Elderly Romspen Investors Forced To Eat Cat Food As Romspen Reports Investor Fund Profits Increased 8% Annually Since 2019

Elderly Romspen investors are being forced to eat cat food. Why? Rospen hasn’t paid full investor redemptions since December 2019. Yet, Romspen’s financial filings show the company has outperformed projection every since 2019. In addition, their filings show their funds have increase 8% annually since 2019.

According to Rospen, this applies to all of Romspen’s affiliated companies and funds. So, why hasn’t Romspen leadership paid full investor redemptions since 2019? What is Romspen doing with the funds?

Are Romspen partners like Wesley Roitman pocketing bonuses? While their mom and pop investors struggle and forced to live off cat food?

These are the million dollar question investors are asking. It’s also the question, guys like Roitman, don’t want to answer.

As a result, Romspen investors who are mostly senior citizens living on a pension are hopping mad. They invested their retirement savings into Romspen investment funds and rely on their investor redemption payments for their everyday needs. Now some senior citizen investors have resorted to eating cat food in order to survive.

How Romspen is Scamming Eldery Romspen Investors

Romspen Withholds Partial Redemption Canadian and American retirees are always prowling the internet for ways to enhance their fixed incomes. Retirees are old school and believe real estate is a safe investment even after experiencing the financial crisis of 2008. That was until they invested with Romspen.

So, elderly Romspen investors invested in Romspen because the company promised big returns on real estate. Soon they find the slick packaging from Toronto-based Romspen and their affiliated brokers like BridgeInvest and Eyzenberg & Company in Miami with promises of big payoffs.

Long story short, Romspen and their partners get these inexperienced investors all excited over the promise of big returns. The seniors fall for it and then throw their life savings at Romspen.

Unfortunately and unbeknownst to grandma and grandpa, Romspen on the surface appears to be a Ponzi scheme. However, it’s a little more complicated as to why Romspen fails to pay their investor redemptions.

Romspen’s current business model relies heavily on a steady flow of fresh flow of investor cash. This is because they need to pay investor redemptions to previous commercial loan investors. Yes, we know, it’s sounds like like a Ponzi scheme.

The reason for this is pretty easy. The majority of the loans made by Romspen have gone into default due to the company’s “Loan-To-Own” scheme (see below). As a result, the vast majority of their defaulted loans get tied up in endless litigation. Thus, not generating revenue for Romspen and Romspen investors not getting paid.

It’s no surprise that Romspen investors are getting aggravated with Romspen executives. Investors haven’t received a full redemption payment since April of 2020.

Romspen Is Scamming Grandma And Grandpa By Lending Money On Projects That Don’t Generate Revenue

The reason why Romspen doesn’t fully pay investor redemptions is simply because they don’t have the cash. But, why? Simply put, Romspen is lending against projects that don’t generate any revenue or income.

The borrowers aren’t going to pay back the principal and interest until they can develop the project. That could take nearly a decade.

Braden Maccke at Deep Dive pointed this out a year ago:

“Romspen is lending against projects that don’t generate any income! The borrowers aren’t going to pay back the principal and interest until they can develop the project, then sell it, or borrow against it at a higher valuation.

Elderly Romspen Investors Screwed In The Company’s Loan-To-Own Scheme

So to keep investors and their families from filing complaints with American and Canadian securities regulators, Romspen resorted to a shady lending scheme known as, “Loan-To-Own.”

Lexology defines “Loan-To-Own” is defined as follows:

“A loan to own transaction is the acquisition of a secured debt position in order to influence control and ultimately acquire ownership of a target business (and its assets).”

Romspen’s business model is to find inexperienced entrepreneurs like fake Miami developer Caroline Weiss or the three stoners from Colorado. Then lure them in with big promises. Then throw a big wad of cash at them. Cash that they know the borrowers will never be able to pay. This sets it up so Romspen can take over the project. Romspen can either sell property at a huge profit. Alternatively, they could complete it and pocket millions more.

According to one source, 40% of all the loans that Romspen issues results in them taking ownership of the respective projects.

In the bankruptcy proceedings, companies that ascribe to the Loan-To-Own model will devalue the project less than the loan amount in order to increase their profitability to obtain and sell the property.

However bankruptcy cases could drag out for years. This means Romspen’s investors aren’t get paid during this time. Even if Romspen does eventually take over the property.

Romspen Traps Inexperienced Borrowers

Romspen waits until the last minute and does not disburse funding to the borrower. This results in the borrower passing the maturity date of the agreement.

So, what might their motivation be? One source indicated that it is directly related to two key factors. The first being to force the borrower into a default on the loan. This would allow Romspen to start the process of taking ownership of the project. It would also allow Romspen to increase the interest rate to a point where the borrower is forced to go into bankruptcy.

Once Romspen highlights that a default has happened, the borrower has 45 days to pay the balance. If that doesn’t happen, Romspen can foreclose on the property.

Thus, the failure to pay results in an increased default rate. This toxic spiral can put the borrower in a point where they must borrow from another lender or sell property to pay the interest. In most cases, Romspen wants the companies to drown in the endless sea of debt in order to simply own the project for themselves.

However, it turns out it, this business model has turned out to be a trainwreck for the company. This business model also explains why Romspen is having problems paying redemption payments to their investors.

At the end of the day, it appears Romspen is running a Ponzi scheme on senior citizens to cover up a shady “Loan-to-Own” scheme that is now blowing up in their face. Grab the popcorn because the Romspen implosion is imminent.

This Article Originally Appeared on MFI-Miami.com.

Check Out These Government Websites If You Feel You Are A Victim Of Investment Fraud By Romspen

How To File A Complaint In Canada:

Contact The Canadian Investment Regulatory Organization (CIRO) At 1.877.442.4322 For More Information. You Can Also Email Them At complaints@mfda.ca

If That Doesn’t Work, Contact Finance Minister Dominic LeBlanc:

Dominic.Leblanc@parl.gc.ca

You Can Also Contact His Office On Parliament Hill At 613-992-1020 Or His Office At His New Brunswick Office at 506-533-5700.