A Toronto-based developer and executive who played a key role in a syndicated mortgage scandal, which saw investors lose hundreds of millions of dollars in the downfall of Fortress Real Developments Inc., is part of a group at the head of two major developments under the banner of another company.
Vince Petrozza, who was the COO of Fortress when it collapsed in 2018 amid a regulatory review and RCMP investigation, is involved with a new company, Matera Developments Inc. She has submitted development proposals to the Town of Newmarket, Ontario, approximately 50 kilometers north of Toronto, to construct townhouses and apartment buildings at two locations.
On its website, Matera describes itself as a “diverse and experienced real estate company with roots in construction for over two decades”. There are various archival photos of condominiums and houses, but none of the photos indicate the location of the properties or whether Matera was involved in their construction. Mr. Petrozza’s name is not mentioned on the website, nor the names of anyone else behind Matera.
The website gives details of a project called Lundy’s Lane Assembly – a plan to build a multi-unit residential rental property on land in Newmarket over the next 18 months.
The documents submitted to the city by Matera, as part of the company’s development proposal for Lundy’s Lane, were signed by Vince Petrozza on behalf of Matera.
Mr Petrozza did not respond to multiple requests for comment by phone and email.
The fortress scandal rocked the real estate industry in the Toronto area in 2018, after the RCMP carried out surprise raids on the company’s headquarters in Richmond Hill, north of Toronto and south of Newmarket, in the part of an investigation for fraud arising from several complaints of lost investments.
Of From 2009 to 2017, Fortress helped raise $ 920 million for developers by facilitating the sale of syndicated mortgage investments to thousands of retail investors with the promise of generous returns. The company’s mortgage subsidiary also offered attractive commissions to mortgage brokers who called on these investors.
But under the leadership of general manager Jawad Rathore and Mr. Petrozza, Fortress started but did not complete several real estate projects across Canada, leaving many communities that expected transformative developments in the sheer.
Many of these developments, like the SkyCity condominium project in Winnipeg and the Capital Pointe condominium project in downtown Regina, were never built, and lenders and receivers have put a number of sites up for sale. . Investors are still trying to recoup their initial investments in some of the projects or have been reimbursed for a fraction of their investments in others. Fortress on several occasions maintained that he had correctly warned investors about the risks of syndicated mortgages.
Mr. Petrozza was never charged by the RCMP or other regulators for the mortgage scandal, and he was not fined, but he surrendered his license to practice as a broker. mortgages as part of a settlement with the Ontario mortgage regulator. Fortress was fined $ 250,000 by the Financial Services Regulatory Authority of Ontario last year for violating the province’s mortgage rules.
At a May 31 virtual meeting hosted by Newmarket City Council regarding the development of Lundy’s Lane, Longtime resident Frances Darwin said she was concerned about Matera – especially Mr Petrozza’s involvement in the company, given his role at Fortress.
“I request that Newmarket staff perform due diligence on Matera, particularly with regard to any financing and construction risk of any new project in Newmarket,” Ms Darwin told city councilors, adding that any due diligence performed by the city should be made public. .
In an interview with The Globe, Ms Darwin said she had researched Matera and found links to Mr Petrozza. She said she brought this to the attention of Newmarket officials and asked to make a full statement regarding the developer’s background at a council meeting, but city officials cautioned her against doing so because she couldn’t prove that Vince Petrozza of Matera was Vince Petrozza of Fortress.
“Residents deserve to know,” Ms. Darwin said, referring to Mr. Petrozza’s role at Fortress and the company’s calamitous history.
According to a spokesperson for the municipality, the city is evaluating two applications from Matera, but has “no direct knowledge of the background of the individual named Vince Petrozza”.
“The municipality does not have the capacity to refuse an urban planning request on the basis of past legal problems,” added the spokesperson.
Company records show Matera is registered in the name of Robert Marzilli, who also owns RAM Contracting Inc., a construction company affiliated with the Lundy’s Lane project. In an email to The Globe, Mr Marzilli said he was the sole owner of Matera and that Mr Petrozza worked for the company, but was not an officer, shareholder or director.
Mr Marzilli’s ties to Mr Petrozza go back more than a decade, according to the property’s records. The two developers were co-owners of several properties in Newmarket, including 49 Charles St. and 52 Prospect St., which are both are part of a second townhouse and condo proposal in Matera which is under consideration by the municipality.
Ownership of both addresses was transferred to Mr Marzilli alone in October 2018, at the height of law enforcement scrutiny in Fortress. There is no direct mention of this second project on Matera’s website, but minutes from a June 29, 2020 city council meeting indicate that a Vince Petrozza virtually attended and presented the project. .
Real estate records also show that the five properties slated for redevelopment as part of the Lundy’s Lane project were purchased by Lundy’s Lane Newmarket Assembly Inc., a company incorporated by Mr. Marzilli, for $ 3.65 million in June 2020. .
The project has received more than $ 4 million in support from Advance Automotive Industries Inc., a company registered as John Brnjas, according to documents reviewed by The Globe. Mr. Brnjas did not respond to a request for comment.
For Ms. Darwin, it is imperative that the residents of Newmarket know who is invited into the community and authorized to take advantage of developments there. “We need transparency,” she says.
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