A B.C. Supreme Court judge on Monday found Greg Martel, owner of My Mortgage Auction Corp., guilty of contempt of civil court, saying he has breached five court orders by not complying with the requests for information from receiver PricewaterhouseCoopers (PwC) who has control of his companies and his personal assets.
PwC took control of Martel’s company in May after several civil lawsuits were launched by investors alleging Martel owed them millions of dollars. Martel had allegedly promised impressive returns for ‘bridge loan’ investments that, to date, PwC’s lawyers say they have never found any evidence of.
Court records show 855 investors have filed claims against Martel through bankruptcy proceedings, with the total amount he owes all creditors now surpassing $300 million.
Monday’s hearing, which was originally scheduled for two days, got off to a surprise start when Martel’s lawyers asked the judge to have them withdrawn as his counsel, citing “ethical reasons.” The request was granted and no further information was given. Martel’s original lawyer also withdrew, citing ethical reasons earlier in the proceedings.
In addition to the contempt of court application, PwC’s lawyer also asked the courts to borrow $600,000 from one of Martel’s investors so that it can pursue a property Martel owns in Las Vegas and try to recoup some of the equity from it.
Making the issue more urgent is what PwC called a “disturbing development.” They told the judge that on Sept. 6 they learned that Martel, against court orders, had allegedly transferred ownership of the Las Vegas property to one of the U.S. investors he owes money to.
PwC says it doesn’t have enough money to pursue legal action in the United States because so far, it has incurred more than $1 million in fees yet has only recovered roughly $300,000 from Martel’s estate. The judge granted the funding request.
In the contempt application, Madame Justice Shelley Fitzpatrick found Martel guilty of breaching five different court orders. She signed a warrant for his arrest, which will be sent to the Canada-wide policing database CPIC. If Martel is out of the country, as is largely suspected, the warrant means he would only be arrested if and when he returns to Canada.
The B.C. Securities Commission is also pursuing a criminal investigation into Martel’s dealing, but no charges have been laid. None of those allegations have been proven in court.