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Project Status To find the status of the project you invested in, please contact the Trustee, FAAN Mortgage Administrators . The following is a snapshot of the Fortress Projects and review of total funds paid to investors and total losses. Please view this presentation on your PC or iPad for optimal viewing

Trial Summary The following are not official court transcripts, they are observations and summaries of the Prosecution & Defence questions and witness testimonies. The trial summaries with highlights of witness testimonies are listed below. Opening Statements The Prosecution alleges Rathore and Petrozza : Deceived the public by misrepresenting the true land value  Obtained opinions of values and represented them as actual appraisals to the brokers and investors; where the value of the property was substantially less than the Opinion of Value Rathore and Petrozza kept a large portion of the investors’ money for themselves, and investors were not made aware of this. The Defence opening remarks: The advance payments were disclosed to the public The opinions of value were given to the investors Rathore & Petrozza did not act alone, they had office staff. Fortress had law firms like Norton Rose; Gowlings for tax opinions Fortress worked with a well known custodian Olympia Trust to hold the investors’ money Many developments were successful A failed project is not an indicator of fraud. Clients are pleading not guilty of fraud and secret commissions and the defence wants them acquitted of all charges. Week 1 (Oct 28 -Nov 2024) Investor Witness 1 The first witness of the week was a retired female who invested $50,000 in cash, in the Collier project with her husband, and $70,000 with registered funds in Harmony Village Sheppard. She worked in IT but also worked as a real estate agent part-time. She was invited to a Fortress presentation in Barrie for the Collier Centre project. She said that Rathore and other Fortress staff were at the event, and that Rathore and Petrozza both presented at this event. The presentation went over the real estate market, the highlights of the Collier development, and as well as information on the builder, Mady, who was well known and reputable. Guests were told how the process worked with an SML, that it was low risk, the Loan to Value ratio “LTV”, the interest of 8%, possible profit sharing at the end, and the investment being a 2 year term. The Prosecution showed the presentation to the court on a large screen where it read “The Investors get their money before developers get theirs”. Once her Collier investment was finalized, she recalled receiving interest payments, and then decided to invest in a second project, Harmony Village. She only received interest payments for Collier until January 2015. Eventually, she was notified that the Collier project went into receivership. She never received any further interest, and did not receive any of her principal back. It is important to note here that the Collier Project still, to this day remains an empty lot. (Harmony Village went into receivership and the investors of that project received 70% repayment once the land was sold.) The Prosecution showed the witness an email exchange regarding an Opinion of Value. The email was from Cushman & Wakefield, where they were advising Fortress that it was understood by both parties that the evaluation they were proving for the Collier project was not a formal value. The witness commented that at the presentation she attended, the figure that was provided was referred to as an "appraisal", not Opinion of Value. The Prosecution went through the SML loan documentation and the witness admitted she did not pay attention to details. The prosecution also pointed out a page in the documentation that referred to an “appraisal” of the property, and in another paragraph referring to the “as is” value at $21 million. (Note that "as is" value of a property should be the actual value of the property or of the land- it is not a "built out" value. ) The Prosecution asked if she understood what this meant, to which she replied “just the land”. She also believed the LTV was 85%. They then went through an appraisal report dated June 2012. This is a month or so prior to Cushman Wakefield Opinion of Value. The land value was a mere $7.5 million. The witness was unaware this appraisal existed. The Prosecution went through the Fee Disclosure overview, a document that listed how the money (SML) was being used. legal fee (paid by borrower), mortgage brokerage fee (Centro/BDMC). It listed lawyers, Centro, and brokers. Fortress was not listed. The Defence focused on the aspect that the witness did not pay attention to what she was signing. Now keep in mind, all the presentations and flyers she has seen about Fortress SMLs promoted the SML investment as being low risk, name on title, 8% annual interest etc). The defence asked if her understanding was that the SML was safe? The witness said yes, based on the appraisal value she was given. The defence asked if it was the broker who made her feel at ease? The witness said yes, but it was because of appraisal value making the investment feel safe. The Defence reviewed the FSCO (financial regulator’s form.) The form stated that “brokers, agents or related parties may receive a percentage of profits and may be paid in advance of project completion.” The Defence asked “you don’t recall asking how much Fortress would get paid? ” She replied no. Principal Broker FDS The following day, the witness was the Principal Broker for the brokerage FDS. His role was to oversee compliance at FDS. He was also responsible for the brokers, reviewing documentation, training, verifying and validating information. Petrozza’s role as COO of Fortress was to provide the brokerages (FDS, FMP, FFM) with the paperwork and documents associated with the SML, and he would also do compliance videos for brokers. Rathore would deal with the project/development side of things. The Prosecution then played a webinar regarding the Sky City project in Winnipeg. Jawad presented first, and walked through all of the attributes about the project, the location, how the media has covered this project, etc. Petrozza takes his turn and goes over