Two men who were convicted of fraud in connection with the failure of syndicated mortgage firm, Fortress Real Developments Inc., have each been sentenced to five years in prison and fined $12.2 million in the Ontario Court of Justice.
In May 2025, Jawad Rathore and Vince Petrozza were each convicted of one count of fraud over $5,000 in connection with syndicated mortgage loans to a pair of real estate construction projects that failed, causing millions in investor losses.
Those convictions stemmed from the failure of Fortress, which reportedly raised $900 million from investors between 2008 and 2017 to finance various real estate projects. In 2020, the firm was sanctioned by the Financial Services Regulatory Authority of Ontario (FSRA) in a settlement over alleged mortgage rule violations after a number of its projects failed and investors lost money.
In 2022, Rathore and Petrozza were charged with fraud, and later convicted, with the court finding that investors were misled about the value of the properties that the firm was investing in, which put the investors at risk. The court rejected allegations that they failed to disclose certain upfront fees to investors.
Now, the pair has been sentenced in the case.
According to the court, the Crown sought 10-year sentences, along with forfeiture and restitution orders, while the defence asked for conditional sentences of two years less a day.
In his decision on sentencing, Justice Daniel Moore calculated that the total fraud that they were convicted for amounted to $33.1 million, which he reduced to $24.4 million, based on amounts that investors recovered through civil proceedings.
In addition to the size of the fraud, the court noted that an aggravating factor was the fact that the scheme victimized retail investors.
“The fraud targeted ‘mom and pop’ investors, upon whom the impact of the losses was much greater and in some cases were financially catastrophic. Most victims suffered some degree of psychological harm, and some suffered extremely serious deteriorations of their mental health which in turn also impacted on their physical health,” the court noted.
In determining the sentence, the court said that in seeking 10 year sentences, the Crown cited cases that involved large Ponzi schemes and other outright scams, which are different from the type of fraud that occurred in this case.
“This was not a pure scam or Ponzi-type scheme where the investment does not even truly exist,” the court said. “That said, the fraud did allow the projects to proceed on an overleveraged basis, meaning that the losses suffered were directly attributable to the fraud.”
“Obviously, no sentence that I impose is going to get the investors their money back or undo the significant financial and psychological harms caused,” the court said, in ultimately ordering that the pair serve five years in prison, and are fined $12.2 million (in lieu of a forfeiture order).
They will be given 10 years to pay the fines after being released from prison, with a corresponding five-year period of incarceration if they don’t pay.
The court also said that it will make restitution orders for at least some of the victims that will offset the fine, but sought further submissions on those orders — with priority going to the victims who testified at the trial.