Executive Summary: Key Legal and Evidentiary Issues

• Tanya Crepulja and Steven Fontes invested $500,000 with Crystal Masterson and Michael Foley as part of a multimillion-dollar real estate Ponzi scheme orchestrated by Douglas Grozelle, and were never repaid their principal.
• Three properties were allegedly transferred by Crystal and Michael to non-arm's length parties after the Ponzi collapsed and after the Dourado Claim was filed, raising fraudulent conveyance concerns.
• Central to the motion is whether certificates of pending litigation (CPLs) should be registered on the three properties to prevent dissipation of assets pending the main action.
• Multiple "badges of fraud" were identified, including the rapid, off-market transfer of all three properties to close family and friends within 30 days, while Crystal acted as both the real estate lawyer and a defendant.
• Crystal Masterson has been criminally charged with fraud and consented to an interlocutory suspension of her licence to practise law.
• Costs of $38,000 (all inclusive) were awarded to the plaintiffs, apportioned among the defendants with the exception of Samantha Leask and Luigi Di Cicco, who successfully defended the motion.

Facts of the case

Tanya Crepulja and Steven Fontes, a couple, are among the victims of a multimillion-dollar real estate Ponzi scheme orchestrated by Douglas Grozelle ("the Grozelle Ponzi"), which collapsed around November 2022. The plaintiffs invested $500,000 with Crystal Masterson and Michael Foley and were never repaid their principal. Prior to this lawsuit, other investors had sued Crystal and Michael on April 6, 2023, in a separate proceeding referred to as the Dourado Claim. Crystal, who is self-represented, maintains that she was an innocent participant who herself invested and lost money in the Grozelle Ponzi. She has since been criminally charged and consented to an interlocutory suspension of her licence to practise law (Law Society of Ontario v. Masterson, 2025 ONLSTH 122). Michael Foley did not defend the lawsuit.

The properties at issue

The plaintiffs sought to register certificates of pending litigation (CPLs) on three properties they alleged were fraudulently transferred by Crystal and Michael to non-arm's length parties in order to evade creditors after the Ponzi collapsed: 2062 Hadfield Court, Burlington, ON ("Hadfield"); 4144 Milcroft Park Drive, Burlington, ON ("Milcroft"); and 90 Coles Avenue, Vaughan, ON ("Coles"). All three transfers occurred after the Dourado Claim was filed but before Crystal or Michael filed a defence to it. Hadfield is owned by Susan and Scott Masterson, Crystal's parents, who live there with Crystal, Michael, their minor children, and Crystal's new intimate partner. Milcroft was owned by Michelle Serpa, Crystal's close friend, and her partner Nelson Serpa; it has since been sold with proceeds held in trust pending the motion. Coles was acquired by Samantha Leask, Crystal's childhood best friend, and her husband Luigi Di Cicco, who live there with their children.

Reasoning and analysis

The court applied the test set out in Grefford v. Fielding, 2004 CanLII 8709 (ONSC), requiring the plaintiffs to establish on a balance of probabilities: (a) a high probability of success in the main action; (b) evidence that the transfers were made with intent to defeat or delay creditors; and (c) that the balance of convenience favours issuing a CPL.

On the first question, the court found the answer uncontroversial — the plaintiffs invested $500,000 with Crystal and Michael and were never repaid, giving rise to a clear breach of contract for which damages of at least $500,000 plus interest would be owed.

On the second question, the court identified an overwhelming number of "badges of fraud" common to all three transfers, citing Indcondo v. Sloan, 2014 ONSC 4018. These included: the transfers occurring after the plaintiffs had invested $500,000; the transfers occurring after Crystal learned the Ponzi had collapsed; the properties not being listed on MLS; all three properties being transferred to non-arm's length parties over the course of 30 days; Susan Masterson acting as the real estate agent on all transfers; Crystal acting as the real estate lawyer on the transfers — a clear conflict of interest; the Dourado Claim having been filed before the transfers, with Crystal only filing her defence after all transfers were complete; and Crystal having emailed Tanya Crepulja after the transfers to say that she and Michael's total joint assets amounted to only $6,737. The court rejected the defendants' claims to have paid fair market value, noting that most supporting records — including agreements of purchase and sale and trust ledgers — were created by Susan or Crystal in their respective capacities as agent or lawyer, and therefore carried very little weight. The court also rejected the Serpas' claim that they had agreed to purchase Milcroft in 2022 rather than 2023.

On the balance of convenience, the court granted a CPL on Hadfield, noting the strength of the plaintiffs' claim, that Crystal and Scott were living there rent free, and Susan's central role in facilitating the transfers. For Milcroft, as the property had already been sold, the court declined to issue a CPL but instead ordered that $500,000 of the proceeds continue to be held in trust pending the outcome of the litigation, with any remaining funds to be dispersed. The court declined to issue a CPL on Coles, finding that the funds available from Hadfield and Milcroft were sufficient to satisfy any potential damages award, and that the balance of convenience weighed in favour of maintaining stability for Samantha and Luigi's child pending the outcome of the litigation.

Ruling and outcome

The plaintiffs, Tanya Crepulja and Steven Fontes, were largely successful on the motion. CPLs were granted on Hadfield, and $500,000 was ordered to remain in trust from the Milcroft sale proceeds. The CPL on Coles was refused. On costs, the court ordered a total of $38,000 (all inclusive), payable to the plaintiffs. Michael Foley was ordered to pay nominal costs of $3,000. Crystal Masterson, Michelle Serpa, Nelson Serpa, Scott Masterson, and Susan Masterson were ordered jointly and severally liable for the remaining $35,000. Samantha Leask and Luigi Di Cicco were not ordered to pay costs, having successfully defended the motion.