If Victoria mortgage broker Greg Martel returns to Canada or the U.S., there’s a good chance he will be detained and brought before the courts.
Last week, a California bankruptcy court ordered the U.S. Marshall Service to recognize a bench warrant issued by the B.C. Supreme Court Sept. 11, and directed that the service apprehend Martel.
The Bankruptcy Court for the Central District of California made the ruling after hearing an application from PricewaterhouseCoopers, the receiver overseeing Martel’s bankruptcy. The receiver was asking the courts for emergency relief to recognize the Canadian proceedings and to put a hold on the disposal of any of Martel’s U.S. assets.
The court agreed to restrain Martel and his companies from disposing of any assets.
Last week, it also restricted a group of U.S.-based Martel creditors, led by Dan Castellini, from disposing of any assets received from Martel since May of this year.
Castellini and a group of investors who allege Martel committed fraud and breach of contract claim they are owed in excess of $2 million. They claim the money was loaned to Martel, who used it to fuel his lifestyle and prop up other businesses.
In an affidavit filed with the California court, PricewaterhouseCoopers’ Neil Bunker said the information he has suggests Castellini paid an investigator to find Martel.
In the court filings, Bunker said he understands once Martel was located in Thailand, Castellini cut a deal with him and Martel transferred the deeds to two Tesla vehicles, a large amount of cash and Martel’s Las Vegas property to him.
Bunker told the court the Las Vegas home, which still has a $3.8-million mortgage, represents the possibility of some return to Martel’s creditors and needs to be kept with Martel’s assets.
Bunker also pointed out the transfer of the home to Castellini came after the Canadian court ruled Martel’s assets were to be frozen.
Bunker told the California court that to date, 862 investors have lodged claims with the receivership, saying Martel owes them $295 million, though PricewaterhouseCoopers believes the total number of investors is likely in excess of 1,300.
The U.S. court issued provisional relief until it can hold a full hearing Oct. 24 to hear PricewaterhouseCoopers’ application for final recognition of the Canadian proceedings.
In his affidavit, Bunker noted Martel’s current whereabouts are unknown, though he is believed to have left Thailand Aug. 30.
Martel now has civil warrants out for his arrest in both Canada and the U.S.
The Canadian warrant was issued after Justice Shelley Fitzpatrick found Martel guilty of contempt, after he breached several court orders that required him to provide information and co-operate with the receiver overseeing his bankruptcy proceedings.
Since PricewaterhouseCoopers took control of Martel’s My Mortgage Auction Corp. in May, Martel has been unco-operative, refusing to answer questions about finances and business operations and to offer even the most basic information about the bridge-loan investment scheme most of his investors believed they were involved with.
The contempt order will be posted on the Canadian Police Information Centre system, which should alert officers if Martel returns to Canada.
Martel could face fines or jail if and when he returns to Canada.
PricewaterhouseCoopers’ investigation, which has been extended until the end of February, has so far unearthed just over $300,000, while the costs accrued by the investigation are estimated at more than $1 million.
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