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On the day she was arrested for allegedly promoting a Ponzi scheme, lawyer Crystal Masterson’s home life was a mess.
She was living in her marital house in Burlington, but now it was owned by her parents who were sleeping in the master bedroom.
Masterson was separated from her chartered accountant husband, Michael Foley, but he too was living in the house because he could not afford to move out.
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Meanwhile, Masterson’s best friend had become her romantic partner, and she was staying in the home.
Rounding out the unusual living arrangements were Masterson and Foley’s three young daughters.
The house itself — worth $2 million, with four bedrooms, backing onto a golf course — is a contentious issue in lawsuits, bankruptcy proceedings and a disciplinary case against Masterson by the Law Society of Ontario, the province’s regulatory body for lawyers. Masterson — a real estate lawyer — sold the house when she was on the verge of losing everything in the sketchy investment scheme in which she was deeply involved.
She said she made the deal with her parents for fair market value, but investors who were left broke because they trusted Masterson with their money, alleged in lawsuits they filed against her that the sale was just a way to protect her assets.
Masterson claims she is misunderstood. All she wanted was to help people make money. Then, when things went wrong, she tried to help them recoup their losses.
“I am a good lawyer. I am an honest lawyer,” she told law society investigators who interviewed her for hours before her licence was suspended.
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“My life has been so vanilla and boring, which is what I thought it always would be. Like, I don’t do anything that I wouldn’t want my kids to know about.”
Masterson said she lost $5 million of her own money and is a victim of an alleged swindler named Douglas Grozelle and his right-hand man, Halton regional police fraud detective Jon Williams.
In March, all three were arrested for allegedly running a $24.6 million “complex, multi-jurisdictional investment fraud scheme,” according to an Ontario Provincial Police (OPP) news release.
Grozelle, 49 at the time, of Burlington, faces two counts of fraud over $5,000. He is accused of masterminding a two-year scam that sucked in at least 236 participants. Bankruptcy receiver Grant Thornton says the pyramid scheme was “insolvent from its inception.” It was “a classic Ponzi scheme,” using money from new investors to pay illegally high returns on short-term loans to a select group of earlier investors, many of whom were Halton police officers.
At least 116 investors lost money, homes and, in some cases, everything.
Williams, 41 at the time of his arrest, is from Beamsville. He worked in the Halton police fraud unit investigating Ponzi schemes. He faces one count of fraud over $5,000 and is suspended with pay from the police service.
At the peak of the investment plan, he took a leave from policing to work with Grozelle. Now he tops the list of “net losers” in the scheme, personally losing $327,000, as determined by Grant Thornton in documents filed with the court. When you add what he lost on behalf of friends and family, the amount rockets to $6.1 million.
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Masterson was 40 when she was charged with fraud over $5,000.
She is the second biggest net loser, according to bankruptcy documents.
Her alleged role in the investment scheme is laid out in 1,500 pages of law society documents, which The Spectator successfully fought to access. They contain emails, texts, bank records and transcripts of Masterson’s two interviews with investigators in April of this year. None of the allegations against Masterson have been proved in court.
The Spectator reached out to Masterson. Her lawyer, Daniel Brodsky, sent a response: “My client’s preliminary inquiry has been scheduled to commence on May 4, 2026. She is unable to provide any comment on her case at this time, as the matter is currently before the courts.”
Foley declined an interview request. “Unfortunately, I am not able to provide a comment at this time,” he said.
Not your average bio
Crystal Diane Masterson graduated from the University of Waterloo with a B.A. in rhetoric and professional writing. She received her law degree from the University of Oklahoma College in 2011 and was called to the bar in Canada in 2013 — the same year she married Foley and opened what she marketed as a “boutique” legal firm in Burlington. She is the sole proprietor, employing three other lawyers and several support staff, including an office manager and bookkeeper.
