Developers found guilty of defrauding investors out of retirement savings in Barrie, Winnipeg
CBC
Two men have been found guilty of fraud over $5,000 after misleading investors on two never-realized projects in Barrie, Ont., and in Winnipeg.
Justice Daniel Moore delivered his judgment in the judge-alone criminal fraud trial of Jawad Rathore and Vince Petrozza in a downtown Toronto courtroom Wednesday.
"Mr. Rathore and Mr. Petrozza are smart, sophisticated businessmen," Moore said, before telling the two men to stand as he delivered his judgment.
"I find beyond a reasonable doubt that they both intentionally misled investors about the value of their secured interest in order to induce them into investing," Moore said. "While they likely hoped that all the projects would be successful and the investors would be paid back, I find beyond a reasonable doubt that they knew they were putting investor funds at risk."
Investors lost tens of thousands of dollars after using the pair's company, Fortress Real Developments, to invest in the mixed-use Collier Centre in Barrie, Ont., and a condo tower called SkyCity in Winnipeg.
The charges related to syndicated mortgages, which are loans made by several investors to cover initial development costs like marketing and zoning, with the land itself acting as collateral.
After 38 years as a federal employee, Linda Bilorosek of Burlington Ont., invested her entire retirement savings in the SkyCity project. Of her $63,000 investment, she lost about $56,000.
Her relief was evident speaking to CBC News after the verdict was handed down.
"I am so happy. I can't tell you — I am very emotional," Bilorosek said, her voice warbling with emotion. "It's been really stressful … it's a relief."
In the beginning of this ordeal, Bilorosek said she didn't even tell people in her family that she'd lost money.
"I was ashamed that I was duped into doing this investment — I thought that I was smarter than that. This just proves how we were conned," she said.
Eduardo Cavaco invested over $269,000 in the Collier Centre project. "I lost every penny of that money," he told CBC News.
Seeing Moore's verdict handed down brought "a little bit of satisfaction," Cavaco said, but he still worries that investors in these projects are "not going to see any of their money."
"This is terrible. I feel terrible about that," he said.
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