative. The proceedings commenced without his involvement because his location was unknown, and the Court later granted an order that allowed Martel to be served via email because he was unable to be found or reached.

On May 31, the BC Financial Services Authority announced that it had suspended Martel and his company from any mortgage broker activity, saying that their preliminary findings indicated that "Mr. Martel misappropriated millions of dollars of bridge loan investments funds for personal benefit, failed to fulfill the terms of investment agreements, continued to seek new investments after already defaulting on existing loans, and failed to comply with multiple orders of the BC Supreme Court."

Subsequently, the BC Securities Commission announced that it was launching an investigation into Martel and My Mortgage Auction Corp on June 28, and asked those with any involvement with Martel's companies to come forward. On July 17, the Financial Services Regulatory Authority of Ontario also announced that it had revoked the license of My Mortgage Auction Corp.

PricewaterhouseCoopers has also since assigned MMAC into bankruptcy, with proceedings currently ongoing, and Martel is now also the subject of a lawsuit filed in Nevada and potential criminal proceedings in the United States, where My Mortgage Auction Corp also operates in California, Colorado, Florida, and Texas.

Last week, Martel's counsel applied for a sealing order that would redact portions of PwC's reports, citing "a concern about the use of any compelled information and documents in criminal proceedings in the United States, and in particular, the risk that any information compelled from Mr. Martel in Canada would not receive any fifth amendment protection in criminal proceedings in the United States."

PwC's report was filed with partial redactions along with the application. However, Martel's sealing order was denied, and unredacted versions of the reports have since been filed.

In its report, PwC detailed what it has been doing since its last report in June, which included (but was not limited to) obtaining banking information and account information as it relates to Martel's accounts at Chase -- the American national bank -- and Coinbase -- the popular cryptocurrency trading platform (that was sued by the Securities and Exchange Commission in June).

Regarding Martel's compliance with various orders, PwC detailed its exploration as it relates to the location of the bridge loan agreements, which Martel said were in DocuSign accounts, and the location of $16M to $18M in investor funds, which he said was held in an account with Scotia Capital.

PwC subsequently found no loan agreements in the DocuSign account and no accounts at Scotia Capital associated with Martel, concluding that Martel lied.

PwC also provided updates on aspects of the investigation focused on the digital platforms My Mortgage Auction Corp used to conduct business, including Filogix -- a Mississauga-based software company that offers solutions to mortgage brokers -- and Xero -- a cloud-based accounting software company.

PwC was unable to access the Filogix accounts, which managed the underwriting of the bridge loans. PwC was able to access Martel's Xero account, but was unable to access the account's records as a result of the account being locked due to non-payment.

PwC also looked into Martel's other companies, including a company registered in Delaware called Snail Team One that was set up as an "in and out" company in support of CarShair (stylized as carSHAiR), an app-based car-sharing company also registered in Delaware.

PwC found that Snail Team One was set to purchase a company that owned and operated a car rental business in Las Vegas called Royalty Exotic Car Rental, but failed to make the necessary payments to complete the purchase.

Following this latest report, PwC requested, and was granted, an extension of the Amended and Restated Investigatory Powers Order to October 31, in order to complete the full picture of Martel's web of businesses and finances.

"The receiver continues to seek information so that it may ascertain where the funds advanced by investors have been deployed," PwC said. "The receiver continued efforts to obtain information from Greg Martel through his new counsel following the last court hearing, but limited information was received and, as noted above, counsel for Greg Martel has indicated that no further information will be provided despite the current requirements."