Fortress Founders Jailed for Fraud Targeting 'Mom and Pop' Investors

TORONTO, ON – February 05, 2026 – The masterminds behind Fortress Real Developments Inc., a company that raised nearly a billion dollars from thousands of Canadians, have been sentenced to five years in prison for a multi-million dollar fraud that preyed on vulnerable investors.

Jawad Rathore, 49, and Vincenzo Petrozza, 50, were convicted of one count of Fraud over $5,000 following a complex, multi-year investigation by the Royal Canadian Mounted Police (RCMP). On February 2, an Ontario Court of Justice judge handed down the sentences, which also include a staggering $12.2 million restitution order for each man. The pair have been given 10 years to pay, facing an additional five years of incarceration if they default.

The conviction marks a significant milestone in a saga that exposed deep vulnerabilities in the syndicated mortgage market and left a trail of financial and psychological devastation in its wake.

The Anatomy of a Deception

At the heart of the case was the business model of Fortress, a Richmond Hill-based firm that financed construction projects by pooling money from individual investors through syndicated mortgages. The court found that Rathore and Petrozza, the "operating minds" of the company, systematically deceived these investors about the very nature of their security.

According to Justice Moore's "Reasons for Judgment," the fraud was not a simple scheme but one of calculated misrepresentation. Rathore and Petrozza presented investors with loan-to-value (LTV) ratios based on highly speculative projected future values of the properties, rather than their actual, current "as-is" values. This critical non-disclosure painted a misleadingly rosy picture of the investment's safety.

In reality, the mortgages registered against the properties often far exceeded their current worth, leaving investors dangerously exposed. Justice Moore found "beyond a reasonable doubt that they both intentionally misled investors about the value of their secured interest in order to induce them into investing." This deception, the court concluded, amounted to the "non-disclosure of material facts."

The fraud, which the court found was ongoing for nearly four and a half years, involved a "high degree of planning and complexity." While the criminal trial focused on two specific projects—the SkyCity Centre in Winnipeg and the Collier Centre in Barrie—Fortress was involved in dozens of projects across Canada, raising an estimated $920 million between 2008 and 2017. The two projects in the trial alone saw nearly 800 investors defrauded of a total of $24.4 million in actual losses.

The Devastating Human Cost

While the numbers are stark, Justice Moore emphasized that the true impact of the fraud cannot be measured in dollars alone. The scheme specifically "targeted 'mom and pop' investors," for whom the consequences were often "financially catastrophic."

During sentencing, the court heard how the losses shattered lives. Many victims lost life savings, retirement funds, or money set aside for their children's education. The judge noted that "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."

This sentiment was echoed in the judge's poignant observation that "no sentence that I impose is going to get the investors their money back or undo the significant financial and psychological harms caused." He also noted that he did "not have any evidence of true remorse" from either Rathore or Petrozza.

The case serves as a grim reminder of the human cost of white-collar crime, where the weapons are spreadsheets and misleading prospectuses, but the wounds are just as deep.

A Meticulous Investigation and Regulatory Fallout

Bringing Rathore and Petrozza to justice was the culmination of a years-long effort by the RCMP's Toronto Integrated Market Enforcement Team (IMET), a specialized unit dedicated to policing Canada's capital markets.

"The RCMP is committed to protecting Canadians from large–scale financial crime," said Superintendent Mia Poscente, Officer in Charge of Cyber & Financial Investigation Teams for Central Region (Ontario). "This particular case is a significant outcome for the many investors of Fortress. This represents years of meticulous investigative work and close collaboration among multiple agencies to hold accountable the individuals who have abused the trust of investors."

The investigation involved a significant partnership between law enforcement and regulatory bodies. The RCMP credited the Financial Services Regulatory Authority of Ontario (FSRA), the Appraisal Institute of Canada (AIC), the Forensic Accounting Management Group (FAMG), and the financial intelligence provided by FINTRAC as crucial to the case's success.

The Fortress scandal acted as a catalyst for major regulatory reform in Ontario. The case became a "touchstone for regulators," prompting a crackdown on the sale of high-risk syndicated mortgages to retail investors. In 2021, oversight for many of these complex offerings was transferred to the more stringent Ontario Securities Commission (OSC). FSRA, for its part, has intensified its supervision of the sector, specifically targeting investments where loan-to-value ratios exceed 100% on an "as-is" basis—a direct response to the methods used by Fortress.

An Appeal in the Wings

Despite the conviction and sentence, the legal battle is not over. Rathore and Petrozza have filed an appeal against their conviction with the Ontario Court of Appeal and have been granted bail pending the outcome. Their defense argues that the trial judge "seriously misapprehended the evidence" regarding the use of property value opinions, which they claim led to an "unreasonable verdict."

The appeal introduces a note of uncertainty into what had appeared to be a conclusive chapter in the Fortress saga. For the nearly 800 investors still grappling with their losses, the prospect of a lengthy appeals process means that a final sense of justice, much like the recovery of their funds, remains a distant prospect. In the meantime, law enforcement officials continue to urge public vigilance, reminding Canadians to conduct thorough due diligence before investing their hard-earned money.