A group of Canadian investors has filed a lawsuit against the Royal Bank of Canada (RBC) and the B.C. Financial Services Authority (BCFSA), accusing them of failing to act in time and protect the public from a massive Ponzi scheme.

The scam, operated by Victoria-based mortgage broker Greg Martel, led to over $149 million in investor losses.

The legal action is being taken by Dustin Frank Renz, David Cumby, and Andrew Todd Wilson, who are representing the interests of 1,229 investors.

These individuals were among the victims of Martel’s now-bankrupt company, My Mortgage Auction Corp (MMAC). The investors hope the lawsuit will become a class action case, giving all victims a chance to seek justice and financial recovery.

The Scale of the Fraud

The fraud was uncovered during a deep investigation by PricewaterhouseCoopers (PwC), which is overseeing the bankruptcy of Martel and his companies.

According to PwC, the supposed business of offering short-term bridge loans for real estate was never real. Instead, no actual loans were ever given. Investor funds were simply recycled to pay earlier investors — the classic hallmark of a Ponzi scheme.

Over 65,000 financial transactions involving 33 banks were analyzed. The shocking conclusion was that $301 million was collected from 1,709 investors, but only $210 million was returned.

About 480 investors gained more than they invested — about $68.25 million extra — but the majority, 1,229 investors, lost a total of $149 million.

Some of the money was used to finance Martel’s luxurious lifestyle, including high-end properties in Las Vegas, Victoria, and Ontario.

Why Are RBC and BCFSA Being Sued?

According to the court documents filed last week, RBC processed most of the investor deposits and transfers for MMAC.

The investors argue that RBC failed to monitor these transactions, even when there were obvious red flags, such as unusually large investor deposits and no signs that the money was going to borrowers.

The lawsuit claims RBC had a legal duty to verify client identities, monitor accounts, and report suspicious activity — all of which were ignored or neglected. “RBC was not just a passive player,” the suit says. “It actively supported the accounts used by Martel to pool and redistribute investor funds.”

The lawsuit further accuses the bank of “willful blindness” and choosing to prioritize its business relationship with Martel over its responsibility to protect customers and the public.

On the other hand, the B.C. Financial Services Authority — the agency responsible for monitoring mortgage brokers — is also under fire.

The suit claims BCFSA received complaints about Martel’s conduct as early as 2017 and again in 2021, but failed to take proper action.

The lawsuit argues that if the regulator had properly investigated Martel, the fraud could have been uncovered much earlier and prevented many losses. Instead, it says, only a superficial investigation was conducted, which wrongly concluded there was no violation of mortgage laws.

Regulator and Bank Respond

The allegations have not yet been proven in court, and RBC has not issued a public comment.

The BCFSA, however, released a brief statement, saying it understood the concerns. It claimed that in both 2017 and 2021, the information it had did not clearly show a violation of the Mortgage Brokers Act.

The agency said Martel’s actions appeared to be outside the scope of mortgage brokering and that they acted based on the rules and evidence available at that time.

In 2023, Martel’s registration was suspended, and in 2025, it was officially cancelled, reflecting what BCFSA called a stronger focus on “early risk detection.”

What do the Investors want?

Through this class action, the investors are asking the court to recognize that both RBC and BCFSA had a legal responsibility to protect the public. They are seeking damages for the economic losses, along with official recognition of negligence and breach of duty.

Although PwC, the bankruptcy trustee, has told investors that lawsuits against financial institutions can have mixed outcomes, they did acknowledge that such actions could help build a case that banks failed to meet their duty of care.

What’s Left of the Money?

Despite efforts to recover the stolen funds, PwC says only a small portion of the money has been found.

Martel’s Las Vegas home was sold for US$5.1 million, with most of the money used to pay off an RBC mortgage of around US$3.84 million. His Victoria property sold for $2.47 million, but after expenses, only $109,606 was recovered. Another property in Ontario, held jointly with his former spouse, brought in just $82,698.

Much of the recovered money has been used to cover legal and administrative fees, and still falls short of covering what is owed to PwC.

Where Is Greg Martel Now?

Martel’s current whereabouts are unknown, according to PwC. The trustee believes Martel was exiled from Thailand after August 2023 and later traveled to Dubai.

Arrest warrants have been issued for Martel both in Canada and the U.S., but as of now, he remains on the run.