“It was never supposed to be a large firm,” she told a law society investigator. “It was just supposed to be me supplementing my then-husband’s income. He was intended to be the breadwinner, and it wasn’t until I’d had all the children, in 2021, I hired my first full-time staff member. And we’re now at 15 people.”
Her website profile — which was taken down after her arrest — was far from the normal lawyer bio.
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“Although Crys’s legal name is Crystal, she goes by Crys professionally, as she understands it’s difficult for clients to trust a lawyer with a stripper name (thanks, mom and dad). Crys enjoys spending time with her spouse and three young children, attending any concert that comes to town, watching all variations of the Bachelor franchise, cheering for the Raptors (even when they’re losing), making the world’s best margaritas, and refusing to wear pants without an elastic waist (because self-care).”
In 2020 or 2021, Masterson and Foley began lending money for private mortgages, the lawyer explained to an investigator. Foley orchestrated the loans, which flowed through the trust account at Masterson’s law firm. The returns were paid back directly to Foley.
Masterson says Williams was her real estate client and a mortgage broker. (However, the law society says Williams is not listed as a licensed mortgage broker.)
Masterson and Williams became friends.
In March or April 2022, over a sushi lunch, Williams told her about an investment opportunity that was making him rich. It was run by Grozelle, whose brother was also a Halton cop.
Williams told her Grozelle was a wealthy businessperson who vetted the borrowers and could cover any loans that defaulted, according to Masterson.
The scheme worked like this: investors gave Grozelle large amounts of cash for short periods, ranging from a few weeks to a few months. He promised to lend it to third parties — mostly businesses needing bridge financing — then pay it back fast with a high rate of return.
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“It was all pretty much police officers investing,” Masterson told the law society. They worked for services in Halton, Hamilton and Niagara. If it were not for Williams’ role as a fraud detective, she never would have considered investing, she said.
Masterson admitted to a law society investigator that she did no due diligence regarding the scheme or Grozelle.
Foley and Masterson invested $175,000 with Grozelle, through Williams.
Masterson says the loan was paid out in full in 21 days with $17,500 interest, which was deposited into her legal firm’s trust account.
Lawyers’ trust accounts are supposed to hold money for clients receiving legal services.
Williams’ and Masterson’s families became close.
“Our families would get together … Jon has a daughter that’s a year older than my eldest daughter. Jon’s wife is also a police officer, and we all got along,” Masterson told the law society.
Around then, Williams, Masterson, Foley and Grozelle all went to the same charity event. It was the only time Masterson and Foley met him in person.
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Yet, she knew enough about Grozelle to tell the Law Society he was “generous with other people’s money. He went on lavish vacations, paid the tab for the entire bar and ate at the best restaurants.”
‘Fun money’
Masterson says after she raked in her first return, she approached others to invest with Grozelle.
“I brought in more and more and more friends and family,” she told an investigator. “My sister, my best friend, my aunt. Just, you know, people I thought needed an opportunity to get ahead, because it was working until it wasn’t.”
“I’ve got every cent of mine in there right now and I renew as often as I can because I’m greedy lol,” Masterson messaged one investor she recruited. “I get the interest payments in the meantime for fun money.”
She told the same person that she received a “finder’s fee” for bringing in new investors. She never disclosed that to law society investigators, it was noted. They discovered it while combing through Masterson’s correspondence.
Foley helped manage the flow of cash, issuing promissory notes for the transactions. Masterson told investigators her estranged husband would not provide her with all the promissory notes.
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The money went through Masterson’s trust account. She told an investigator her trust account was the quickest way to move large amounts of money.
She claimed she relied on advice from her former bookkeeper who said she was allowed to do so. Masterson later learned otherwise from another lawyer at her firm.
“I didn’t go to law school in Canada, and I opened my practice right away without working for another firm,” she said, explaining her ignorance.
Yet even once she knew better, Masterson never reported her misuse of her trust account to the law society.
