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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.

Feb 3, 2020 Watch Rose Ray's Update regarding our potential class action law suit.

Did you Know? Did you know that the Loan to Value Ratios (value of land compared to the loans provided by the investors for the Fortress projects) far exceeded the Private Lender industry standard? Read more about it here. Did you know that once the RCMP were made aware of the Fortress Syndicated Mortgage fraudulent activity, it only took them 1 month to commence the investigation? How is it then, that FSCO was alerted on multiple occasions since 2011 by numerous people of Fortress SMI activity, however they did not act until after the November 2017 Reuter's article ? Justice Michael Brown issued the RCMP search warrant which was executed on April 13, 2018, as set out in the Globe and Mail story. In order for Justice Brown to issue the search warrant he had to find that there were reasonable and probable grounds that fraud was committed. The following are extracts from the sworn information and attached is part 1 of 6 parts. Extracts from the sworn information: "32. Investigators believe that the key aspects of this Fraud occurred from 2012 to 2017 and are as follows: a. Syndicated Mortgage Investors were presented with inflated “as is” property values securing their syndicated mortgage investment. b. Loan to property value ratios that are in excess of 100%. c. Promotion of the Syndicated Mortgage as RRSP eligible, when the investments that investigators have examined are not RRSP eligible and could be subject to adverse taxation by the Canada Revenue Agency. d. Investment funds being used for purposes other than what was disclosed to investors. A portion of investor funds are not directed to the development project and instead are retained by Fortress Real Capital Inc. at the time of placement of the loan. 33. As a result of the inflated current as is land valuations, investigators believe that there are currently millions of investor dollars, including retirement savings, where the amount of mortgages on the property exceed the current value of the property. This is contrary to what was told to investors. This has created a risk of detriment to the financial and real estate market." The full RCMP document is available here. After you have read this document you will have a better understanding of how you were defrauded. So far CRA has not taken any action despite obviously knowing that the mortgages were not RRSP eligible. If they did take action, the penalty is 50% of the amount you invested plus interest from the date you invested. RCMP Sworn Information.pdf

About The Investors/VOSMI VOSMI is a group of victims who invested in Syndicate mortgage investments through Fortress Real Developments. A syndicate mortgage is a group of individuals who lend money privately to a borrower to finance real estate developments, such as residential condo buildings. The investors were led to believe these were safe, low risk investments. The Real Estate Developer Fortress Real Developments Inc., based in Richmond Hill, ON was a real estate developer that was active between 2008-2018. Their portfolio spanned residential and commercial projects. Fortress raised about $900 million through syndicated mortgage loans from around 14,000 investors. In April 2018 the RCMP IMET raided the headquarters of Fortress RDI. The investigation revealed inflated property values and misuse of funds. The losses for the investors were substantial, with some losing their life savings. Although many experts warned the financial regulators (FSCO) about Fortress & their practices as early as 2012, they did not take action until 2018. RCMP In 2022, co-founders Jawad Rathore and Vince Petrozza were charged with Fraud related to their SML scheme. Criminal Trial In May 2025 both were convicted of fraud over $5000. The sentencing hearing (where victim impact statements will be heard), is to take place December 3, 2025. Are you a VOSMI? Did you invest in a Fortress Real Developments Syndicated Mortgage? Are you a victim of syndicated mortgage investment fraud? Were you promised a safe investment with 8% returns? If you are a victim? Join our private Facebook group .

Index CHAPter 1 baited chapter 2 blinded by those we trusted chapter 3 co-conspirators

Proactive vs Reactive Regulators David Franklin has recommendations on how regulators need to fulfill their government mandate to protect the public. The securities regulators including the Ontario Securities Commission (OSC), and the mortgage regulators, ie Financial Services Regulatory Authority (FSRA), which replaced the Financial Services Commission of Ontario (FSCO) and the law societies including the Law Society of Ontario (LSO) only take action after investors have lost money. Current Complaints Based System These regulators complaints based, and despite knowing that a lot of investors, including wealthy individuals, do not read documents and are financially illiterate, take the position that because there is disclosure, they have protected the public. Under this system, once the investors have lost their money, if they have any money left, they have to sue to be compensated. The court process is costly, and lengthy, and there is no certainty for these investors that they will win. I have been told by investors that using the legal system is thought to be “throwing good money after bad”. In addition, most defrauded investors of the Fortress fiasco, (14,000 investors) have not taken action. Proposed Proactive System-Undercover Agents & Experts Securities regulators and mortgage regulators should share the same staff to act as undercover agents to learn what is being offered in the marketplace. These experts would attend investment seminars, industry association conferences, continuing education seminars, read advertisements, listen to radio and tv infomercials, and other promotional materials, search the internet and YouTube, and as well local and ethnic newspapers. They 'bait' the promoters of these products and act as interested investors. When they are presented with opportunities, they would need the expertise to determine if they were fraudulent or being misrepresented. Once they determined the investment is fraudulent, they would file their report with the regulator, who would the have knowledgeable inspectors or examiners who would go to the promoters to obtain all the documents related to the investment. These parties would not only be looking for the compliance with the respective legislation, but also with the Criminal Code. If they determined there was non-compliance, they would then take action, including contacting the police. Each province should have specially trained staff who have the skills and expertise to investigate and take action. These police forces should have either staff or retain experts in forensic accounting and law. Perhaps the regulators and police could have the same staff or retain the same forensic accountants and lawyers. Funding for this should come from fees charged to those regulated and not from the government/public. Tougher Laws to ensure Conviction Laws should be ammended/created in order to facilitate this and as well to ensure that the perpetrators can be convicted. The parties involved in exempt market securities, real estate and mortgage investments, usually need lawyer’s assistance in facilitating their frauds. Enablers with Benefits ‘Enablers’ in the form of lawyers, accountants, and officials in key ‘access’ positions not only facilitate corporate crimes but are also often the beneficiaries. These facilitators are not always merely ‘hired’ experts but may be the creators and drivers of the international schemes and set-up and head the criminal corporate operations. The law societies should have rules that restrict lawyers from facilitating frauds. Lawyers are required to know who their client is and not assist them in committing illegal acts, which includes fraud. Any seasoned lawyer, after discussions with their client, would know if their client was retaining them to facilitate a fraud and should be obligated to refuse to act. If that lawyer acted, then the lawyer and his firm, should be responsible for all of the losses. For example, what seasoned lawyer after learning that Jawad Rathore had been banned by the Mutual Fund Dealers Association (MFDA) in 2005 and both Jawad Rathore and Vince Petrozza had been sanctioned by the OSC, would agree to act for them in their syndicated equity development mortgage investment proposal, especially since the returns offered to investors was below market rate? Black Bear Homes Fraud Unseasoned lawyers may be attracted to the high volume deals. The law societies should have rules that require and limit lawyers who specialize in areas of commercial real estate investing. The lawyer who acted for the 120 Chinese Black Bear syndicated mortgage investors who lost $9 million should not have been allowed to act given the operator of Black bear Homes, Gary Fraser, was a seasoned criminal. https://www.cbc.ca/news/canada/toronto/syndicated-mortages-1.4078124 Compensation Fund In addition to these recommendations, the provinces should create compensation funds, funded by the regulators, to compensate victims when “a deal falls through the cracks”. These funds could have limits so that the regulators are not insurers of these failed investments. Perhaps a limit of $100,000 per investor as is the case with the Canadian Deposit Insurance Corporation. What do you think about these recommendations?

pName iLastName iFirstName Invested Amount