Claims against Waterloo mortgage fraudster now up to $147 million
Admitted fraud Stephen Heimbecker is now wrapped up in nine civil suits, with claims totalling more than $112 million, and has lost ownership of both his Waterloo home and Puslinch farm.
The Record previously reported that Heimbecker of Waterloo admitted in Superior Court to fraud involving money invested by Bradley J. Grant and Bradley J. Grant Investments between 2018 and 2021.
Heimbecker’s fraud involved mortgage sales that were to provide investor Bradley J. Grant and Bradley J. Grant Investments significant interest and fees. The money was invested through Nestig Inc., a Waterloo mortgage business run by Heimbecker and co-owned by his wife.
Superior Court documents from a Brampton court in December show Heimbecker admitted using Grant’s money, not for the mortgage investments, but for personal and unconnected uses, establishing “an overwhelming case of fraud,” Justice Leonard Ricchetti said.
Heimbecker filed for bankruptcy in November, owing about $35 million to creditors.
In February, J&N Holdings Inc. filed a $30-million claim against Heimbecker in Brampton civil court, pushing the amount of debt owed to investors and creditors up to almost $147 million.
Ted Michalos is one of the investors suing Heimbecker.
Michalos filed a civil suit in Kitchener Superior Court in December, seeking more than $2 million owed to him after investing with Heimbecker.
He first met Heimbecker sometime around 2015 by way of his daughters, who attended school with Heimbecker’s two girls.
Michalos, being a bankruptcy trustee, and Heimbecker, who was licensed as a mortgage broker at the time, made a few referrals to each other when they couldn’t help a prospective client, Michalos said.
Then in November 2022 Heimbecker pitched an investment to Michalos with a six-week turnaround. Michalos said no.
A few weeks later, Heimbecker asked again.
“Right day for him, wrong day for me,” Michalos said, saying he agreed to a deal in which he would
invest $1.5 million and see a significant return.
According to court documents for Grant’s civil suit, Heimbecker’s plan was to buy mortgages, bundle them and sell them to third parties.
On the days Grant was paid returns for his investment with Heimbecker, he would reinvest in the scheme for a larger amount.
However, Heimbecker has admitted the money was often being used to pay other debtors and to fund his lavish lifestyle instead.
Michalos says he is aware of creditors who received their payments immediately after he made an investment.
“I’m definitely put out,” Michalos said. “He screwed with my retirement a little but we’re not going to lose our house … there are a number of families that are, they’ve lost everything because of what this fella’s done. I just want to make sure that he’s not able to continue to operate.”
In January, Michalos filed a criminal complaint with Waterloo Regional Police.
“I’m familiar enough with the system that my expectations are pretty low about recovering any money,” he said.
“My hope from lodging the complaint with the police was, one, I think Mr. Heimbecker is a flight risk — he proved that at Christmas when he went to his house in Florida and I assume he had a nice time in the sunshine.”
Michalos said from Florida it would be easy to jump on a boat and “just disappear into the Caribbean some place.”
The second part of his concern is that nobody really knows where Heimbecker is.
The Waterloo home he shared with his wife and two daughters on Charing Cross is under notice of sale with three mortgages on it totalling almost $20 million.
Heimbecker’s farmland in Puslinch, purchased in April 2022 for $3.4 million according to Heimbecker, is also under notice of sale with mortgages totalling about $20 million.
“It’s going to get pretty easy to lose this guy,” Michalos said.
As part of the bankruptcy process it’s up to Heimbecker’s trustee to go to the Office of the Superintendent of Bankruptcy and request the RCMP to investigate, or the superintendent can make the request without the trustee.
That hasn’t happened. Michalos is one of the inspectors in the bankruptcy process and would be notified if such a move was made.
Michalos and Grant are not alone. More than 30 people are listed as creditors in the bankruptcy.
Heimbecker blamed his bankruptcy on “poor money management, poor decision-making, bad timing” and said he was directly or partly to blame because he didn’t conduct himself “in a proper manner” and “could have performed better,” as part of an examination he was compelled to participate in as part of the bankruptcy process.
According to court documents for Grant’s civil suit, Heimbecker’s plan was to buy mortgages, bundle them and sell them to third parties