A duo of financial professionals who deceived numerous investors in a Winnipeg condominium project and a mixed-use development in Barrie, Ontario, have been handed down identical five-year prison terms and hefty fines of $12.2 million each. Jawad Rathore, aged 49, and Vince Petrozza, aged 50, held leadership positions at Fortress Real Developments Inc., a defunct syndicated mortgage company based in the Toronto area. The company had raised funds for the failed SkyCity tower in downtown Winnipeg and the Collier Centre project in Barrie.
Following a ruling in May by the Ontario Court of Justice, it was determined that Rathore, the former CEO of Fortress, and Petrozza, the former COO, had defrauded close to 800 investors of $33.1 million over nearly four and a half years, resulting in losses of $24.4 million. Justice Daniel Moore sentenced both individuals to five years in prison, with the possibility of an additional five-year term if they fail to pay their fines within ten years after their release.
Their legal representatives informed CBC News that they have filed an appeal against the court’s decision. Syndicated mortgages, which involve multiple investors pooling funds to finance projects, were used to support the developments in question, with the properties serving as collateral. Justice Moore highlighted that the mortgages registered against the SkyCity and Collier Centre properties were excessively high, posing a significant risk to the principal investments.
The judge emphasized that the fraud perpetrated by Rathore and Petrozza was meticulously planned and had a profound impact on small-scale investors, many of whom faced severe financial losses. The victims experienced not only monetary harm but also psychological distress, with some enduring serious mental health repercussions that affected their physical well-being.
Despite the severity of their actions, Moore acknowledged that neither Rathore nor Petrozza had prior criminal records and both displayed potential for rehabilitation, considering their community ties and family responsibilities. Rathore, a father of six, cares for family members with health issues, while Petrozza, a father of three, supports his parents and mother-in-law. Moore also noted that the defendants stood to benefit financially if the projects had succeeded, indicating a genuine interest in their success.
The judge remarked that while the offenders had expressed a desire for the projects to prosper, their lack of genuine remorse was notable. The Crown had initially sought longer prison sentences for Rathore and Petrozza, proposing a 10-year term for each of them.