A former mortgage administrator has been found guilty of fraud in a case that the Ontario Securities Commission is referring to as a “large-scale, sophisticated mortgage investment scheme” akin to a Ponzi scheme.
Andrew Lewis is charged with defrauding 33 victims to the tune of $7,527,630, solicited through a number of companies registered under his corporation, Lexxco.
“Lewis … solicited money for investments in private mortgages, offering rates of return of 10 per cent. Lewis placed ads in newspapers, radio ads, and promotional material explaining the benefits of private mortgage investments,” the official statement of allegations reads. “Lewis advertised the investments as safe and secure, and in exchange for their investments, he provided investors with promissory notes promising the return of their principal at the end of the term.”
He has been charged with one count of defrauding the public of an amount exceeding $5,000. He pleaded not guilty.
Lewis was licensed as a mortgage administrator with FSCO from January 30, 2009 to September 8, 2011. FSCO revoked his license in November of 2014, according to court documents.
“Lewis invested a small portion of the funds raised from investors in mortgages, however, most of the properties were sold under power of sale at a loss to investors,” the statement reads. “Most of the funds were deposited into bank accounts under Lewis’s control and used for his own benefit, and also used to pay ‘interest’ to other investors.”