the SML portion. He reviews the Project Fact Sheet. The evaluation is provided by Global Legacy, with a $18 million evaluation, and a face value up to $35 million. The LTV is 85% with 8% annual interest, paid monthly. He goes over the risk factors- (a non-liquid investment, funds are locked in for the term, real estate has its own risks, delays and overruns). He then talks about the SML money being used for soft costs, marketing, sales centre. He adds that they never go over the property value, and stresses that the investment is secured against the land. He says that it is important for the broker to go over disclosures with investors, and advises the brokers not to scare the investors, but to do a good job of going through the disclosures, risks and that it’s important to get legal advice. The Prosecution then went through an email to Fortress staff regarding an appraisal. The email is dated August 2013. The appraisal for Sky City is listed as $5.9 million. He asked the witness if this appraisal was disclosed to clients, and the witness replied "no". The prosecution asked the witness if he had known of the actual appraisal would that have changed his mind? The witness replied that it would have been a huge red flag and would have made the investment RRSP non-eligible. The Prosecution went back to the appraisal emails, where the author states the residual value would be $11 million ( based on hypothetical conditions and extraordinary assumptions) to which Petrozza’s email reply to the other Fortress staff is that the appraisal is a joke of an appraisal, and to focus on the end goal. The prosecution then brought up the regulator, FSCO, and showed the court an email from the witness to Rathore, Petrozza, Ildina Galati (former principal broker of Centro/BDMC), and other staff. The email pertains to FSCO’s market & conduct compliance. The witness explains that FSCO wants to know who is getting paid and by whom. He suggests to the group that he make a presentation to FSCO. Petrozza responds that he doesn’t know if he would volunteer to do a presentation. The witness responds to Petrozza that he wants the regulator to understand what they are doing and that it is crystal clear. He also added that it was the role of Centro/BDMC to obtain and verify the appraisals. (Note that Petrozza was a licensed broker for Centro; while also being COO of Fortress). The appraisals and evaluations were then provided by Centro to the brokerages. The witness was also asked whether he was aware how Rathore & Petrozza were getting paid - the witness responded that he understood they were paid a portion of profits, upon project completion. He said that if Rathore and Petrozza were taking a percentage of the SML funds and paying themselves, it should have been disclosed to investors. The witness advised that all templates and documentation they received was provided to them by Centro (BDMC) and Fortress. This included the project specs, evaluation, LTV, SML advantages, etc. Investor Witness 2 On Wednesday, the Prosecution called another female investor as a witness. In 2012 she invested $80,000 in Collier. She invested in several other Fortress projects, and this investment was her retirement savings. She felt assured that the SML investments were safe and fully secured against the land, based on the information presented to her by Fortress, Centro, and the broker. The Defence also went through the investor’s package that she signed, highlighting the fine print which indicated that Fortress would get paid prior to project completion and after with profits. The witness says yes she signed but it wasn't made clear to her. The defence was focussed on all the disclosures she signed and pressed that the broker had a duty to explain the risks to her. Next the Prosecution called another FDS employee, who was the President of the brokerage. He was asked if he knew how Rathore and Petrozza were paid, and the witness understood that Fortress received 50/50 commission at the end of the project with the developer they partnered with. The prosecution asked the witness whether he remembered the kind of vehicles Rathore and Petrozza drove? The Defence objected- they felt it was not relevant, however the judge allowed the question. The witness replied that he recalled an Aston Martin, a Ferrari California, a Porsche Panerama, and a Porsche GT3. The Prosecution showed the witness an appraisal. This was the first time he saw it, and said it was not given to him nor the investors. Fortress and Centro had supplied him with the evaluation for Collier, which was over $21 Million. However, in reality, the actual appraisal was only $7.5 million. The defense is focused on the fact that Fortress was a high risk investment. All commissions and risks were disclosed. All investors read the disclosures and signed it regardless if they remember it or not. The mortgage agents selling the investments went through the risks. They signed off suitability of the investments. All investors were given independent legal advice. Summary- . Witness was not made aware of the appraisal. Defense was attempting to demonstrate that the brokers and agents were responsible to make the investors aware of the risks, they were responsible to ensure investors were suitable clients for the SML investments and that the Fortress was a high risk investment. FDS President Cushman & Wakefield Opinion of Value The last witness of the week was a Sr VP of Cushman & Wakefield. He was approached in 2012 by Petrozza, who is his cousin, for an Opinion of Value for the Collier project. The witness has his masters in Economics. The witness explained to the prosecution that the Opinion of Value he provided to Fortress was meant for internal purposes only. It was not meant to be used as an actual appraisal, and not meant to be used in any promotional material to the general public. Once he learned this figure was used in brochures to the public, he cut ties with Fortress. The Defence asked the witness if his letter to Fortress indicated that it was to be used for internal purposes only? The witness replied that the investors, as he understood, were the purchasers of the land. He maintained that he did not intend for the Opinion of Value to be shared with the general public. Week 2 (Nov 4- 5, 2024 Investor Witness 3 The first witness of the week was a woman who invested in Sky City and several other projects. The investor met both Rathore and Petrozza. Initially, a couple of the projects paid off. She referred other people to invest as well, however they no longer speak to her. The prosecution went through her documentation. The investor said she was told it was a low risk investment. The defence went through the investor’s package that she signed, highlighting all the fine print which indicates that Fortress will get paid prior to project completion and after with profits. The witness replied yes she signed, but it was not made clear to her. The witness faulted herself for not understanding what she was signing, calling herself “stupid”. The Defence maintained the onus was on the investor, as she signed the documents and had the opportunity to ask questions. Opinions of Value Global Legacy The next witness was a managing partner of Global Legacy. Legacy provides Opinions of Value for clients like Fortress. The witness stated to the prosecution that he is not accredited to provide appraisals, however he does have an MBA, lots of education in business, and real estate, etc. The witness did not know that "mom & pop” investors would receive his opinions of value. The opinions of value were all based on the information that Fortress supplied to Global Legacy. It was his job to evaluate the information provided by Fortress. He expected it would be used internally, not with the investors. The Defence went into a lengthy presentation that focused on how the Opinion of Value increased over the years and was looking to justify how their Opinions of Value increased. The defence ignored addressing appraisals. Investor Witness 4 The 3rd witness of the week was a male investor who invested $100,000 in Harmony and $80,000 in Colliers. In total he invested in 8 projects, totalling $900,000 in Fortress SMLs. This witness told the prosecution that he had attended a total of 3 sales presentations. Both Rathore and Patrozza spoke in all 3 presentations and then they spoke to people individually. Moreover, the witness spoke directly to the principals over the phone. The witness felt the security of the investment was the loan to value ratio, and that he would be on the deed of the property. He did not feel his SML investments were risky. He understood that the Opinion of Value and appraisal meant the same thing, and thought his money was being used for the purchase of the land and soft costs as per Petrozza and Rathore. During cross-examination the lawyer went through documents that he signed. The witness made it clear that he never had documents to review before signing. He understood that Fortress oversaw all facets of every project with the developers. The defence again focused on the risks of investing in syndicated mortgages. The witness explained he attended the defendant’s office a few times and talked to Rathore about any potential risks; he was made to feel that Colliers was a safe investment. Investor Witness 5 The last witness of the week was an investor who required an interpreter in Mandarin. He and his wife invested in the Collier project. He first saw an ad in a Chinese newspaper, and later attended a presentation at a Cineplex theatre, where Rathore and Petrozza were in attendance. He recalled that Rathore spoke to the audience, where 100-200 people were in attendance. Rathore spoke about the success of other projects. The witness thought his money was being used for the project.The witness recalled having a lawyer explain the documents via video, but he and his wife felt the lawyer who spoke to them did not represent them because they didn’t pay a fee for his advice. They were mainly focused on the interest rate on his investment and that their name would be on the land title. He admitted he and his wife went through the documents very quickly with little to no review. They felt the risk was very low based on what was presented in the theatre about successful Fortress projects. They did not see the risk document and their broker did not explain it. The term “risk” never came up. It was never explained by anyone. Their 3rd ranking mortgage was not understood. Upon signing the investors never understood how and what Fortress would get paid. They never received the letter from the lawyers office about the Opinion of Value for $ 21.8 million. The investor was impressed by the presentation, and did not understand or read the documents. VOSMI's reaction to the Defence statements and questioning:It is apparent that strategy of the Defence is to distance Fortress from the SML portion of the business, putting the onus on the brokers that were responsible to disclose the risks, to know their client, and for the investors to have read all of the disclosures of risks prior to signing. Keep in mind that Petrozza is COO of Fortress, but was also a licensed broker for Centro brokerage. The Prosecution is clearly demonstrating that the investors, and even the FDS brokerage President and Principal Broker were unaware of upfront payment Fortress took from the SML’s, a whopping 35%. The Prosecution also shows a pattern where Fortress failed to disclose the actual appraisal values to the brokers and to the investors. Both evaluators maintained their Opinions of Value were for internal purposes only, and not to be shared to the public. Week 3 (Nov 12-14, 2024) FSCO Employee The first witness was a FSRA (Financial Services Regulatory Authority of Ontario) who at the time was a Sr Compliance Officer with FSRA. In 2013 he was responsible for completing examinations on Fortress' brokerage, Centro. (later known as BDMC). The examination was to ensure Centro was in compliance with the MBLA. His scope was to review the brokerage policies & procedures, not to audit the brokerage. During this examination he met with the principal broker, Ildina Galati. (who is now deceased). The Prosecutor asked if they questioned whether the brokerage took steps to verify suitability or any risks or conflicts of interest disclosed? The witness responded that Galati stated they didn't verify. The Prosecutor asked if the witness went back behind the scenes to verify if a conflict of interest existed? The witness