U.S. Senior Housing Investors Sue Alleged Canadian Fraudsters

If a recently filed lawsuit in Illinois is to be believed, a slew of investors were tricked by Canadian fraudsters who proposed a grandiose senior housing joint venture.

Illinois-based developer SSU LLC, which does business as Sunny Side Up, filed a lawsuit for $36 million in damages against Ontario-based Paramount Equity Financial Corporation, Canadian businessman Enzo Mizzi, and others, accusing the defendants of orchestrating a fraudulent, senior housing-related scheme, according to the Cook County Record.

The defendants include Paramount, Mizzi, Brad Burdon and Chicago-based firm Green Bear Real Estate Capital LLC. Green Bear includes representatives Ronald Gaither of Florida and Jonathan Greenspahn of Illinois, as well as Paramount founder Marc Ruttenberg of Ontario.  


In spring 2016, Greenspahn allegedly reached out to Sunny Side Up, offering to partner with the company to purchase multiple senior housing communities in Illinois and Wisconsin, the lawsuit says. The partnership, Greenspahn reportedly told Sunny Side Up, would hold onto the properties for approximately five years, and then sell them to institutional investors or a real estate trust. 

Greenspahn and his partners suggested investing more than $125 million in the endeavor, according to the lawsuit. Sunny Side Up thought the undertaking would be “tremendously profitable,” the complaint says.

After Sunny Side Up identified properties to acquire, however, Greenspahn and Mizzi allegedly started to make excuses for postponing closings, and by January had ceased communicating with Sunny Side Up.


Specifically, Sunny Side Up had sought to purchase senior housing properties in Random Lake, Chilton and Pewaukee, Wisconsin, in addition to 14 skilled nursing facilities with a total of 1,452 beds in Illinois, according to Cook County Record.

Sunny Side Up eventually filed suit against the defendants in March, requesting more than $36 million in damages.

Meanwhile, financial regulators in Ontario, Canada, announced at the end of May that a receiver had been named to take over Paramount’s operations, alluding to Paramount’s ongoing attempts to raise millions of dollars even though provincial officials had told Paramount to stop raising funds from investors in June 2016.

Additionally, regulators reportedly believed that Paramount had fraudulently raised over $100 million from individual investors, “lying to investors about where their money was being invested, the risks of the investments, and Paramount secretly taking a 50% ownership interest in investments and other fees and commissions without telling investors,” the complaint says.

All the while, Paramount, Mizzi, Greenspahn and their representatives never made “SSU aware of the enormity of the fraud committed by Paramount,” according to Sunny Side Up.

Written by Mary Kate Nelson

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