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‘Making money off trusting, innocent people’: Investment company 1PLUS12 sued for almost $2M over alleged ‘fraud’

WATCH: 1PLUS12 has links to an alleged $17-million mortgage fraud in Toronto and one of its consultants was involved in a B.C. financial company that lost creditors and investors almost $19-million, according to claims made in court documents.

The Toronto business bills itself as an “international investment training company,” promising to make its clients rich using a “unique, uncommon” approach to investing.

But a Global News investigation has found the company, 1PLUS12, is currently facing two lawsuits totaling $6.4 million that allege fraud or misrepresentation and is linked to an alleged $17-million mortgage fraud involving high-end real estate across Toronto.

One of their consultants, who recently changed his name, is also behind the B.C. company, Dexior Financial, that, according to claims in court documents, lost investors and creditors almost $19 million.

“They are making money off trusting, innocent people,” said Roman Turlo, a former client who is now suing for almost $2 million, alleging 1PLUS12 “fraudulently misrepresented” real estate opportunities.

WATCH: Toronto-based investment company under legal fire. Sean O’Shea reports

Toronto-based investment company under legal fire
Toronto-based investment company under legal fire
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1PLUS12 claims to use a mix of “local and international real estate” and “optimized legal & tax strategies” to develop “people into financially independent & free human beings.”

The company continues to operate unregulated by the Ontario Securities Commission (OSC) or Financial Services Commission of Ontario (FSCO), a watchdog for the mortgage industry. 1PLUS12 has several upcoming investment workshops advertised in April and May.

Experts say the allegations related to 1PLUS12 raise questions about a problem of fraud plaguing Canada’s investment and real estate sectors that is in the hundreds of millions of dollars.

1PLUS12 CEO Glenn Estrabillo declined multiple requests from Global News for an interview, but said in a statement the company “stands by its investment strategy” and is fighting “false and defamatory allegations” against the company in court.

None of the allegations have been proven in court.

12 investors + 1 company

Pictured from left, Sai Mohammed, James Destephanis, Dominic Kawa, and Glenn Estrabillo.
Pictured from left, Sai Mohammed, James Destephanis, Dominic Kawa, and Glenn Estrabillo.

In 2013, Turlo, a former Toronto high school teacher who began flipping houses, started investing with 1PLUS12 — a company that involves Glenn Estrabillo, Dominic Kawa, Sai Mohammed, James Destephanis and lawyer Jonathane Ricci.

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After taking financial seminars with the company, he claims he spent more than $700,000 as part of an investing group with 11 other people.

1PLUS12 made two promises, according to Turlo’s lawsuit: exclusive mentoring and unique real estate investments with returns of more than 20 per cent.

“We were the 12 and they were the one. Hence the name 1PLUS12,” Turlo said, who for years had a business relationship with Estrabillo. “They were kind of our mentors or guides.”

WATCH: Turlo explains what he says was pitched to 1PLUS12 investors

Roman Turlo explains what he says was pitched to investors by 1PLUS12
Roman Turlo explains what he says was pitched to investors by 1PLUS12

Turlo claims the group, incorporated as a company called Mon8ta, spent just over $5.6 million on 11 Ontario properties and one in Belize — pitched as “high opportunity investment with low risk.”

“They presented this deal to us,” he said. “We would choose, using their parameters that they were teaching us, to decide whether we wanted to go forward.”

The first few years were exciting, according to Turlo, full of “team-building” dinners with other investors and even vacations together.

“We were encouraged to raise more and more capital with the illusion that returns were going be an amazing 20 to 22 per cent,” he said.

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Turlo became suspicious in December 2017 when he obtained a title search for a property in Welland, Ontario. According to Turlo’s lawsuit, his group had invested more than $400,000 into the property.

“It sold for $450,000 as of December 21, 2017,” he said, claiming it had been sold without their knowledge.  “That was my first clue that something was something was off.”

1PLUS12 links to alleged $17M fraud

During a meeting with 1PLUS12 in April 2018, Turlo said they were told that “all investments” with the exception of two were in “good standing and performing well.”

However, he later discovered there was “no record” the group had actually invested in any of the properties, according to his lawsuit, and that “part or all of the money” was given to a man identified as Arash Missaghi as “part of a real estate investment fraud perpetrated against Mon8ta and its shareholders.”