stated no.The FSRA witness was asked how many files did he review during the examination? He responded that he reviewed only 4 files. The files he looked at included lenders who were banks, trust companies; ie institutional lender files, not files of mom & pop investors (ie SML investors). The Prosecutor also went over a letter dated April 2013. This letter provided a summary of findings. Galati responds that they will establish separate brokerages. (these brokerages became FMP, FFM & FDS). The Defence went over the role of the FSRA employee, and how the brokerage's role was to take reasonable steps to disclose material risks; and to give each lender the proper lender forms in a language that can be understood by the lender. The Defence stated that certain requirements and provisions only came into effect much later after his Centro review. The Defence also clarified that the examination he did with Centro was not as a result of a complaint, it was a regular compliance review. The witness stated that the existence of policies and procedures was the main purpose of the exam. Fortress Employee EVP Strategy & Dev The witness was the EVP of Strategy & Development for Fortress . He began working with Fortress in the Spring of 2013. He previously worked at MCAP Financial, and took an offer from Fortress. Margani was a licensed mortgage agent at the time. His job at Fortress entailed the following : 1. Bring in Developer clients 2. Underwrite the fundamentals of projects they were bringing to establish feasibility 3. Finding debt capital acquisition from Financial Institutions, Trust Companies etc.(ie finding financial help from FI's for construction financing ) The witness was asked if these lenders would work off opinions of value? Witness stated no. Prosecutor asked witness if he knew what Fortress did and how they got paid? The witness stated that Fortress was a development company, and that they were providing consultations for the development of projects. Part of the services was to facilitate equity for projects, and they would have to the affiliate brokerages to find assets. The Prosecutor asked if this was the mom & pop investors? The witness responded yes. The Prosecutor asked the witness if he knew how much money Rathore & Petrozza received from the SML investors. The witness responded that this was not in his area. He stated that the responsibility of the money that was coming from investors was with the brokers. He was then asked about the marketing- ie campaigns, videos, etc. Who created those? The witness responded that it was the marking department, led by Jawad Rathore. The Prosecutor asked the witness what was the land like for Sky City in Winnipeg when he joined Fortress in 2013? The witness replied it was a parking lot. And then what was it when he left Fortress in 2017? The witness responded that it was still a parking lot. The Prosecutor then went over an email trail between the witness, another Fortress employee and Vince Petrozza with regards to appraisals and construction financing. The appraisal provided by one company is listed as $5.9 million. They discuss how they should look at residual value. In another email Petrozza responds to the other Fortress employee, and removes the witness from the email trail and says"Get me an appraisal of $9.5 Million or better!" (Note that in the end, they chose an appraisal which was actually an opinion of value, and that figure was $11 million. This was the value that was given to the Syndicate Mortgage investors and presented as the value in the loan to value ratios for the project.) Upon cross-examination, the Defence went over an offering memorandum. Note that an offering memorandum is provided to accredited investors in the exempt market. The Defence went over this document with the witness, and read the risks that were cited. The witness clarified that this was a security offering and that he was not involved in that side of the business. The Defence went over the role of the witness at Fortress. The witness said his role was to expand the FI (Financial institution) base. They went over the different types of exits for projects. 1. Completion- project is built, units complete, proceed to pay back SMIs. 2. Refinance 3. Sale- entire project is sold and cash is paid to SMIs. The Defence asked if the witness was involved in the execution or steps made to pay the SMIs? Who was responsible? The witness responded that he believed it was a combination of Fortress, BDMC, and the Fortress affiliated brokers. Mady Development Exec The last witness of the week was an executive from Mady Development . Mady was the developer who partnered with Fortress for the Collier project in 2012. Mady sought bankruptcy protection in January 2015. Fortress then took the project over from Mady in 2015. The witness was asked whether they were made aware of the commission that Fortress was taking from the investors' principal and the witness confirmed they were aware. Even though they did not receive the full principal they felt the project would still succeed with the condo sales. Week 4 - Jan 27, 2025 RCMP Forensic Accountant The last witness of the trial testified. He is the forensic accountant/RCMP who analyzed the Fortress financials. He has been an RCMP officer for 12 years, and prior to that was a professional accountant for a multi-national accounting firm doing forensic accounting. The witness created a report on Fortress financials and developed a spreadsheet. The spreadsheet focusses on 4 Fortress projects. The Prosecutor reviewed Sky City & Collier. The document contained data from various sources - search warrant, production orders, and bank documents. The spreadsheet included tranches which are funds syndicate mortgage investors made to projects. He reviewed where the money went from the tranches, to bank accounts. The spreadsheet broke down the amounts raised for each project, where the fees went and who benefited from them. The Defence asked the witness if he knew that the offering memorandum was provided to investors? The witness replied he did not. Prosecution confirmed with witness that the offering memorandums were provided to some investors. (note that the OMs were only provided to accredited investors, not to the mom & pop investors).

