The Ontario developers behind the failed SkyCity condominiums in downtown Winnipeg have been charged with fraud after a six-year RCMP investigation.
Project Dynasty wrapped up with charges being laid against Jawad Rathore of Markham and Vince Petrozza of Richmond Hill. They operated Fortress Real Developments Inc., which had promised in 2013 to build a 45-storey building on the north side of Graham Avenue between Smith and Garry streets. There was much fanfare about the development, which was billed as a much-needed boost to downtown.
RCMP say police had received a complaint that the company had fraudulently obtained investments in a syndicated mortgage scheme, which is when two or more people invest in a single mortgage for one property.
"It is alleged that the founders of Fortress Real Developments engaged in fraud by orchestrating an ongoing scheme whereby they did not disclose the various risks to brokers and investors," RCMP said in a news release Tuesday.
The accused are also charged with "secret commissions" contrary to a section of the Criminal Code.
SkyCity Centre was marketed as a mixed-use project that would cost $200 million and was supposed to have major commercial tenants such as a national grocery store chain. Pre-sale of the condos began in the spring of 2014.
"This investigation is a great example of the RCMP’s commitment to keeping our communities safe by effectively disrupting financial crime," said Insp. Vance Morgan, the officer in charge of the integrated market enforcement team, which conducted the probe.
The team is mandated to protect the integrity of Canada’s capital markets by detecting, investigating and deterring capital market fraud.
Half of the units in SkyCity were snapped up after the project was launched, but sales petered out.
In 2018, Fortress was raided by the RCMP. Later that year, disgruntled condo buyers filed a class-action lawsuit against the developer in the Manitoba Court of Queen’s Bench; Fortress paid refunds to buyers who’d placed 10 per cent deposits, and the sky-high project was all but grounded.
The accused are slated to appear in court in Toronto on Aug. 3.