A Victoria home design firm was left stunned this week to find it had been included in a list of companies to which mortgage broker Greg Martel claims to have loaned money.
Java Designs, owned by Kyle Leggett, got a shock when an email from PricewaterhouseCoopers, the firm overseeing the receivership of Martel and his companies, demanded repayment of nearly $2.77 million in loans and interest.
Leggett and his wife, Tara, who together own homebuilder Casa Milano Properties, said they still can’t believe it because neither of them have ever done any business with Martel and did not take out a loan with him.
“I can’t believe what we’ve had to deal with, it’s been a very stressful few days,” said Tara Leggett. She said she still can’t get over the audacity Martel had to include their company on a list prepared for the receiver.
The receiver is working to get to the bottom of what happened to about $226 million that about 1,200 investors entrusted to Martel.
Money was invested through Martel’s company My Mortgage Auction Corp. for 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.
“It’s so incredibly false and incorrect — we’ve never even exchanged a dime,” Tara Leggett said. “This is really unsettling, my stress level has gone through the roof.”
It seems Java Designs is not the only one to be included on the list despite not borrowing anything from Martel.
The “borrowers list” included in the receiver’s fourth report released late Thursday includes a series of what the receiver calls “investment opportunities” that includes the name of the borrower, how much they have borrowed and what it was for.
The list appears to include several companies that never borrowed a dime.
PricewaterhouseCoopers contacted 15 firms on the list and this week the receiver heard from a third of them and “all indicated that they have never borrowed money from MMAC or Greg Martel.”
Two long-established Victoria developers who appear on the list, but asked not to be named, confirmed they have never borrowed from Martel.
That lines up with what Tara Leggett was told when she spoke with PricewaterhouseCoopers this week, as the receiver confirmed to her there were others in the same boat as Java Designs.
“I can’t believe he had the audacity to throw somebody, some really good people, under the bus for absolutely no reason whatsoever,” she said. They were reassured by PWC that they are unlikely to be drawn into the Martel affair as there are no financial records that the loan ever existed.
PricewaterhouseCoopers would not comment on what it makes of the accuracy of the borrowers list. In its report, however, it noted it asked Martel about the list during a video call. Martel claimed for confidentiality reasons the borrowers list does not include the true names of the borrowers.
Martel also told the receiver he could not provide borrowers list details or loan agreements as a result of being locked out of the software platform used to keep track of it.
The receiver’s report points out that despite a court order to co-operate, Martel has not provided any information about the loans and where the money went, and despite a series of video calls with the receiver over the past two weeks he has evaded answering questions about them and refused to “provide even the most basic of information for even a single loan.”
As a result, the receiver intends to file an application for contempt of court today in Vancouver during a scheduled court date.
Martel and his company My Mortgage Auction Corp. — doing business as Shop Your Own Mortgage — were suspended last week by the B.C. Financial Services Authority for conducting business in a manner prejudicial to the public interest.
The authority’s investigation suggested millions of dollars in bridge loan investment funds were misappropriated for personal benefit and there was a failure to fulfil the terms of investment agreements.
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