Is There Another Justin Trudeau Scandal On The Horizon? The Trudeau Government Ignores Pleas From Victims Of Romspen’s Multi-Million Investor Scam.
Is there another Justin Trudeau scandal on the horizon? Yes, there very well could be. The controversy prone Canadian Prime Minister is stepping into another scandal. This time involving Romspen. Romspen is the Toronto-based commercial lender we have written about a lot over the past year.
For nearly four years, Romspen has not paid or only paid a fraction of their investor redemption payments to investors. Why? Well, Wesley Roitman’s “Loan-To-Own” scam the subsequent Ponzi-style scheme created to prop it up has been a mitigated disaster. Romspen is now heading to down a path that could turn the company into a Canadian AIG.
Romspen Investors are made up of mostly Canadian senior citizens who use the investor redemptions as supplemental income.
Matter of fact, elderly Romspen investors have become so angry, they have gotten together on the internet and have christened the company, “Rob ‘Em And Spend.”
Another Justin Trudeau Scandal Is The Horizon Thanks To Trudeau Doing Nothing About Romspen
Some Canadian investors have contacted CIRO and Prime Minister Justin Trudeau’s Finance Minister Chrystia Freeland.
Seniors investors have discovered their pleas for help from Trudeau’s Liberal Government fall on deaf ears.
Investors we have spoke with say the Trudeau government doesn’t seem interested in helping Romspen’s victims. So, that leads to the question, why?
Is there something going on between the Trudeau government and Romspen? Is Romspen flipping tab for Trudeau to live La Vita Loca like Ricky Martin at raves and discos now that he is single? Did they pick up the tab for Trudeau’s $6000-a-night hotel room in London last year (with complimentary butler service)?
How Romspen Scamming Grandma And Grandpa Could Lead To Another Justin Trudeau Scandal
Canadian and American retirees are always prowling the internet for ways to enhance their fixed incomes. Retirees are old school and believe real estate is a safe investment even after experiencing the financial crisis of 2008.
So, they look for companies that promise big returns on real estate. Soon they find the slick packaging from Toronto-based Romspen and their affiliated brokers like BridgeInvest and Eyzenberg & Company in Miami with promises of big payoffs.
Long story short, Romspen and their partners get these inexperienced investors all excited over the promise of big returns. The seniors fall for it and then throw their life savings at Romspen.
Unfortunately and unbeknownst to grandma and grandpa, Romspen on the surface appears to be a Ponzi scheme. However, it’s a little more complicated as to why Romspen fails to pay their investor redemptions.
Romspen’s current business model relies heavily on a steady flow of fresh flow of investor cash. This is because they need to pay investor redemptions to previous commercial loan investors. Yes, we know, it’s sounds like like a Ponzi scheme.
The reason for this is pretty easy. The majority of the loans made by Romspen have gone into default due to the company’s “Loan-To-Own” scheme (see below). As a result, the vast majority of their defaulted loans get tied up in endless litigation. Thus, not generating revenue for Romspen and Romspen investors not getting paid.
It’s no surprise that Romspen investors are getting aggravated with Romspen executives. Investors haven’t received a full redemption payment since April of 2020.
Romspen Is Scamming Grandma And Grandpa By Lending Money On Projects That Don’t Generate Revenue
The reason why Romspen doesn’t fully pay investor redemptions is simply because they don’t have the cash. But, why? Simply put, 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. That could take nearly a decade.
Braden Maccke at Deep Dive pointed this out a year ago:
Unfortunately, Romspen investors who are mostly senior citizens don’t have a decade to wait for their money.
The Romspen Loan-To-Own Strategy Could Turn Into Another Justin Trudeau Scandal
So to keep investors and their families from filing complaints with American and Canadian securities regulators, Romspen resorted to a shady lending scheme known as, “Loan-To-Own.”
Lexology defines “Loan-To-Own” is defined as follows:
Romspen’s business model is to find inexperienced entrepreneurs like fake Miami developer Caroline Weiss or the three stoners from Colorado. Then lure them in with big promises. Then throw a big wad of cash at them. Cash that they know the borrowers will never be able to pay. This sets it up so Romspen can take over the project. Romspen can either sell property at a huge profit. Alternatively, they could 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.
However bankruptcy cases could drag out for years. This means Romspen’s investors aren’t get paid during this time. Even if Romspen does eventually take over the property.
Romspen Traps Inexperienced Borrowers
Romspen 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.
Check Out These Government Websites If You Feel You Are A Victim Of Investment Fraud By Romspen.
How To File 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 complaints@mfda.ca
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 All Else Fails, Contact Opposition Leader Pierre Poilievre’s Office In Ottawa:
Email: Pierre.Poilievre@parl.gc.ca
Call His Office At 613.992.2772 (Parliament Hill) or 613.692.3331.
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
Read More About Romspen On MFI-Miami:
Romspen Is Scamming Grandma and Grandpa
The Deceptive Romspen Loan-To-Own Toxic Financing Scam
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 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
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