Mike Borac, a Toronto contractor accused of serial reno fraud

Bad Builder

He said his name was Mike Borac and that he could build homes faster and cheaper than anyone else. By the time his clients realized his promises were too good to be true, their money was gone

One warm July evening in 2021, Amin took a post-dinner walk, as he often did. He’d been living in Lorne Park, a quiet, leafy neighbourhood in southeast Mississauga, for more than a decade, sharing a modest home with his immediate family and his parents, who often stayed with them. As he wandered past some of Lorne Park’s bigger residences, Amin kept an eye out for details that he could use as inspiration for his next house.

Amin (who agreed to speak with me on the condition that I not use his real name) dreamed of buying a bigger, multi­generational home in which his family could spread out. When he had begun searching in earnest, in 2020, his real estate agent convinced him to consider vacant lots as well as existing homes. Amin was nervous—he didn’t know anything about building houses—but he liked the idea of a home custom-made to his specifications. By the fall, the perfect spot had popped up: a plot in Port Credit, just five minutes east of his current residence. At 7,500 square feet, it was big enough for both a 4,200-square-foot home and a sizable backyard. Delighted, Amin took out a loan secured by his existing house and bought the land.

Now he was seeking the perfect contractor for his perfect home. He had been collecting quotes since early summer, but he couldn’t find the right fit. Most of the contractors said that a rough-in, the phase of construction that includes everything but the interior finishing, would cost about $575,000 and take seven to 10 months. Amin was hoping for a shorter timeline—the faster he could build the new house, the faster he could sell his place in Lorne Park and use the profit to pay down the loan.

Looking down the street, Amin spotted a two-storey home under construction. Its large front entrance, big windows and gabled roofs gave off a contemporary colonial vibe that appealed to him. Several signs and two white vans parked on the property advertised a company called SUM ICF Sip Forming Drain and Concrete. Amin pulled out his phone and called, then texted, the number, explaining that he wanted to discuss a possible project. Within minutes, he got a ring back from someone with a deep voice and thick Eastern European accent: Mike Borac, the company’s owner. The men set up a meeting for later that week at the house-in-progress.

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In his late 50s, clean shaven, roughly six feet tall and 230 pounds, Borac greeted Amin on the Lorne Park site a few days later. Decked out in work pants and construction boots, he took Amin on a tour of the house, which belonged to a man named Joseph Abichedid. Borac assured Amin that he could build his house faster and cheaper than other contractors: the rough-in would cost $515,000 and take just three months. The entire project, he said, would be complete by the spring of 2022, and he provided Amin with a written estimate to that effect. Instead of using lumber, Borac planned to save time and money by using insulated concrete forms—known as ICF—which are pre-built polymer walls that fit together like puzzle pieces.

Borac seemed knowledgeable and experienced—he told Amin that he had immigrated to Canada from Serbia as a young man and had been in the contracting business for three decades. The timeline sounded ideal to Amin, but he remained cautious. This project would eat up his life’s savings. Were the lower estimate and truncated timeline too good to be true? He decided to reach out to Abichedid, the owner of the house he admired so much. Borac was a wonderful guy, Abichedid said, and a highly technical worker who knew everything about building. Amin spoke with another client of Borac’s, who was building next to Abichedid, and he also gave Borac a positive review. Then Amin consulted his lawyer. After a month of due diligence and deliberation, he was satisfied and signed with Borac.

Upon being hired, Borac asked for a $110,000 deposit. Covid was still causing supply chain problems, he said, and he needed to start ordering materials immediately. Amin handed over the money, and Borac gave him a receipt. In October of 2021, Amin received a building permit from the City of Mississauga, and the project moved quickly after that. Working alone, Borac finished the excavation in two days. “He even worked on a Sunday,” says Amin, “which I found really impressive.”

Once the digging was complete, Borac asked Amin for another $90,000 to pay for windows and doors, which he was importing from Serbia. Amin was pleased with the progress of the build and Borac’s overall work ethic, so he paid up. But Amin started having doubts about his contractor a few weeks later. He and Borac went to a supplier to look at plumbing materials and were quoted roughly $50,000. Borac later told Amin that, as a contractor, he could get a 50 per cent discount from the same supplier, and he’d be happy to pass on the savings to Amin. Suddenly curious, Amin asked Borac why he wouldn’t just charge him the full price and pocket the extra cash. Borac’s response: “I’m fair and very honest.”

