Skip to main content
Canada’s most-awarded newsroom for a reason
Enjoy unlimited digital access
per week
for 24 weeks
Canada’s most-awarded newsroom for a reason
per week
for 24 weeks
// //

A police officer speaks with a person in front of an Ontario Provincial Police office in Midland, Ont., on Oct. 2, 2019.

Ryan Carter/The Globe and Mail

The Ontario Provincial Police have launched a criminal investigation into three former officials from the Paramount Group, which sold investments in pooled mortgage funds before it was forced into receivership in 2017.

Paramount, which promised investors “predictable, steady returns,” raised about $115-million from more than 500 people before the Ontario Securities Commission accused the group of companies – which includes Paramount Equity Financial Corp. – of funnelling money into speculative developments inconsistent with the funds’ objectives.

The OSC, which also alleged that Paramount sold securities without being registered to do so, obtained a court order appointing receiver Grant Thornton LLP to oversee Paramount’s assets and recover funds.

Story continues below advertisement

On Jan. 17, the OPP obtained a production order from the Ontario Court of Justice that requires the receiver for Paramount to provide a list of investor names, as well as the size of their investments, in two of the funds offered by the company.

An appendix to the production order, obtained by The Globe and Mail, states that police are probing three ex-Paramount officials: Marc Ruttenberg, the company’s founder; Brad Burdon, a senior vice-president; and Matthew Laverty, the vice-president of sales and strategy. It says the men are being investigated for three alleged offences: defrauding investors “of money in excess of the sum of $50-million,” making false statements about the funds’ investment objectives and misappropriation of funds.

No criminal charges have been laid, and none of the allegations have been proven in court. The OSC has also not issued a verdict on the conduct of the Paramount officials. A hearing in the OSC case is scheduled to take place in March.

Mr. Ruttenberg and Mr. Burdon could not be reached for comment, and lawyers for both men did not respond to e-mailed requests for comment. Mr. Laverty said he was not aware of the police investigation, and said his primary responsibility at Paramount was serving as a liaison with bank lenders. “I had nothing to do with the day-to-day control. I wasn’t the CFO,” he said in a phone interview.

The origins of the Paramount Group date back to 2006, when Mr. Ruttenberg spotted an opportunity to offer retail investors a chance to invest in second-ranking residential mortgages without being bogged down in paperwork and other obligations.

Mr. Ruttenberg was working as a mortgage broker and had developed a network of clients with an appetite for private lending – providing second mortgages for homes at a higher interest rate than a typical first mortgage.

In a 2018 examination that was conducted by a lawyer for the receiver, Mr. Ruttenberg said many of these investors were frustrated with the amount of work that was required every time they found a new deal, and the delays in finding the right borrower. In response, he said, he came up with the idea of pooling their money, which would “pay them a monthly income but reduce the leg work.”

Story continues below advertisement

Soon, through word of mouth and a referral network, Paramount expanded rapidly. One of its funds, the Silverfern Fund, attracted 500 investors and $73-million.

However, both the OSC and the receiver allege that, instead of sticking to second residential mortgages as investors were promised, and limiting investments mortgages that had an 85-per-cent loan to value ratio, Paramount lent to scores of high-risk, speculative properties.

The receiver determined that $50-million of those speculative loans went to companies associated with Enzo Mizzi – a Toronto-area developer, landlord and construction-company owner. Some of these speculative loans, the receiver has also alleged, were made to development companies owned, “directly or indirectly,” by the principals of Paramount.

The receiver has launched a lawsuit against Mr. Ruttenberg, Mr. Burdon and Mr. Laverty to recover some of those funds. No statements of defence have been filed.

The receiver sued Mr. Mizzi in December. No statement of defence has been filed in the case. Micheal Simaan, a lawyer for Mr. Mizzi, did not respond to an e-mailed request for comment. In December, he said his client will defend the action, saying “Mr. Mizzi certainly does not believe that he has done anything wrong.”

Mr. Mizzi is not included in the OPP production-order documents.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies