Mortgage fund operator pleads guilty in $5.3M Ontario fraud
Despite presenting itself as a mortgage investment corporation, Altmore did not establish a significant portfolio of mortgages or real estate secured loans.
While some legitimate loans were arranged, most investor funds were not invested as represented.
Of the approximately $5.3 million raised, about $3 million was returned to investors, typically drawn from the capital of other investors, a structure resembling a Ponzi arrangement.
McSevney also directed approximately $1 million to credit cards, family members, or relatives, though those payments were funded through a combination of investor funds and other sources.
Regulator flags capital markets integrity
Bonnie Lysyk, Executive Vice President, Enforcement at the OSC, said that “investors should expect that their money will be used as represented,” adding that McSevney raised millions from investors for what was presented as a mortgage investment corporation but most of those funds were not invested as promised.
