At first, Devin Hutchinson couldn’t quite understand the PricewaterhouseCoopers email he sent on behalf of the Supreme Court of British Columbia demanding his general contractor company pay back more than $15 million in loans and interest to a company he has never done business with done.
“I thought it was some kind of 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 scammer, appeared to have used the name Hutchinson Contracting on documents, supposedly to give an air of legitimacy to the bogus investments in non- existing real estate projects he was peddling.
Hutchinson has never done business with Martel or his company and said he certainly never received any loans.
“It was a shock… But we have absolutely nothing to hide,” says Hutchinson, who co-owns the company with his father.
“We’re staying positive and we’ll do anything and show anything (to help the investigation. I just hope they can sort this all out.”
Martel and his company, Shop Your Own Mortgage (SYOM), owe nearly a quarter of a billion dollars in missing investor funds. Martel himself is also missing, leaving the country at an unknown location, failing to comply with court orders to produce financial documents and a sworn list of assets.
PwC, the court-appointed trustee, has been tasked with trying to untangle the web of Martel’s US and Canadian investments and business interests to recover assets so that hundreds of creditors can get back some of what they lost.
Martel and SYOM were in the business of providing bridging private loans to real estate developers in need of short-term financing, attracting money from investors by promising annualized returns that often exceeded 100 percent.
Hutchinson said, according to PwC, that Hutchinson Contracting was listed as receiving three such loans from Martel for three trumped-up projects.
“Apparently investments were made for us to complete two custom homes for $5 million each and one more for something else,” he said.
CBC contacted Martel’s attorney Ritchie Clark, who had no comment.
In an email to CBC last month, Martel said denied that he was carrying out a Ponzi scheme. (A Ponzi scheme is a form of financial fraud that lures investors into a nonexistent venture that pays early investors out of the money brought in by investors who join later.)
Martel started SYOM around 2016. Earlier this year, investors began to complain about increasing delays in paying out their investments. Martel was quick to assure everyone would be paid, attributing the problems to overwhelmed business systems from too many new people wanting to join.
Soon after, the payouts stopped altogether and more than a dozen investors filed civil suits against Martel.
Martel and SYOM were placed in receivership in early May at the request of an investor who owes $17.6 million.
PwC reported that the SYOM company’s bank account had $58 million in and out of it over the past six months, but had less than $300 left by the time the account was seized.
Investigators also said they had been able to find only superficial documentation on SYOM’s bridging 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 be optimistic — is expected to emerge Friday morning when the case returns to the BC Supreme Court in Vancouver.