Criminal Trial The criminal trial of R vs Rathore & Petrozza began in October 2024. The verdict was read in May 2025. The sentencing submissions hearing is to take place December 3, 2025. Read below for the information on the trial. about the Criminal trial Trial Info, location, Q&A, media coverage Read More > Trial summary Crown Prosecutor, Defense opening arguments & witness testimonies Read More > closing arguments Summary of Crown Prosecutor & Defense closing arguments Read More > Verdict Justice D Moores verdict & reason for decision Read More >

March 11, 2020 Watch Rose Ray's Video with an update and request of our investors. As per Rose's video, attached below to the right, is the letter that you may use in your email to FAAN mortgages requesting the documents pertaining legal opinions related to your file. Please ensure you sign the letter before you send it to FAAN. Subject line of your email can read: Request for Legal Opinion Documentation Send the letter via email to FAAN i nfo@faanmortgageadmin.com , with a copy (cc) to roseray@bell.net Thank you! Letter to FAAN Requesting Docs.docx

Closing Arguments (Apr 1-2, 2025) Crown Prosecution's Closing Argument The prosecution began by restating the charges against the defendants, emphasizing the seriousness of the allegations. The crown had originally 2 charges brought against the defendants- Fraud and Secret Commissions on 4 development projects, however narrowed down the charges to Fraud, on only 2 projects- Collier and Sky City. The Crown counsel Vallery Bayly highlighted the 3 elements of fraud. Deceit, Dishonesty & Deprivation. 1. Deceit This was done via promotional material falsehoods. The language used in marketing materials to describe opinion of value by using the terms “as is” values. The Loan to Value ( LTV) was described as being based on current value and not future value, and marked as being secured. The Prosecutor shows promotional power point presentation , “What is LTV?” The slide states “proper evaluations are essential.” Nowhere does it say LTV was based on Future evaluations. The Prosecutor later showed a pamphlet, which is what the witness received. “What is an appraisal ?” Why are evaluations so important? ” The pamphlet goes on to explain the why an LTV matters. The Prosecutor then moved to Disclosure documents. In the appraisal section of the FSCO investor disclosure firm, the form shows an appraisal of $21 Million. But this was Mr Felice’s opinion of value , when the project would be built out. The line where it says “project value” is left blank. LTV section states appraised as is $21 Million, and LTV is 85%. Projected value is left blank. In the Law Society disclosure form, point #9 indicates “I am satisfied that current value is $21 Million, LTV 85%. In the Memorandum of Understanding (note that the mom & pop SML investors did not receive this document, as it was only provided to accredited investors) the evaluation is listed as $21 million. LTV listed as 85%. However even in these documents there was deceitful language. Investors testified of security & LTV, and the importance of LTV as it gave security to their investment. Prosecution argued that forms had to be filled honestly, and pointed out that Fortress could have disclosed the values or added accurate language. The nature of the opinion of values were dishonest throughout the documents . The crown is not saying the opinion of value should not be used, but it should be used honestly. The crown added that it is not fine to tell mom & pop investors that funds are secure when that is not true. Crown stated that this should not be a “buyer beware” situation. 2. Dishonesty - Dishonest act- Failure to disclose "As Is" Value. The appraisals were available at the time the investors invested in the SMLs. There is strong evidence that Petrozza had the appraisal as at Aug 16, 2013, and an additional accredited appraisal done Aug 26, 2013 which was given to Rathore and Petrozza of $11 million also not disclosed to investors. There as an email chain where they discussed the Collier appraisal of $6.9 million July 24, 2012 . It is a proven fact that Rathore and Petrozza knew the appraisals were vastly lower than that of Mr Felice & Mr Cheung’s evaluations. The prosecution added that the defence will argue that Rathore & Petrozza had to keep appraisals confidential and away from investors. However, a contractual confidential clause does not negate fraud, and it was not on the investors to request appraisals. 3. Deprivation. The prosecution cited the Theroux fraud case. (The judge in this case held that all that was required for a conviction was a dishonest act which had as a consequence that someone was deprived of something; the fact that Théroux honestly believed that the residences would be built, and that the deposits would not be lost, was no defence to the crime. ) The prosecution continued that there is evidence of Rathore and Petrozza’s knowledge of what the investors were being told. For example, the prosecutor refers to the Sky City training video where Petrozza gives training to the brokers. Petrozza reminds agents of suitability, “Know your client” and “make sure your client fully understands”, but yet does not disclose appraisals. He knew what was in the disclosure forms, and what was NOT in the disclosure forms. In an email chain between Rathore & Petrozza July 4-6 2012- Petrozza asked for an appraisal to Jeff