Masterson’s records of her trust account did not meet law society requirements, documents said. She failed to take copies of investors’ identification, and she admitted to not even knowing where to find the law society’s administrative requirements.
“Most of the money that went through my trust account was for real estate transactions,” Masterson said later in an interview with law society investigators. “The money that went through my trust account was people that I knew personally — friends and family — depositing money for me to send it … to Doug and Jon.”
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“But they had no legal purpose? It was investment purposes only?” the investigator asked.
“Correct.”
Law society documents say between April 11 and Dec. 9, 2022, $25 million was deposited into Masterson’s trust account in relation to the investment scheme. About 15 investors each handed over anywhere from $1.75 million to $3.5 million to Masterson.
One investor was her own office manager. The woman’s husband also invested, for a combined total of $4 million.
By September 2022, Masterson was providing loans directly to Grozelle, cutting Williams out of the middle. She said Williams told her he had met his financial goals “and was moving on from the investment scheme.”
At the same time, the lawyer’s honeymoon with Grozelle was reaching its end. She was doubting the legitimacy of the investments. Grozelle was not paying up. Text messages with Williams that same month made it clear:
“This last week made me anxious,” she wrote.
“Me too. 2.7 mill behind is not good,” said Williams. “Sorry for this week. We’re all stressed over it.”
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“I’m just trying to make sure people know it’s not a Ponzi scheme, lol.”
“Yeah I get it!” said Williams.
By November, the flow of money from Grozelle dried up.
“Maybe it really was always a Ponzi scheme,” Masterson texted to Williams on Nov. 15.
A few weeks later, Williams emailed Masterson and others.
“I spent most of the day in the hospital with Doug,” it said. “He’s certainly very ill but on the mend. I am told he will likely be going home in the next few days.”
It is unclear what the medical issues were, although it has been suggested by several people who know him that he was suffering from severe anxiety.
At this point, Masterson’s role in the scheme becomes even more questionable. The law society claims her financial records show that in November 2022, “the lawyer used new funds obtained from investors to pay off earlier investors in the Ponzi scheme.”
In her interviews with the law society, she denied the individuals she repaid were threatening lawsuits. She still owes nine investors about $9 million.
‘Pitch of a lifetime’
Meanwhile, Grozelle was working to entice a wealthy venture capitalist to buy his failed Grozelle Enterprises.
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He turned to Masterson for help.
Before meeting the potential buyer, Grozelle asked the lawyer to create a brochure to show off the investment plan.
He texted her to make the package look “professional enough to sell a sophisticated $40 million investor that you’ve never met before. Pitch of a lifetime.”
That brochure would become the reason for her arrest, Masterson would later say.
Grozelle and Williams provided her with information for the job, including an old magazine profile on Grozelle. Then with the help of her mother, according to Masterson, she created the pamphlet.
Masterson edited an early draft to change the title from “Investing with Grozelle Enterprises” to “Lending with Grozelle Enterprises.” She said she was told to do so because Grozelle did not have an investment licence.
The brochure also said: “In over three years of operation, the pooled fund has experienced zero defaults on its loans.” In an interview with the law society, Masterson conceded she knew this was untrue.
Under a heading of “Financial Disclosure” in the brochure, there is a note saying, “verified with sworn attestation by lawyer in good standing with the Law Society of Ontario.”
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Masterson agreed she is the lawyer. Her evaluation of the financial health of the scheme consisted of looking at a screenshot Grozelle sent her of a bank account with no name visible. She admitted there was no sworn attestation.
Texts on Dec. 21, 2022 indicate the brochure was sent to the prospective buyer.
Meanwhile Williams had gone to the police.
“Jon said, ‘I don’t think it’s a fraud, but given my role, if I don’t report this and it turns out to be one I’m in big trouble,'” Masterson told the law society.
Williams tried to file a fraud report with Hamilton police because Grozelle was living in the city and his bank was there. Hamilton police did not investigate.
Nor did Halton regional police. The service said it could not — too many of its own officers were wrapped up with Grozelle and Williams.
When Williams failed to get traction, he asked Masterson to make a complaint.
“They’re not taking me seriously,” she says he told her. “If they hear from a lawyer, they’re going to take it seriously.”
Masterson told the law society she went to the OPP. Detectives “asked me a bunch of questions.”
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The OPP’s anti-rackets branch launched Project Pennywhistle. Ironically, the two people who reported Grozelle to the police ended up being charged alongside him.
Masterson said she didn’t hear from police again until her arrest.
Meanwhile, Masterson scrambled to recoup millions in lost investments. Grozelle’s lawyer assured her that by the end of 2022, she would receive $5.9 million.
It never came.
“That was when I started to worry … I am naturally a very anxious person,” she told the law society. “I am very heavily medicated for it, but I just tried to stay calm.”
On Jan. 27, 2023, Williams told Masterson that Grozelle’s phone was shut off.
The cop and the lawyer agreed in texts that it was likely because he was supposed to pay an investor a large amount of money that day.
They talked about forcing Grozelle into bankruptcy.
Going on the offensive
In the first days of February 2023, Masterson sent Grozelle a series of messages.
“You’ve ruined my life. Someone sued me today for 2.5 million and now you’re ruining my professional relationships too. All I do is try to help you and it f***s me more and more.”
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While Masterson was defending herself against lawsuits, she went on the offensive.
She, Foley and Williams launched a $40 million lawsuit against Grozelle. Much of that money — $19.8 million — was owed to the three of them. Other lenders were also named in the claim.
Masterson claimed that in December 2022, Grozelle conceded he had not received repayments from end borrowers for three months.
Grozelle failed to defend the claim and the court ordered him to pay out.
He never did.
In June 2023, Masterson sold her house to her parents, and her sister bought her parents’ house, thereby keeping all the same homes in the family. She told investigators she did not do this to evade creditors and the $2 million she got from the house sale was given to people she brought into the investment scheme. The law society said the lawyer has not turned over any records to support that claim.
Another Burlington house owned by Masterson and Foley was transferred to a couple who lost money in the scheme.
In July 2023, Masterson, Foley and Williams used their civil court decision against Grozelle to bring an urgent application before a Superior Court judge. It sought the appointment of Grant Thornton Limited as receiver to handle the bankruptcy of Grozelle and Grozelle Enterprises. A receivership order was granted.
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Foley and Masterson took out a $1-million line of credit on their home, the lawyer said, to repay lost funds to friends and family at risk of losing their homes.
“Not out of obligation, but out of … guilt,” she told the law society. “I’m sure you’ll learn through my stupidity and my actions that I am a bleeding heart.”
Masterson also said she only paid back people who were closest to her.
Lawsuits against Masterson were piling up.
One alleges that on Dec. 5, 2022, Masterson forwarded an investor an email suggesting Grozelle had defaulted due to a medical issue, but everything would be fixed shortly.
At the time, Masterson was “aware that Grozelle had been reported to the police and appeared to be in debt of over $40 million,” the statement of claim read.
As Grant Thornton began the painstaking process of unravelling Grozelle’s financial records, it produced two important lists: the net winners in the alleged Ponzi scheme and the net losers.
Topping the net winners were John McMullan and Krista McMullan, a married couple who are both sworn Halton police officers. Together, they made $3.1 million in profit.
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Through their lawyer, the McMullans have previously told The Spectator they contest the receiver’s accounting.
Grant Thornton is trying to “claw back” money from the net winners to pay back the net losers.
The top net winners — mostly cops — are fighting that.
It was not until Grozelle Enterprises went into receivership, Masterson told investigators, that she understood for the first time “there weren’t actually loans. That he had just basically shuffled money between people.”
