Ponzi scheme victims name Royal Bank, B.C. financial services regulator in class action lawsuit

Karin Larsen · CBC News

· Posted: May 06, 2025 5:48 PM EDT | Last Updated: 3 minutes ago

Three men who mislaid wealth investing with Ponzi schemer Greg Martel person filed a people enactment suit against the Royal Bank of Canada, the British Columbia Financial Services Authority (BCFSA), Martel and the institution done which helium ran his multi-million dollar fiscal fraud.

Representative plaintiffs Dustin Frank Renz, David Cumby and Andy Todd Wilson allege successful a announcement of civilian assertion filed successful B.C. Supreme Court that some the Royal Bank and the BCFSA are liable for losses suffered by 1,229 investors who mislaid wealth to Martel due to the fact that the 2 entities, contempt having wide regulatory duties, failed to observe oregon forestall Martel's misconduct.

"These failures — by the slope liable for processing the bulk of capitalist funds, and the regulator liable for supervising the owe broker—  enabled the [Ponzi] strategy to persist unchecked for years, resulting successful monolithic and avoidable capitalist losses," reads the claim.

According to Meldon Ellis, the lawyer representing the 3 men, Wilson's nett losses to Martel amounted to $100,000, Renz's $38,000, and Cumby's $20,800.

 CBC reached retired to RBC and BCFSA for remark connected the people action. RBC said it was incapable to remark connected the suit portion it is earlier the court.

BCFSA told CBC that aft receiving complaints astir Martel successful 2017 and 2021, it "conducted investigations and determined, based connected the evidence, that determination was nary misconduct wrong BCFSA's jurisdiction nether the Mortgage Brokers Act."

If certified, the people enactment volition automatically see the different 1,226 investors who, similar the typical plaintiffs, were besides "net losers" successful the Ponzi  — successful different words, each the investors who received little wealth backmost than they enactment in.

Martel disappeared arsenic his company, My Mortgage Auction Corp. (MMAC), was collapsing successful 2023, and his whereabouts stay unknown. Authorities successful Canada and the U.S. person issued warrants for Martel's apprehension related to contempt of court, but Martel has not been criminally charged, and an probe by the B.C. Securities Commission is ongoing.

Last year, tribunal receivership and bankruptcy proceedings heard that the span loans Martel was peddling ne'er existed, and that — successful classical Ponzi manner — aboriginal investors successful his strategy had been paid disconnected with wealth enactment successful by investors who joined later.

All told, Martel was recovered to person taken successful $301 cardinal and paid retired $210 cardinal successful the scheme. The remaining $91 cardinal was diverted to wage for his lavish lifestyle, to his failed car-share business, and to losses helium suffered trading options, according to investigation by court-appointed receiver and bankruptcy trustee PricewaterhouseCoopers.

According to tribunal documents, the 3 typical plaintiffs were introduced to MMAC successful 2022 and 2023, successful what would person been a abbreviated clip earlier Martel's fiscal location of cards started collapsing.

The 3 men invested successful span loans advertised connected the MMAC online portal that promised involvement of betwixt 9 and 14 per cent implicit presumption of 4 months oregon less.

The men were directed to ligament their funds to the MMAC relationship astatine the Royal Bank subdivision astatine 3541 Blanshard St. successful Victoria. That was the past they saw of their money.

The assertion says that RBC, arsenic a reporting entity nether the Proceeds of Crime and Terrorist Financing Act, was required to found interior controls, verify lawsuit identities, show relationship enactment and study suspicious transactions. 

The suit alleges determination were aggregate reddish flags with Martel and MMAC, including "high-volume capitalist deposits inconsistent with a owe brokerage business, circular money flows diagnostic of round-tripping, and relationship enactment inconsistent with the proviso of morganatic owe lending services." 

According to online references, "round-tripping" involves fiscal transactions with small oregon nary economical worth that tin artificially manipulate an entity's fiscal records.

Regarding the BCFSA, the assertion alleges that the bureau conducted lone "superficial investigations" successful 2017 and 2021 erstwhile it received complaints astir Martel. 

"These complaints raised concerns which, if decently investigated, could person exposed the ongoing fraudulent scheme," reads the claim.

The BCFSA is simply a Crown provincial bureau liable for regulating and overseeing the fiscal services sector, including owe brokers.

The suit is seeking to beryllium certified arsenic a people enactment and is seeking wide and circumstantial damages.