Police probing ‘construction fraud’ allegations involving Tony the Contractor and Harold the Jewellery Buyer

The renovation and mortgage scheme that left 75-year-old retired Toronto nurse Judy Allen in “financial ruin” — owing $1.5 million and her bungalow in shambles — is being investigated by the Toronto Police fraud squad.

Detectives this week executed a search warrant at the North Toronto home of Tony Sinopoli, the contractor who is one of the two men Allen says has caused her to lose the equity in her home of 35 years. Police from the Financial Crimes Major Fraud Section are probing a case featured in a recent Star story, which described how Allen hired Sinopoli to do renovations, he directed her to two mortgage lenders, and within a space of eight months $1.5 million in high interest mortgages were placed on her home. Four of those five mortgages had an interest rate of 22 per cent, along with hefty fees, and came from Harold the Jewellery Buyer — Harold Gerstel. The work on Allen’s home appears shoddy and was not completed.

Police say they are investigating the involvement of both Sinopoli and Gerstel. Both men have told the Star they have done nothing wrong. No charges have been laid in the case.

In an interview after the Thursday morning search, Sinopoli said he was not at home when detectives showed up, as he was at the hospital getting kidney dialysis treatment. Sinopoli, the contractor who was hired by Allen, says he is partially blind and “subbed out” the work to other contractors.

Asked what police were looking for during the search of his home, Sinopoli replied: “I have no idea.” He said only his son was present when detectives arrived. “Nobody knew anything,” he said.

Gerstel did not respond to a request for comment regarding the police investigation.

Toronto Police say they are looking into three other complaints regarding Sinopoli’s work as a renovator. Sinopoli, told by the Star about this, said he was surprised. “I don’t understand what other cases people are coming up with,” he said. Told that the allegations against him were of contractor fraud, “I honestly do not believe that. Not a million million million per cent.”

In Allen’s case, the retired nurse has severe arthritis and uses a walker. She decided she wanted to make her home “open concept” and picked Sinopoli’s name out of a local newspaper. The city work permit taken out by Sinopoli does not cover the full scope of the project, which included knocking down an exterior wall and building a solarium. In its investigation, the Star discovered numerous deficiencies in the work that was done — wood joints are coming apart; there are several plumbing leaks; no safety railings on a narrow deck; there is crumbling stone work; the narrow “heated ramp” off her porch barely accommodates her walker; and the electric heating coils in the cement never worked. There’s also a growing black mould problem in the new garage because it leaks and the drywall was installed tight to the floor. Rats have moved into her basement, and a water leak during the renovation destroyed many of Allen’s possessions.

Sliding doors in the solarium do not open properly. One handle broke off immediately. The new addition was installed without a full foundation — and a rickety plywood “skirt” surrounds the bottom of the addition, the underside already open in places to the elements.

Allen, the homeowner, said she is pleased the police are investigating and she lauded the efforts of Detective-Const. Dana Clark, the lead officer on the case.

“Detective Clark is like a dog with a bone. He is determined to get to the bottom of this,” Allen said.

Police say they are probing three other “allegations of construction fraud” related to Sinopoli in the GTA, the detective told the Star (these three allegations do not involve Gerstel).

“We are investigating four separate incidents (one is the Allen case) regarding Mr. Sinopoli, and two of them involve elderly people,” said Clark. The allegations in all cases are that money was paid for renovations that were not completed. One of those allegations involve a homeowner in Toronto in his 70s, dating back to 2016. The other two allegations were in Mississauga, one in 2015 and one in 2011.

As to Gerstel, police say they are investigating his involvement in Allen’s case, but did not provide details. One issue the Star brought up was whether Allen was properly informed of what she was doing when she took out the mortgages. Allen said she was referred to a lawyer by Gerstel.

Speaking to the Star through his lawyer, Melvyn Solmon, Gerstel previously said he did nothing wrong.

“As long as my client advanced money he was the nicest guy, and when she did not honour her obligations under the mortgages and he took steps, he became (the) villain,” Solmon said, in answer to questions sent by the Star to Gerstel and Solmon.

In the search of Sinopoli’s home, police were seeking renovation and banking records. Sources say that when police went through Sinopoli’s property they noticed a newly constructed shed in his backyard, clad in barnboard that appeared identical to the barnboard Allen purchased for her renovation. Allen’s backyard shed, constructed (Sinopoli told the Star) by a relative of his, is unfinished — the barnboard cladding was never installed.

The Star asked Sinopoli about this. Sinopoli said that when he built the shed at his own home he did use barnboard purchased for Allen’s home, but he said he used “cut pieces … scraps” that were left over from his work at Allen’s home.

“The funny thing is,” Sinopoli said about his own shed, “it’s not even finished.” The Star pointed out that Allen’s shed, which Sinopoli said was worked on by his stepson, is also not finished. “That’s not my problem,” Sinopoli said.

As to Gerstel, a cash-for-jewellery buyer who now offers mortgages, Sinopoli said he is in the dark. “I don’t care what he did, I don’t know what he did, all I know is he put mortgages.” Sinopoli said it is not unusual for people in his line of work to be criticized. “Remember one thing, people paint an ugly picture of other people,” he said. “There’s always two sides to a story,” adding, “everybody always wants to point the finger at the contractor.”

Sinopoli said “Judy Allen knew exactly what she was doing.”

Allen, in interviews with the Star, said that she wanted a simple renovation and before she knew it, her house was heavily leveraged and the work was, in her opinion, poorly done and unfinished. Allen said (and Sinopoli confirms) Sinopoli referred her to Harold Gerstel to get mortgages to pay for the renovation.

Asked if he was concerned he would be arrested, Sinopoli replied: “It is what it is.”

Gerstel, who holds four of the five mortgages on Allen’s property, has sent her legal papers saying she is in default of the mortgage payments and he intends to have her property sold. The terms of the Gerstel mortgages required Allen to pay all interest plus lending fees up front. There were no monthly payments. There is also a proviso that states Gerstel can extend by three months the term of the mortgages and charge interest on the principal equal to 59.9 per cent. In Canada, the “criminal rate of interest” is 60 per cent. With the five mortgages and these additional charges (the three-month term has kicked in) it appears there is no equity left in the home for Allen if it is sold.

Sinopoli told the Star he has had communication with Gerstel, but none recently. He said after he received notice from Gerstel that he was moving to take control of her property and sell it, Sinopoli said he reached out to Gerstel and tried to get him to stop.

“Why are you guys pushing for foreclosure?” Sinopoli said he asked Gerstel. “You’ve made a s– ton of money on interest rates … and now all of a sudden you are pushing for foreclosure?”

Police have asked anyone with information about the case to contact Detective Clark at dana.clark@torontopolice.on.ca or to call him at 416-808-7318.

Meanwhile, Allen is set to move out of her house in June, and into a retirement home. She said she has enough money to live there for one year. She is not married and has no children.

In a last-ditch effort to mount a fight to regain at least some of the equity in her property, Allen has a gofundme page set up with the help of realtor Jamie Erlick, who was the one that contacted both the police and the Star when he learned of her plight.

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