Cheung - Subject line is Appraisal. They discuss the $6.9 appraisal. Petrozza knows $6.9 million figure will be a problem and not sufficient. They discuss the Felice evaluation and say “Felice for the win!” Other evidence from the Sky City documents, and similar email chains. Email between Petrozza and another Fortress employee - Fortress employee Mr Cercosta states “ I don’t even know why we paid or wasted time “ … Petrozza replies “I said get me an appraisal or evaluation of $9.4 million or better! “ Cercosta replies “It’s an insulting joke”, Petrozza replies “ Agreed, but we get what we need to get to the end goal”. Prosecution added there is evidence of one of the witnesses speaking directly to Rathore and Petrozza about the LTV. The evaluators Felice and Cheung did not believe their opinions of values would be passed on to mom and pop investors. On April 2013, Felice called and discussed this with Petrozza and later stopped all communication with Fortress. Counsel stated they were dishonest. They needed to know deprivation could occur. They knew LTV was central to them promoting SMLs. They were dishonest to market these investments as secure when they were not. Their dishonesty was intentional and they were personally involved in marketing. Defence's Closing Argument Defence Counsel Scott Fenton began by stating that the RCMP started investigating Fortress in 2016 and executed multiple search warrants in 2018. They discarded to fraud on 4 projects however Crown abandoned 2 projects which left Sky City and Collier. Note that the judge has previously stated that Fraud only needs to be proven on 1 project for a conviction. He continued by saying that Fortress had over 80 projects, and that many were successful. (Fact Check: Note that this is not accurate. Out of the 80 projects, 18 exited with no payout at all to investors (total loss of over $240 Million; 28 projects exited with partial payouts to investors with losses of $180 Million) The total amount of investor funds never repaid to date is over $400 Million. While some projects were successful, some were also discontinued, some projects were sold to another developer.) During his arguments, he only listed a handful which were successful, and did not submit any evidence showing that "most projects" were successful. The Defence argued that: The brokers had a legal duty under the act that their clients understood risks, and that they understood opinion of value, and that it was not the responsibility of Rathore & Petrozza. (Fact check- Petrozza was actually a licensed broker with Centro/BDMC while also a controlling principal of Fortress and had a duty of care to the investors). Centro/BDMC were investor facing, whereas Fortress was developer facing. That Fortress operated a successful business (Fact Check- while some projects were successful, many projects failed to repay investors, a total of $420 million). In the case of Collier, that the initial developer Mady went bankrupt and that is the “Elephant in the room” (Fact Check-Collier was initially developed by Mady Development Corp; Mady filed for creditor protection January 30 2015; In November 2015 Fortress purchased the Collier Centre and as lead developer they were responsible to repay the SML investors. Fortress later defaulted on its first loan to Morisson. Morrison then listed the property for sale in 2018; in 2019 the property was sold however there were no recoveries to repay the SML investors. Numerous documents were signed by investors Brokers were responsible for explaining terms and conditions to SML investors. Independant Legal Advice (ILA) was provided to investors. (Fact Check: the ILA was arranged and paid for by Fortress) All documents were conveyed to investors via brokerages. The documents that Rathore & Petrozza showed the importance of brokers to disclose information to investors. (Defense shows an email with Petrozza and Rathore stating the importance of ILA training, and that one would arrange a webinar and a checklist- and how this email shows a pro-compliance of Rathore and Petrozza.) Defence continued that the documents stated : “The principals will receive further fees based on the profitability and success of the project” And continued that the brokers had a legal fiduciary duty.” To which the judge asked “Were the fees payable whether the project was successful or not? If they were not profitable and not completed do they have to pay the money back?” The defence replied “ Well investors could have asked” The judge responded” I’m asking you .” He added: “ It was calculated assuming it will be profitable?” Defence responded “ It’s not a fee based on profitability”.’’ He added” Anyone was free to ask” - Note that the courtroom erupted in laughter from the viewers. The Defence continued to focus on the risks, and that these investments were not a guaranteed return, and that it was made very clear how risky it was to investor. The Defence refers to “Declaration 10” that explains fees, how investors will only get net investment over in above fees but not guaranteed. There was addendum to declaration 10 that with schedule C2 that states that Fortress will make money before completion of the project. Investors were fully informed of the risks and fees payable in advance of the project completion. (Fact Check- SML investors did not receive this document, this document may have been provided to accredited investors but mom & pop investors). The judge asked if the money was being used for their own purposes, the document is not clear even to the judge. The Defence responded that the document was not hidden, investors had the right to ask about it . Day 2 of Closing Arguments The Defence Gerald Chan continued with closing arguments. Opinions of value were fully disclosed to investors Opinions of value were independent Fortress was not required to disclose the other valuations/ appraisals in its possession-and in fact was prohibited from doing so Crown's cases are distinguishable (ie. this case differs from a precedent case, and therefore, the precedent's legal reasoning or holding does not apply to the this case due to materially different facts.) The Defence restated that Fortress was developer facing, not investor facing and argued that the brokers dealt with the investors, and had the duty to disclose to investors per regulations- however that regulation was not applicable to Fortress. The Judge responded: “Brokers don’t immunize Fortress from responsibility”. The Defence continued that brokers had all the information. Opinions of value were fully disclosed; opinions of value were independent; the value was based on legally permissible methodologies; and Fortress was not required to disclose any other valuations. He added that investors had the broker and Independant Legal advice (ILA) counsel to guide them. (Fact Check: In 2017 The law society later issued a warning to lawyers regarding providing ILAs for syndicated mortgages due to the Fortress losses and undisclosed risks ). The Defence provided investor witnesses as examples of how they could have asked to discuss with the broker, lawyer and financial advisor, and how another investor did not ask for more time to review the documents. Next the Defence moved to address Opinions of Value, and how the future value with the capitalization rate. The judge asked several questions to understand how this rate was arrived at. The judge asked “To what amount can I use my general knowledge of accounting in this case? He adds that an investor would review Fortress with knowledge of residential mortgages, so could he also consider such knowledge? The Defence responded he was “not sure, I’ll reserve comment, need to use what is in the case”. The Defence and Judge go back and forth with the Defense explaining there are different methodologies to calculate current property value. The Judge asked “Isn’t plain meaning of current market value, is what somebody would pay for something today? He attempts to compare to current value of a car, today, and market is market place. The Defence responded that the developer may pay more money for land anticipating value of future completed project, and that there is no evidence from experts on which evaluation method is the right one. The Judge adds, “Rezoning can change land value, future development can change market value. To take a charge on land, isn’t current value if the project does not go ahead. That isn’t in the stated evaluations. If it’s a material fact, isn’t it the value of the land today, in the event the developer party defaults?” The Defence responds that the duty to report is different, assessments were for the loan to value disclosures. Argues that the current market value was the assessment. The Judge adds, “If a buyer agrees on a big house and then discovers it’s a $500 Canadian Tire shack, isn’t that material and not what the investor agrees to?” The Defence responds: “will get to that. ” Then then head for a break. T he Defence goes back to the brokers’ role, and how brokers provided the investors with all the assessment information, it was not a secret to brokers, and reiterated the legal duty is on the brokers. He added that Fortress provided brokers all the assessment information. The Defence continued and said that the judge cannot rely on common judgment regarding valuation and suggests that property valuation is a murky area. The Judge stated- "that land is usually a stable value short of a market collapse or discovery of contaminants, see “as is” as fairly stable value, not speculative." The Defence went back to positioning Fortress as sourcing investments and dealing with developers and how investors should be reviewing documents and asking questions. Concerning the evaluation by Felice, the Defence stated that Felice was unclear about investors receiving the assessment information. Felice expressed concern to his management and his management told him not to worry. As per the email chains on the evaluation, he argued that the emails do not support undue interference in valuation information. Cheung’s initial land value was low, after back and forth with Vince and project documentation, moved to higher valuation. The 3rd email regarding the 9.5M Sky City valuation was to satisfy some mortgage legal requirement. The Defence added that there is nothing wrong with a developer facing firm to also have a focus on the end goal and working with regulated parties and using independent assessments using legitimate methodology. He then brought up the principal broker Anderson, who was the only broker to testify. The defense pointed out how the Email describes Legacy’s assessment approach and how Anderson agreed to the valuation being used. The Defence ended the day’s arguments by stating that investments were not risk-free, and that this case cannot be deemed as fraud.

