The receiver overseeing the bankruptcy of Victoria mortgage broker Greg Martel’s company My Mortgage Auction intends to petition the court to have Martel held in contempt.
PricewaterhouseCoopers, which says it has been stymied by Martel in its investigation of the company’s finances as it searches for more than $226 million investors entrusted to him, intends to bring the application in a court date set for Sept. 11.
If the contempt motion is approved, Martel could face fines or jail if and when he returns to Canada. His current whereabouts are unknown, though the court has heard he has been in Thailand.
The two-day hearing in September will also be a chance for Martel’s legal counsel to petition the court to have the receiver’s third, fourth and fifth reports sealed.
Martel’s legal counsel has argued information he had been compelled to provide to the receiver should be sealed over concerns it could place him in jeopardy and incriminate him in U.S. legal proceedings.
Last week, Justice Shelley Fitzpatrick refused to seal the receiver’s reports, noting the information had already been made public for months.
In her verbal ruling July 26, Fitzpatrick dismissed as “mere speculation” any concern Martel might have about the information he provided being used in future criminal proceedings in the U.S., saying there was no evidence authorities were investigating him.
Fitzpatrick said Martel’s counsel was welcome to bring a new application in September, but warned the evidence needed to be more compelling than the arguments made in July.
The receiver continues to investigate what Martel and My Mortgage Auction did with investor funds.
About 1,200 investors claim to have sunk more than $226 million into Martel’s company My Mortgage Auction Corp. to fund short-term bridge loans for commercial and residential real estate deals.
The money was to be repaid with high interest.
Many of the investors claim they have been waiting months for repayment.
The investors have been told very little money was found in the first two months of the receiver’s inquiries.
The receiver has said in its reports to the court that Martel has not co-operated fully with the receiver’s investigation and has been evasive when it comes to answering direct questions about where the money was invested.
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