Commercial Borrowers Beware: The Deceptive Romspen Loan-To-Own Toxic Financing Scam That Could Cost You Everything 

Deceptive Romspen Loan-To-OwnThere has been a particular odd pattern in which Canadian commercial lender Romspen has been lending money in the past ten years. The reason this is particularly odd is that Romspen is lending against projects that don’t generate any revenue or income. The borrowers aren’t going to pay back the principal and interest until they can develop the project. 

MFI-Miami isn’t the only one has seen this pattern in Romspen’s lending history. Several others have as well. Braden Maccke at Deep Dive has written about it:

“Romspen is lending against projects that don’t generate any income! The borrowers aren’t going to pay back the principal and interest until they can develop the project, then sell it, or borrow against it at a higher valuation!”

Deceptive Romspen Loan-To-Own
If you need money for your project, don’t fall victim to the Romspen lending scam

MFI-Miami began digging into Romspen’s lending history after we looked into the $21.3 million they loaned Caroline Weiss in Miami several years ago. We could never figure out why they would lend an octogenarian with commercial development experience money. Plus, Weiss and the properties are entangled in a fraud lawsuit filed by Weiss’s daughter. 

So, why did Romspen lend that much money to Weiss? It also appeared to be Romspen wanting to jump on the bandwagon of commercial real estate companies flocking to Miami. After all ther same thing happened 20 years a go before the 2008 financial crisis. At first, we thought it was half-ass underwriting as it was before the 2008 market crash.

We were Wrong. It Something More Sinisterly Shady And Deceptive. 

How The Deceptive Romspen Loan-To-Own Toxic Financing Works

Deceptive Romspen Loan-To-Own
The Romspen business model is the same as a guy in a van with “Free Ice Cream” written on the side it of trying to lure children inside.

We did a simple Google search and discovered a pattern to their methodology. We also discovered bankruptcy cases and other legal cases involving Romspen and their borrowers where Romspen took over projects. 

The research showed that Romspen is operating a highly deceptive Loan-To-Own scheme.

Lexology defines “Loan-To-Own” is defined as follows:

“A loan to own transaction is the acquisition of a secured debt position in order to influence control and ultimately acquire ownership of a target business (and its assets).”

The Romspen business model is no different than the local sicko in a van with “Free Ice Cream” or “Free Candy” written on the side it of trying to lure children inside.

Deceptive Romspen Loan-To-OwnRomspen would fall into this category. After all, Romspen’s business model is to find inexperienced entrepreneurs and like Caroline Weiss or the three stoners from Colorado. Then lure them in with big promises and throw a big wad of cash at them. Cash that they know the borrowers will never be able to pay just so Romspen can take over the project. then they either sell it or complete it and pocket millions more.

According to one source, 40% of all the loans that Romspen issues results in them taking ownership of the respective projects. In the bankruptcy proceedings, companies that ascribe to the Loan-To-Own model will devalue the project less than the loan amount in order to increase their profitability to obtain and sell the property. 

The Romspen Lures In And Traps Inexperienced Borrowers

Deceptive Romspen Loan-To-OwnRomspen waits until the last minute and does not disburse funding to the borrower. This results in the borrower passing the maturity date of the agreement.

 So, what might their motivation be? One source indicated that it is directly related to two key factors. The first being to force the borrower into a default on the loan. This would allow Romspen to start the process of taking ownership of the project. It would also allow Romspen to increase the interest rate to a point where the borrower is forced to go into bankruptcy.

Once Romspen highlights that a default has happened, the borrower has 45 days to pay the balance. If that doesn’t happen, Romspen can foreclose on the property.

Thus, the failure to pay results in an increased default rate. This toxic spiral can put the borrower in a point where they must borrow from another lender or sell property to pay the interest. In most cases, Romspen wants the companies to drown in the endless sea of debt in order to simply own the project for themselves.

However, it turns out it, this business model has turned out to be a trainwreck for the company. This business model also explains why Romspen is having problems paying redemption payments to their investors. 

Three Deceptive Romspen Loan-to-Own Projects That Are Coming Back To Bite Romspen Investors 

 1. Caroline Weiss – Estimated Loss To Romspen Investors = $25-30 million 

MFI-Miami has covered the soap opera of Caroline Weiss for the past 18 months (you can read about it below). This legal drama has been going on since 2016 will probably continue for another 4-5 years with Romspen being the ultimate loser. Namely, because the Florida 3rd DCA just handed Romspen a stinging defeat. Romspen investors might as well kiss their money good-bye on this one. 

Assuming Weiss’s daughter prevails, Romspen will lose the initial $ 21.3 million Romspen threw at Caroline Weiss. They will also have to pay their lawyers. The law firms Romspen has hired in Florida aren’t cheap. Therefore, their total legal bill will be conservatively $4 million. If not more.

2. Green Sage – Estimated Loss To Romspen Investors = $54 million

Green Sage was a cannabis business in Oakland, California started by three stoners from Colorado. The company that went belly up because of a bombardment of lawsuits from the City of Oakland, state of California and federal government. In addition to bill collectors. Romspen lent them $54 million in the middle of these lawsuits. 

Romspen attempted to foreclose last year. However, they are unable to find two of three partners. Romspen investors can expect to lose $50 million to $52 million on the Green sage deal. That is assuming Romspen takes possession of the two Oakland warehouses that Green Sage used. If not, investors could be out $54 million.

3. Ali Choudhri – Estimated Loss To Romspen Investors = $21 million

Romspen’ lawyers initially filed a notice on Choudhri’s Jetall Companies May 16, 2023. The complaint alleges instances of default on the 2019 loan and asked for a foreclosure sale for June 6th in Harris County.

However, Choudhri filed an emergency temporary restraining order against the lender on June 5th to block the foreclosure. The restraining order was granted because Choudhri’s companies were not properly served notice of the foreclosure sale. 

Choudhri also accused Romspen of fraud. Within  weeks of the spat Romspen withdrew the foreclosure complaint. 

So, if the Romspen telemarketing goons call you wanting to finance your project or want you to invest, hang up and block the number!

Read More About Romspen On MFI-Miami:

Romspen Just Got Spanked By The Florida 3rd DCA In The Weiss Family Feud

Will A Romspen Super Lawyer Cost Romspen $21 Million?

Canadian Commercial Lender Romspen Gave 3 Colorado Stoners $54 Million

Romspen Threw In The Towel On Uphill Foreclosure Fight

Romspen Investors Are Mad As Hell And Want Their Money

Canadian Lender Romspen Is Withholding Partial Redemption Payments

Romspen Investor Warning

Romspen Investment Corp. Sues Fake Real Estate Tycoon

Miami Developer Caroline Weiss Accused Of Multiple Counts Of Fraud

Romspen Sued For $21M In Miami Real Estate Fraud Case

Check Out These Government Websites If You Feel You Are A Victim Of Investment Fraud By Romspen.

Filing A Complaint In Canada:

Contact The Canadian Investment Regulatory Organization (CIRO) At 1.877.442.4322 For More Information. You Can Also Email Them At

If That Doesn’t Work, Contact Deputy Prime Minister And Finance Minister Chrystia Freeland:

You Can Also Contact Her Office On Parliament Hill At 613.992.5234 Or Her Office At Her Toronto at 416.928.1451.

If You Are An American Citizen. Contact These Federal Agencies:

You Can File A Complaint With The Securities And Exchange Commission By Clicking Here.

Also, You Can File A Complaint With The Federal Trade Commission By Clicking Here

In Addition, You Can File A Complaint With FINRA By Clicking Here

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