RCMP raid 6 locations in GTA as part of syndicated mortgage fraud investigation
RCMP vehicle parked outside Fortress Real Developments headquarters on Friday
The RCMP raided six properties in the Greater Toronto Area Friday morning as part of an ongoing investigation into syndicated mortgage fraud.
Police would not confirm what company or companies the locations searched are tied to, but an RCMP vehicle was parked outside the headquarters of Fortress Real Developments in Richmond Hill Friday afternoon.
Fortress could not be immediately reached for comment.
- Ontario mortgage watchdog orders$1.1M in fines to brokers involved in financing Fortress projects
- Canada regulator ignored warnings on risky mortgage investments
- Toronto lawyer says $1B of Ontario investors' money lost in syndicated mortgages
The developer made headlines in February when Ontario's mortgage regulator, the Financial Services Commission of Ontario (FSCO), issued $1.1 million in fines to four brokerages involved in syndicated mortgage investments on Fortress real estate projects.
On top of those fines, FSCO also revoked the mortgage brokerage licence of Building & Development Mortgages Canada (BDMC).
BDMC operated out of the same office complex as Fortress, according to the company website, and on Friday a CBC Toronto cameraperson saw a police officer inside the BDMC unit.
The investigation is being carried out by the RCMP's Integrated Market Enforcement team.
"If the investigation results in the laying of charges we will advise the nature of the charges and the identity of those involved," said Sgt. Penny Herman. "As this is an ongoing investigation, no further details will be provided."
What is a syndicated mortgage?
A syndicated mortgage is when a borrower finds more than one private lender to invest money in a property instead of going to the bank.
Each investor is individually registered on the land title, even though their money is combined to create a single mortgage.
- Syndicated mortgage investors still out tens of thousands, say Ontario's new regulations won't help
- More protection proposed for investors in beefed-up syndicated mortgage rules
Fortress has real estate projects in the works in Toronto and across the country, such as the planned SkyCity Centre tower in Winnipeg.
CBC Toronto reported on an unrelated case of syndicated mortgage investments, where 120 investors have likely lost $9 million in projects connected to a convicted fraudster, last year.
Nicole Brockbank can be reached at 416-205-6911 or by email at email@example.com
with files from Joanne Levasseur