“Up until the receivership, all of us thought that he was running a legitimate, successful loan business and that he inadvertently turned it into a Ponzi scheme at the end because he was in over his head.”
‘Living hell’
In September 2023, Masterson sent an email to her investors with the subject line “Grozelle Receivership.”
“After 10 months of this, I’ve finally reached my breaking point. I am carrying the weight of my own losses, the loss of my children’s future, the loss of my parents’ retirement, and all of your losses. Candidly (and shamefully), I have days where I feel like death is the only option and it takes all of my mental energy to remind myself my kids need me and we’ll find a way, with or without money.”
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Four months later, Masterson and Foley separated, and the lawyer began a new romantic relationship.
She “was actually my best friend before we got together and didn’t have feelings and didn’t see that coming,” Masterson told the law society. “But sometimes life has other plans for you.”
Masterson said her romantic partner — an American attending school in Canada — began working at her law firm in January 2025, “helping with wills and little tasks here and there.”
They plan to marry.
As for Foley, Masterson said his employer is aware of a lawsuit filed against him related to the alleged Ponzi scheme. A divisional controller who creates financial statements for a building supply company, Foley is no longer allowed to sign cheques at work, Masterson told the law society.
In March 2025, the OPP phoned Masterson and told her she would be charged. It was arranged for her to come to a station in Burlington on March 27. She was fingerprinted, put in a cell briefly, and interviewed for three hours.
An officer laid out the evidence.
“It was essentially a Ponzi scheme,” Masterson told the law society. “Showed me a chart showing who the players were, and essentially said, like, ‘We know that, you know, you didn’t know at the beginning that this was a Ponzi scheme. We are not confident you didn’t know at the end that it was.’ And I most certainly didn’t. So, I expect that the charges will be dropped. But in the meantime — living hell.”
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The OPP placed “Doug Grozelle at the middle of this giant chart with all the people that had loaned money, and directly beside him, on the same plain, was Jon Williams. And then if you went down, down and to the left on their chart, there was me. So they’re like … you are not a big player in this … You are not our target … We don’t think that you planned this, that you orchestrated it. We just think that you assisted them while knowing it was a fraud.”
Masterson said she was told by the OPP that it was her brochure that assisted the Ponzi scheme.
“You made this for them,” the OPP told her. “And they used that to defraud people.”
Masterson was released that night.
The day after her arrest, Masterson reported her charges to the Law Society of Ontario.
“I have been charged with fraud over $5,000 in a large-scale Ponzi scheme,” she wrote to the law society. “The reason I am being charged is that the perpetrators of the fraud used a document I created to defraud people.”
A law society investigation was launched in April, focusing on allegations that Masterson knowingly participated in criminal conduct and misused her trust account to funnel money to Grozelle.
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She told investigators she currently had $100,000 and had not filed for bankruptcy.
“So Crystal, I have to ask you this,” an investigator said. “The money that was going into your trust account from these, from the loans … Did you launder that money? Was that the purpose?”
“What does that mean?” asked Masterson.
“Well, did you clean the money for someone else?”
“No. Like, I don’t, I don’t know what that means.”
“All the money that went through your trust account was for non-legal use?”
“Not all the money, obviously.”
The law society asked Masterson to agree to a licence suspension while the investigation, and possibly disciplinary hearing, take place.
It said she posed “a significant risk of harm to members of the public, or to the public interest in the administration of justice, if the order is not made.”
The law society can conduct a hearing and order a lawyer’s license to be suspended. In this case, it hoped Masterson would comply without the hearing.
She initially resisted.
“I’ve got three small children that I have to raise and I already lost our entire life savings thanks to this. And my practice is the only chance that I have to recover financially. I don’t know how to do anything else.”
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She also said by consenting, “I feel like it suggests that I am admitting that I’m guilty to something that I have never done. I have never defrauded anyone.”
In the end, Masterson did not contest her suspension.
Her criminal, civil and disciplinary cases are all ongoing.
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