WATCH: Lawyer Mitchell Wine questions if money was ever invested

‘Something fishy is going on’: Lawyer says there is no evidence that investors’ money was invested
‘Something fishy is going on’: Lawyer says there is no evidence that investors’ money was invested

Missaghi was charged by Toronto police in March 2018 in an alleged mortgage fraud investigation dubbed “Project Bridle Path” involving high-end real-estate around Toronto. Police allege he was involved in a series of fraudulent transactions that netted around $17 million in a scheme that dated back to before 2013.

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Mitchell Wine, a lawyer representing Turlo, said there is “zero evidence” that the group of investors actually owned anything.

“They were told that the investments were going into equity and or mortgages,” Wine said. “When I’ve looked at the abstracts of title, which are the proof of who owns what, we don’t see that money was invested. So something fishy is going on.”

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The company said it’s pursuing “aggressive legal action” against Arash Missaghi, who it argues “perpetrated sophisticated fraud against 1PLUS12.”

“1PLUS12 finds its position on various mortgages compromised and is taking every legal action afforded in law to protect its capital and mortgage positions. As our findings uncover any fraud perpetrated by Arash Missaghi, we will obtain enforceable court decisions and remedies to mediate for our positions,” Estrabillo said.

“1PLUS12 is reaching out to Toronto police to share what we know about Missaghi’s fraudulent activities, provide evidence where appropriate, and continue full cooperation.

READ MORE: Canadians’ debt remains ‘really high,’ but improving thanks to tight mortgage rules

As for the Belize property into which the group had allegedly invested $1.8 million, Turlo’s lawsuit claims investors never received any confirmation of security they held against the property.

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“The property is in poor repair and a visual inspection does not indicate that any investor money has been used to improve this property,” the lawsuit said.

Wine said his client was given very few details or documentation about 1PLUS12 investments.

“If I were an investor in 1PLUS12, I would start asking a lot of questions and I would start asking for paperwork,” he said.

Documents reviewed by Global News show that several properties the group had invested in were owned by Missaghi or companies he controls, including more than $1 million invested in 172 Hymus Road in Scarborough.

The property is part of an ongoing criminal investigation, Toronto police say.

Det. Adkin Holder, with the financial crimes unit, told Global News they are aware of 1PLUS12, but declined to answer questions citing the ongoing Bridle Path investigation.

 “If someone wants to come forward and report something in regard to 1PLUS12, we would gladly take that information,” Holder said.

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Investors were told they invested $544,000 into 2290 Saxony Road, a mansion in Mississauga in 2015. The property was foreclosed on and sold in 2016 and investors were never told about the sale or loss of their “investment”, according to the lawsuit.
Investors were told they invested $544,000 into 2290 Saxony Road, a mansion in Mississauga in 2015. The property was foreclosed on and sold in 2016 and investors were never told about the sale or loss of their “investment”, according to the lawsuit. (Screenshot/www.2290saxony.com)

Missaghi declined to answer questions from Global News about the allegations of fraud and ongoing criminal charges against him.

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Turlo alleges a number of the transactions were facilitated by Jonathane Ricci, whose office is located at 3230 Yonge St., the home of 1PLUS12. Ricci is currently suspended for “professional misconduct” by the Law Society of Upper Canada for failing to provide complete information and documents in relation to a 2015 investigation, related to “improper and possibly fraudulent real estate/mortgage schemes.”

READ MORE: Toronto’s real-estate market risky for money laundering, with $28B in opaque investments

Two other properties 1PLUS investors put money into are owned by companies linked to Sai Mohammed, according to the lawsuit.

An affidavit obtained by Global News shows that Sai Mohammed — whose full name is Sai Moshin Jiwani Mohamed — previously went by Mo Jiwani. Jiwani was involved with a company in B.C., Dexior Financial, that saw dozens of investors and creditors lose roughly $19 million in the late 2000s, according to claims in court documents.

An attorney representing Estrabillo, Mohammed, Kawa, Destephanis, and Ricci declined multiple requests from Global News for an interview to answer questions related to the lawsuits and connections to Missaghi.

Estrabillo’s company Curah Capital is now suing Missaghi for more than $8-million over alleged “fraudulent misrepresentation.”

