US EditionCourt upholds $71M clawback of investor 'winnings' in Victoria Ponzi scheme
- The B.C. Supreme Court upheld a clawback order on May 16 requiring 561 investors to repay over $71 million received from a Ponzi scheme run by Greg Martel.
- Greg Martel's business, Shop Your Own Mortgage, obtained $300 million from over 1,800 investors nationwide by presenting the funds as short-term bridge loan opportunities.
- PwC, the trustee managing the bankruptcy case, determined that no genuine bridge loans were made; instead, funds from newer investors were used to pay returns to earlier ones, while substantial amounts were lost to unsuccessful business ventures and Martel’s personal spending, with most of the money still unrecovered.
- Some investors, called “winners” by PwC, contested the clawback citing financial hardship, and three investors filed a class-action alleging Royal Bank and B.C. Financial Services Authority failed due diligence and intervention despite complaints.
- Despite extensive efforts by PwC, recovery has been minimal due partly to Martel’s lack of cooperation, with all recovered funds used to cover receivership and bankruptcy administration costs.
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