Investors Launch Class Action Over Massive $300M Ponzi Fraud
Three investors who lost money in a $300 million Ponzi scheme run by B.C. mortgage broker Greg Martel have filed a class action lawsuit against the Royal Bank of Canada (RBC) and the British Columbia Financial Services Authority (BCFSA). The plaintiffs seek to represent more than 1,200 victims who suffered financial losses in the scheme.
Allegations of Negligence and Regulatory Failures
The lawsuit, filed April 25 in B.C. Supreme Court, accuses RBC and BCFSA of negligence, willful blindness, and failing anti-money-laundering duties that allowed Martel’s fraud to continue unchecked for years. The claim argues that despite receiving formal complaints in 2017 and 2021, the regulator did not properly investigate, and the bank ignored multiple red flags such as suspiciously high deposit volumes inconsistent with mortgage brokering.
The Scheme: Fake Bridge Loans and Disappearing Millions
Martel, who operated out of Victoria and later California, promised investors high returns on short-term bridge loans for real estate projects. However, court-appointed receiver PricewaterhouseCoopers (PwC) revealed no actual loans existed. Instead, the scheme used new investor funds to pay earlier investors, while millions were lost to risky options trading, a failed car-share business, and Martel’s lavish personal spending.
Investor Losses and Martel’s Disappearance
Of roughly 1,800 investors, 1,229 experienced net losses, with total outstanding claims exceeding $316 million. The lead plaintiffs include a building contractor, a military police officer, and an entrepreneur, all facing significant financial damage. Martel fled to Thailand and later Dubai after the scheme unraveled and has outstanding warrants in Canada and the U.S.
Ongoing Investigations and Legal Battles Ahead
While RBC has declined to comment and the BCFSA maintains its past investigations found no regulatory breaches, the class action seeks accountability for what it calls “massive and avoidable investor losses.” Meanwhile, investigations by B.C. Securities Commission and Victoria police continue as victims await justice and hope to recover their losses.
This lawsuit highlights the devastating impact of financial fraud and raises questions about the role of banks and regulators in protecting investors