We are in this Together. Help by Contributing. VOSMI is completely administered on a volunteer basis, with the goal to inform the Fortress investors of the latest developments in possible class action law suits, to clarify questions related to project status, and also simply to help investors understand how this fiasco happened to them. The costs related to VOSMI are two-fold. First, there are costs associated with running the website and email newsletters (via Wix platform). This cost is approximately $700 per year. The second cost is the research that has been undertaken with regards to Class Action Law suits. In order to launch a Class Action Law suit, an intense amount of research is required to review whether a law suit is viable. In 2019, an anonymous investor contributed $50,000 in 2019 in order to start the work. A further contribution of $10,000 was paid by investor Rose Ray to help cover legal and other costs. The work of the investigative team led by Darryl Levitt and his team , was instrumental in the recent class action law suit launched by Groia & Company law firm against Brad Lamb. Unfortunately, Groia & Company decided to not to pursue the law suit against Brad Lamb as they did not feel it was viable. On the other hand, the report created by the investigative team has also been shared with lawyers Mitchell Wine and Margaret Waddell who have current class action law suits in the works . We are asking the investors (and also any referral agents or brokers) to help compensate for our costs by contributing $25 or whichever amount you can afford. Simply click the button below, and you can either make the contribution with your credit card via Paypal, or an e-transfer via your own online banking to info@vosmi.ca . We appreciate your support. After all, we are all in this together. Contribute

Did you Know? What's an LTV and why does it matter? The loan-to-value (LTV) ratio shows how much money is being borrowed compared to the actual value of the land. The land is supposed to be the safety net for investors: if a project fails, the land can be sold and the loan repaid. A lower LTV means more protection, because the land is worth more than the loan. Typically, lenders will not lend more than about 85% of the land’s value. If the land is overvalued, investors are exposed to much greater risk. In the case of Fortress Real Developments, the land values were inflated, and investors were misled into thinking their money was secure, when it wasn't. For example, in the Collier Centre Project (Barrie, ON) investors lent $16.9 million to the project. They were told the land was worth $21.9 million, which suggested an LTV of about 77% -appearing safe. But in reality, an appraisal showed the land was worth only $7 million. The $21.9 Million figure was a future based evaluation. That meant the true LTV was over 200%. This was far riskier than investors had been led to believe.When the project collapsed, the land sale could not cover the debt. Since investors were also ranked fifth in repayment priority, there was no money left to pay them back . Another supposed advantage to investing in Fortress SMLs was the 8% interest rate. This rate 8% was far more attractive than GIC's, or bonds. What you weren't told, was about returns provided in the mortgage market. Under MBLAA, the following comparative information was required by law to be disclosed to you by FSCO licensed parties. Did you know that the private lenders who lend on first mortgages on commercial properties only lend 65% of their as-is appraised value at 9-12%. Land loans on farmland are done by few private lenders and they loan 50% of their as-is appraised value. Private lenders will provide first mortgages on houses up to 80% at 8% return, and on second mortgages lend up to 85% of as-is appraised value at 10-15% for a one year term. Compare these loan to values and returns, to your 8% return at well over 100% of as-is appraised value. Fortress did not provide as-is values. They provided opinions of value, which are not appraisals. Fortress opinions of value were based on future value. You were equity investors in these projects, which means that you should have received an ownership interest in the project and/or share of profits, as you were unknowingly were taking a lot of risk. Even as an equity investor you would not invest if your investment was much more than 100% of as-is appraised value. Fortress stated in their marketing and legal documentation that their LTVs were based on "as is" values- where in reality the LTVs were based on future values. This misrepresentation was detrimental to your investment, because if something went wrong with the project, there would not be enough assets to repay the investments as the loan was much higher than the value of the land. There are a few lenders who provide soft cost loans to developers by way of a first mortgage at 20-30%, plus fees, and these lenders do not postpone to construction financing. Meaning, if they lend money towards a project, they only do so on the condition that their position in rank cannot be moved or postponed. If they lend as 2nd mortgage, they stay at 2nd without any sneaky clauses that postpone them to 3rd. Do you think that this is a good comparison to the Fortress mortgages you invested in? Your return was 8%. Remember how you were promised 2nd mortgage, but you were moved like a hot potato to 3rd, 4th or even 5th mortgage? A private lender would never, ever, sign-off on such an agreement. The reason the lenders charge these rates and fees is because they know that they can lose money if the land is not rezoned and even if it is, that the developer does not get the necessary presales, that they will lose money. All the benefits went to Fortress. They collected a 35% fee and 50% of the profits. The investors took all of the risk and only were to be paid 8%. This structure was completely unfair to investors. Now you understand why the RCMP obtained its search warrant. Fraud, section 380 of the Criminal Code, includes misrepresenting the value and placing the victim at risk of economic harm.

The Developers who partnered with Fortress Over 25 real estate developers partnered with Fortress Developments. Lamb Development Corp partnered with Fortress on 14 real estate projects. Lamb failed to repay over $47 Million to the Syndicate Mortgage investors. Developer Pie Chart

Ottawa Protest- Parliament Hill, Ottawa Our third protest took place in Ottawa, October 18, 2019. Will the government increase funding to fight White Collar Crime? Many thanks to those who came out to support us!

" Independent Legal Advice" Most of our members received "Indpendent Legal Advice" prior to investing the Fortress Syndicated Mortgages. We conducted a survey from 154 investors. These are the survey results. ILA Member Survey Results.pdf