Link to B.C. financial disaster

Sai Mohammed, a.k.a. Mo Jiwani is alleged to be linked to Dexior Financial in B.C. that lost investors and creditors almost $19-million, according to claims in court documents.
Sai Mohammed, a.k.a. Mo Jiwani is alleged to be linked to Dexior Financial in B.C. that lost investors and creditors almost $19-million, according to claims in court documents.

When Marianna and Willem Van Gogh see a picture of Mohammed, whom they knew as Mo Jiwani, they said it’s “shocking” to see him working for another financial company.

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“I don’t know how it’s possible that he hasn’t been stopped,” Marianna said. “I would run if I would see him.”

WATCH: Marianna Van Gogh describes losing money with Dexior Financial
Marianna Van Gogh describes losing money with Dexior Financial
Marianna Van Gogh describes losing money with Dexior Financial

The retired Alberta couple attended seminars with Jiwani, a self-described “wealth enhancement expert” around 2001. The couple said they sold their dairy farm in 2006 for roughly $1.4 million on Jiwani’s advice and invested with Dexior Financial Inc., which was developing vacation properties in B.C.

“When we questioned something, he became very aggressive and threatened with cutting us off,” she said. “We lost everything.”

The Van Goghs, who live in Calgary, were one of more than 60 investors and creditors who claim they lost nearly $19 million when the company went bankrupt in 2008, according to B.C. Supreme Court documents. Some investors alleged they were “defrauded.”

The Van Gogh’s dairy farm pictured near Busby, Alberta in 2003.
The Van Gogh’s dairy farm pictured near Busby, Alberta in 2003.

“Funds raised by Dexior were invested in a series of projects or investments that were ill conceived,” according to allegations in a B.C. Supreme Court document from 2011. “None of the projects ever produced any profits.”

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Jiwani is now listed as a consultant and senior employee with 1PLUS12, according to Turlo’s lawsuit.

A lawyer representing Mohammed declined multiple requests for an interview.

Toronto real estate lawyer David Franklin said the company appears to first gain people’s trust by teaching seminars before advising them on real-estate investments.

“They gain the confidence of these people, explain to them the great rates of return they can get and that they’re safe and secure,” he said. “And people hand over the money.”

Franklin warned there is little oversight by any regulatory agency when it comes to private investments and advised potential investors to speak with an attorney to review investments.

Where is the OSC and FSCO?

The 17th floor of 10 Queen St. West where the Ontario Securities Commission holds hearings into financial matters, is pictured March 2 2015.
The 17th floor of 10 Queen St. West where the Ontario Securities Commission holds hearings into financial matters, is pictured March 2 2015. Fred Lum/The Globe and Mail/File

Neither 1PLUS12, nor any of its consultants, are registered with the OSC, FSCO or the Canadian Securities Administrator — the umbrella organization for Canada’s 13 securities regulators.

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Bill Vasiliou, former Ontario registrar under the Mortgage Brokers Act, believes 1PLUS12 should have been registered as lender or administrator with FSCO, and the agency should investigate.

“The job of FSCO is to protect the public interest. They haven’t fulfilled that mandate on numerous occasions, big occasions,” he said. “The OSC, I think for them, this was under the radar.”

The scope of investment fraud is difficult to measure, as no organization collects statistics nationally or provincially. Both Franklin and Vasiliou estimate it’s in the hundreds of million in Ontario or even billions across Canada.

READ MORE: Ontario watchdog failed to check on risky mortgage brokers because of budget woes

Turlo said he believes the company is in control of $20-25 million of investors’ money and is surprised there is no “scrutiny” by any agency.

“I can’t believe that they’re not under some sort of investigation by the OSC or anybody,” Turlo said. “They have millions and millions of dollars of investors’ money.”

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Both the OSC and FSCO said they could not “confirm nor deny the existence of any specific complaints or investigations against individuals or businesses.”

“FSCO regulates mortgage brokerages, brokers, agents and administrators in Ontario,” Malon Edwards, a FSCO spokesperson, said in an email. “We can’t comment on real estate investments that involve individuals or entities we do not regulate.”

