At first, Devin Hutchinson couldn’t quite make sense of the email from PricewaterhouseCoopers, sent on behalf of the Supreme Court of British Columbia demanding his general contracting business pay back over $15 million in loans and interest owed to a company he’s never dealt with.
“I thought it was some kind of a scam,” he said.
Turns out, Hutchinson was partially right. Only the scam part happened months ago, when Greg Martel, the Victoria mortgage broker and alleged Ponzi-schemer, appeared to have used the name of Hutchinson Contracting on documents, purportedly to give an air of legitimacy to the fake investments into non-existent real estate projects he was peddling.
Hutchinson has never done business with Martel or his company and said he certainly has never received any loans.
“It’s been a shock … But we have absolutely nothing to hide,” said Hutchinson, who co-owns the company with his dad.
“We’re staying positive and we will do anything and show anything [to help the investigation.] I just hope that they’re able to figure this all out.”
Martel and his company, Shop Your Own Mortgage (SYOM), owe close to a quarter billion dollars in missing investor funds. Martel himself is missing too, out of the country at an unknown location, not co-operating with court orders to produce financial documents and a sworn list of assets.
PwC, the court-appointed receiver, has been tasked with trying to untangle the web of Martel’s U.S. and Canadian investments and business interests to recover assets so hundreds of creditors can recoup some of what they’ve lost.
Martel and SYOM were in the business of providing private bridge loans to real estate developers needing short term financing, attracting investor cash by promising annualized rates of return that often exceeded 100 per cent.
Hutchinson said according to PwC, Hutchinson Contracting was listed as receiving three such loans from Martel for three made-up projects.
“Apparently there were investments made for us to complete two custom homes for $5 million each and another one for something else,” he said.
CBC reached out to Martel’s lawyer Ritchie Clark, who had no comment.
In an email to CBC last month, Martel denied he was running a Ponzi scheme. (A Ponzi scheme is a form of financial fraud where investors are lured into a non-existent enterprise that pays out early investors with the funds put in by investors who join later.)
Martel started SYOM in about 2016. Earlier this year, investors started complaining about longer and longer delays in getting their investments paid out. Martel was quick to make assurances that everybody would get paid, attributing the problems to overwhelmed company systems from too many new people wanting in on the action.
Soon after, the payouts stopped altogether and over a dozen investors brought civil suits against Martel.
Martel and SYOM were put into receivership in early May at the request of an investor who is owed $17.6 million.
PwC reported the SYOM company bank account had $58 million dollars flow in and out in the last six months, but by the time the account was seized, there was less than $300 remaining.
Investigators also said they had only been able to locate superficial documentation about the SYOM bridge loans, and nothing that identified who the loans were made to.
A clearer picture of Martel’s actions — and whether there is reason for investors to feel optimistic — is expected to emerge Friday morning when the case returns to B.C. Supreme Court in Vancouver.
