Charles William Funaro and Gino Muoio Holdings Inc. say they are owed nearly $1.63 million for a mortgage on a condo at 1281 Cordova.
The mortgage lenders for a luxury Coal Harbour condo under a freeze order because of an alleged $30-million crypto-currency fraud have filed a court application to be repaid.
In a suit filed in B.C. Supreme Court on June 25, Charles William Funaro and Gino Muoio Holdings Inc. say they are owed nearly $1.63 million for a mortgage on a condo at 1281 Cordova, which includes the $1.6-million principle and interest.
The pair issued the mortgage to Kevin Patrick Hobbs and Lisa Angela Cheng on Dec. 20, 2018.
“Demand has been made on the borrowers for the payment of the mortgage indebtedness, but the borrowers have failed or refused to pay these monies,” says the application.
The condo is under a B.C. Supreme Court freeze order because of a Civil Forfeiture Office action that seeks to have it forfeited as proceeds of crime. The condo is valued at $4.33 million, according to the B.C. Assessment Authority.
The civil forfeiture suit also includes two Range Rover SUVs and funds from Bank of Montreal accounts.
In the civil forfeiture suit, Hobbs and Cheng, who headed up a pair of tech firms, are accused of fraud, money laundering and tax evasion.
They have both denied perpetrating the alleged $30-million fraud involving an initial crypto-coin offering and maintain that they run a legitimate business.
A trial for the civil forfeiture suit has been set for May 2021.
In the mortgage lenders’ court application, they are seeking an order for Hobbs and Cheng to pay the amount owed. If the mortgage is not repaid, the property should be foreclosed and sold, says the application.
If the property is to be sold, Funaro and Muoio Holdings Inc. have asked to have exclusive conduct of the sale.
No response has been filed, by Hobbs, Cheng or the civil forfeiture office.
There is also a builders’ lien of $13,263 on the condo, according to records of the Land Title and Survey Authority of B.C.
According to the B.C. Civil Forfeiture Office’s allegations, Hobbs and Cheng ran Vanbex Group Inc. and Etherparty SmartContracts Inc., which launched a cryptocurrency coin called a FUEL token, for which they raised money from investors by “deceit, falsehood or fraudulent means.”
An RCMP investigation determined they raised more than $30 million “by falsely representing corporate investment opportunities … knowing they did not intend to use the invested funds to develop products they were marketing but rather with intention to misappropriate the corporately invested funds raised for their own personal benefit,” the claim’s statement says.
In their response, Cheng and Hobbs say Vanbex did not solicit funds from investors for the development or distribution of the FUEL token and did not claim the value of the tokens would increase.
The terms, conditions and risks of buying the tokens were laid out in documents prepared by counsel, says the response.
The civil suit alleges that the couple attempted to liquidate their assets, including by taking out the $1.6-million mortgage, when they became aware of the RCMP investigation, a point the pair also denies.
Neither Hobbs nor Cheng have been charged criminally, according to a search of online court records.
A criminal conviction is not necessary to launch civil forfeiture suits, which have a lower threshold for convictions than criminal cases, a balance of probabilities rather than beyond a reasonable doubt.