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WATCH: Real estate attorney says you should seek legal counsel before investing

Lawyer says you should seek legal counsel before investing
Lawyer says you should seek legal counsel before investing

Vasiliou, however, said the agency is ignoring their mandate by not investigating 1PLUS12.

“If an entity is engaging in activity that is regulated by FSCO, and is not registered or licensed to do so, it is the regulator’s responsibility to enforce the law,” he said. “They are not actively or proactively protecting the public interest.”

The OSC and FSCO advise investors to visit CheckBeforeYouInvest.ca, which contains a search for names of registered advisors.

“Investments sold in the exempt market, such as a private Real Estate Investment Trust (REIT), present heightened risks, including the potential to lose the entire amount invested,” Kristen Rose, OSC Manager of Public Affairs, said in a statement.

 Lawsuits against 1PLUS12

Turlo’s $1.9-million suit against 1PLUS12, Estrabillo, Mohammed, Ricci, Missaghi and others claims they defraud investors in the group by failing to present “bona fide” investments.

Wine said his client would never have invested with 1PLUS12 if the links to Missaghi were disclosed.

“Why would anyone invest with someone who’s been accused of mortgage fraud?” he said.

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A separate $4.5-million lawsuit filed by Sohail Shah against 1PLUS12 and Sai Mohammed alleges breach of contract, negligence and misrepresentation over a property in Yorkville, an upscale neighbourhood in Toronto in 2014. The property was also linked to Missaghi, the lawsuit alleges.

WATCH: Roman Turlo claims other 1PLUS12 investors might not get their money back

Roman Turlo claims other 1PLUS12 investors might not get their money back
Roman Turlo claims other 1PLUS12 investors might not get their money back

A statement of defence filed by 1PLUS12 and Mohammed deny the claims and that “all of the material facts” underlying Shah’s claim.

Turlo said he’s aware of other groups of investors who have recently agreed to work with 1PLUS12.

“I really feel sorry for the people who are really struggling and have their friends and [family] all investing,” he said. “I don’t think they’re going to get their money back.”

Turlo’s one recommendation when it comes to 1PLUS12: “Don’t invest any money with these guys.” Turlo’s lawsuit also names fellow Mon8ta investors who released 1PLUS12 of any financial responsibility.

Michelle Despault, CEO of Mon8ta, declined multiple requests for an interview but said they support the company’s “aggressive” legal efforts against Missaghi.

“1PLUS12 is engaged in aggressive legal efforts to secure its position as a legal creditor on properties it has mortgage security on, and in cases where the property is in litigation, recover mortgage monies invested in properties where Arash Missaghi controls those entities,” Despault said in a statement. “Mon8ta believes the robust legal response undertaken by 1PLUS12 is the best course of action and we look forward to our continued investment partnership with 1PLUS12.”

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“Mon8ta has done its own investigation into the claims and is satisfied that the substance of the allegations are false and without foundation.”

Read the full statement from Glenn Estrabillo, CEO of 1PLUS12:

“1PLUS12 finds its position on various mortgages compromised and is taking every legal action afforded in law to protect its capital and mortgage positions. As our findings uncover any fraud perpetrated by Arash Missaghi, we will obtain enforceable court decisions and remedies to mediate for our positions.

“1PLUS12 continues to pursue aggressive legal action to protect its mortgage capital and recover invested funds. In cases where our findings show Arash Missaghi perpetrated sophisticated fraud against 1PLUS12, 1PLUS12 is legally seeking justice.

“1PLUS12 is reaching out to Toronto Police to share what we know about Missaghi’s fraudulent activities, provide evidence where appropriate, and continue full cooperation.

“1PLUS12 is launching an independent third-party review of all investment activities involving Missaghi.

“1PLUS12 stands by its investment strategy and current investment portfolio.

“1PLUS12’s existing investment partners are confident in 1PLUS12’s investments and its leadership team.

“1PLUS12 is aware of false and defamatory allegations being made against it, and against Sai Mohammed and Jonathane Ricci, by a small number of disgruntled former investors.

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“1PLUS12 is fighting these false and defamatory allegations in court and stands behind its leadership team.

“1PLUS12 and its principals have already initiated defamation claims against certain of these individuals.

“1PLUS12 will not comment further on matters that are before the court.”

If you have any information regarding 1PLUS12 or are willing to share your story, please use the contact form below:

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