An Ontario man has pleaded guilty to fraud and illegally distributing securities after raising nearly C$5.3 million from investors through what was presented as a mortgage investment corporation, according to the Ontario Securities Commission.
In an announcement published on 15 July, the OSC said Ian Ross McSevney admitted to fraud and distributing securities without filing a prospectus, contrary to Ontario securities law. McSevney was the sole directing mind of Altmore Mortgage Investment Corporation, which raised money from approximately 30 Ontario investors between May 2015 and May 2019.
The case is one of the latest enforcement actions targeting investment schemes that promised exposure to real estate-backed lending while allegedly using investor funds for purposes other than those represented.
Investors Were Told Their Money Would Fund Mortgages
According to the OSC, investors were led to believe that Altmore Mortgage Investment Corporation would use their money to originate mortgages and other loans secured by real estate.
Mortgage investment corporations are commonly used in Canada to pool investor capital and finance residential or commercial mortgages. Investors generally expect their returns to be generated from interest paid by borrowers and supported by underlying real estate collateral.
The OSC alleges that Altmore did not build the mortgage portfolio investors had been promised.
While some legitimate real estate loans were arranged, the regulator said most of the C$5.3 million raised was not invested as represented.
OSC Says Investor Money Was Used To Repay Earlier Investors
According to the regulator, approximately C$3 million was repaid to investors during the scheme, with those repayments typically funded using money contributed by newer investors rather than investment returns generated by mortgage lending.
The OSC also said McSevney directed approximately C$1 million toward credit card payments, family members and relatives.
The regulator noted those payments were funded through a combination of investor money and other sources.
Although the OSC did not describe the operation as a Ponzi scheme, the allegation that investor repayments were largely financed with funds from subsequent investors reflects a pattern commonly seen in investment fraud cases where promised investment returns are not supported by the underlying business activity.
Mortgage Investment Corporations Face Increasing Regulatory Scrutiny
Mortgage investment corporations have become an increasingly important source of private real estate financing across Canada, particularly as banks tightened lending standards in recent years.
Many operate legitimately by providing investors with exposure to diversified mortgage portfolios. However, securities regulators have repeatedly warned investors that private mortgage offerings carry significant risks, particularly where investments are sold outside public markets.
Because many mortgage investment corporations raise capital through prospectus exemptions, investors often receive less disclosure than they would when purchasing publicly listed securities. Regulators therefore continue to focus enforcement efforts on firms and individuals who misrepresent how investor funds will be used.
OSC Says Guilty Plea Reinforces Investor Protection
Bonnie Lysyk, Executive Vice President of Enforcement at the OSC, said the outcome demonstrated the regulator’s commitment to protecting investors and maintaining confidence in Ontario’s capital markets.
“Investors should expect that their money will be used as represented. Mr. McSevney raised millions from investors for what was presented as a mortgage investment corporation but most of those funds were not invested as promised. This has no place in Ontario, and this outcome reinforces our commitment to protecting the integrity of our capital markets.”
The OSC’s Criminal Investigations and Prosecutions team led the investigation. The unit investigates securities-related fraud, market manipulation and other serious breaches of Ontario securities law, while prosecutions involving Criminal Code offences are conducted by Ontario’s Ministry of the Attorney General.
Sentencing Process Continues
McSevney’s case will return to court on 8 September 2026, when the parties are expected to schedule a date for sentencing submissions.
The guilty plea resolves the underlying allegations regarding fraud and illegal securities distribution, although the court has yet to determine the appropriate sentence.
The OSC reminded investors to verify the registration status of any individual or company offering investment opportunities and to review available investor education resources before committing funds.
The case serves as another reminder that investments promoted as being secured by real estate still require careful due diligence. The presence of mortgage or property-related terminology does not itself guarantee that investor funds are being deployed as represented, making regulatory oversight and verification an important part of the investment process.