Skip to content

Martel investors resign selves to losing huge sums, talk about impact on their lives

People who invested in Greg Martel’s companies are being hit with tax bills for interest they never received
web1_08032023-vtc-news-martel-contempt
Victoria mortgage broker Greg Martel. VIA FACEBOOK

Victims of Victoria mortgage broker Greg Martel’s investment schemes say they are resigned to the fact their money is gone, and hope Martel will one day be held accountable.

In the meantime, they want get out from under tax bills for money they never received.

Some of the 1,200 investors who sank more than $250 million into the short-term loan investments Martel offered talked to the Times Colonist last week about how they’ve been affected and what they want to see happen in the case.

“I’m not somebody who wants vengeance or anything like that. I’d like to see him have to explain what happened and where that money went,” said Graham, a retired Island resident who asked that his last name not be used. “In the broader scheme of things, if somebody gets away with this sort of thing, that’s a horrible thing because, hell, if he gets away with it, maybe I should consider a life of crime.”

Graham, who is in his mid-60s, entrusted more than $100,000 to Martel, who offered an opportunity to invest in short-term bridge loans for commercial and residential real estate deals.

Graham said he and his wife are lucky that their investments are diversified and not everything was tied up with Martel.

“This is a big pain in the neck and kind of a big gut punch, you know, but for me it’s not the end of the world,” he said. “But I think some people involved in this are really in serious straits. I get sick thinking about some of the people.”

Judy, a Victoria resident who also asked the Times Colonist not to use her last name, said while losing her $200,000 investment meant she had to return to work after being retired for five years, some investors were much harder hit.

Judy said some of the hundreds of affected investors who joined social-media groups to share stories and support each other report having to sell their homes, move in with their children and no longer being able to support themselves.

Some feel guilty for having brought friends and family into the scheme. A few have said they’ve even considered suicide.

“It’s heart-wrenching,” she said.

While Judy has come to terms with having to go back to work — “It’s nice to know I hadn’t forgotten everything” — she said the whole experience has been “really hard on us emotionally.”

“I just told my husband: ‘You know what? This is our new reality. This is our new life. And so let’s just make the best of it because I’m not willing to make myself sick over it.’ ”

Another investor, Tammy Morse, who lives in Nova Scotia, also said she wasn’t as badly hit as others, especially those who took out lines of credit to invest in Martel’s schemes, using their homes as security.

“There are people who emptied their bank accounts and invested with him,” she said, noting she was guided by the adage “only invest what you can afford to lose.”

Morse invested $60,000 over several years and said she got back about half of that through interest payments.

But when Martel and his company My Mortgage Auction Corp. were declared bankrupt, on paper her account was worth $267,000, which she was banking on for her retirement.

Morse said she struggles with the question of how she got involved in the first place, despite doing what she thought was due diligence and asking tough questions.

“I wonder were these ever legitimate contracts?” she said. “I don’t want to think bad of [Martel] because then I can’t trust myself to judge character and I don’t want to give him that power.”

The other problem Morse now faces is a tax bill of about $33,000 for the 2022 tax year from the Canada Revenue Agency.

Morse’s T5 form, which is used to report interest and investment income from non-registered investments, said she had income from her investments with ­Martel, even though Martel had stopped sending cheques.

“So I’m being taxed on that money I didn’t get,” said Morse.

Graham said it’s a problem for many Martel investors, who hope the investments will be officially designated a Ponzi scheme by the courts, which he said should give the CRA official licence to re-evaluate the taxable income. A Ponzi scheme is a fraud where existing investors are paid with money from new investors

Some investors have decided to pay the tax bill in hopes of sorting it out with the CRA later, if Martel’s scheme is determined to be a fraud.

In an emailed statement, the Canada Revenue Agency advised that those who disagree with an assessment based on interest income reported on a T5 slip, file an objection with the agency. By filing an objection, taxpayers preserve the right to an impartial review by the CRA that will consider underlying facts and circumstances, the agency said.

Judy and her husband said they are being denied Old Age Security because of investment income that has not materialized. That’s an extra hit of between $1,200 and $1,400 a month between them.

It’s unclear when those issues might be resolved.

PricewaterhouseCoopers, the trustee overseeing Martel’s bankruptcy, is still investigating where the money went, and has been reluctant to label the investment a Ponzi scheme. The B.C. Securities Commission is also investigating.

Martel is believed to have left Thailand on Aug. 30 and his current whereabouts are unknown. There are civil warrants out for his arrest in both Canada and the U.S.

Pricewaterhouse believes there are likely more than 1,300 investors tied up in the scheme, which it estimates involves nearly $300 million.

The receiver has been in charge of the file and ­investigating since May, but has managed to find only about $300,000, as Martel has refused to ­co-operate.

­The investigation has been extended until the end of ­February and has accrued costs of more than $1 million.

Last week, a California bankruptcy court granted an order to give Pricewaterhouse the ability to act in the U.S. as it has been in Canada.

That means Pricewaterhouse can investigate Martel’s businesses, seize his assets, interview witnesses, take evidence and intervene in any matters that involve Martel and his ­businesses.

The ruling has the effect of precluding anyone other than Pricewaterhouse from transferring, selling or encumbering any of Martel’s U.S. assets.

Pricewaterhouse has said in court that a group of U.S. creditors claiming to be owed more than $2 million paid an investigator to track Martel down in Thailand, and cut a deal with him that saw Martel transfer the deeds to two Tesla vehicles, a large amount of cash and ­Martel’s Las Vegas property to the leader of the creditor group. It said the transfer of the home came after the ­Canadian court ruled Martel’s assets were to be frozen.

[email protected]

>>> To comment on this article, write a letter to the editor: [email protected]