Mike Borac, a Toronto contractor accused of serial reno fraud
After handing over $200,000, Amin wrote another cheque despite a growing sense of unease

Amin wrote out a cheque to MB General Construction Ltd., a subsidiary of Borac’s SUM ICF. Borac gave it back, saying that the cheque should be made out to him personally. When Amin protested, Borac said it was the only way to get the discount. Amin reluctantly agreed, tamping down his anxiety as best he could. Though he was hesitant to give Borac more cash so soon—he’d already spent $200,000—he felt that he had no choice if he wanted him to continue the project.

Within a couple of months, Amin’s worries intensified. In the spring of 2022—a month past his original deadline for finishing the project—Borac failed two city inspections involving the foundation’s footings and backfilling (when soil extracted during the excavation process is reused to support the structure). When Amin asked for an explanation, Borac claimed that the city inspector was being overzealous. In reality, Borac had gone rogue, ignoring the initial city-approved drawings and taking shortcuts wherever possible. It took months to get new drawings approved, but once they were, Amin allowed himself to feel some relief that things finally seemed to be getting sorted.

Then, in November of 2022, the project stalled again. Borac stopped showing up to the site. When Amin called him, he’d make excuses: he was sick, it was raining, he was waiting on materials. Then, in December, Borac left for Serbia, telling Amin that he would be gone for two weeks and would resume work upon his return. Two weeks came and went, then three and four, but still no sign of Borac. Amin called and texted him frantically, asking for updates, but Borac never answered. The crew that Borac had subcontracted to do the ICF work kept showing up, but there weren’t enough materials for them to do the job—plus, Borac had yet to pay them and wasn’t returning their calls either.

“We’ve been in this business 41 years, and he’s the worst, most dishonest person we’ve ever come across,” said one of Borac’s suppliers

When Borac finally resurfaced, in February of 2023, Amin was furious. He pressured Borac to speed up construction, but the pace remained glacial. By the spring, a year after the original deadline, the crew had completed only the lower half of the exterior walls—10 per cent of the total build. Amin was fed up. He fired Borac, began buying materials himself and hired the subcontractor to finish the basement level. And, crucially, he started compiling contact information for Borac’s other clients by visiting sites Borac had mentioned and asking to speak with the owners.

By mid-April, Amin had gathered contact information for 11 of Borac’s clients. He entered them all into a WhatsApp group, which he labelled Mike Action Group, and fired off a message. Amin explained that he was reaching out about Borac’s failure to honour his contracts and that he himself was out $235,000 with little more than a hole in the ground to show for it. Amin half-expected to be told to get lost, that he was the lone complainer and that the WhatsApp gambit—a long shot at justice anyhow—would be short-lived. He was wrong. The messages that came in were varied in their specifics but consistent in their theme: Borac had ripped them all off. He’d start a project with energy and commitment. Then, once the client had handed over enough money, he’d vanish.
Mike Borac rents an apartment near Hurontario Street and the Queensway. He dresses modestly, eats his meals at home and roots for the Serbian national soccer team. He doesn’t date. He has an ex-wife and a daughter in her late teens, whom he sees on holidays. Borac used to be a heavy drinker until about a decade ago, when he was arrested for impaired driving. He hasn’t touched a drop since, opting for green tea instead.

Born Milentije Djordjevic, he changed his first name to the anglicized Mike when he moved to Toronto, in the 1980s. Around the same time, his last name became Borac, a Serbian word that roughly translates to “fighter.” After immigrating, Borac, who’d always liked working with his hands, immediately got a job doing demolition downtown. He eventually founded MB General Construction, which offered services including excavation, building and interior finishes.

By 2007, there were signs of his transgressions to come. According to an employee at Imar Steel Ltd. in Etobicoke, Borac made out cheques to the company that year totalling $25,000, and they all bounced. After attempting to contact Borac by phone, via email and by going to his house throughout 2007 and 2008, the employee heard that Borac had filed for bankruptcy, and she gave up trying to get the money back. “We’ve been in this business for 41 years,” she told me, “and he’s the worst, most dishonest person we’ve ever come across.”

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In 2022, Borac purchased $34,000 worth of steel from a Vaughan-based outfit called Henry Rotberg Steel Corporation, but that cheque bounced too. When contacted, Borac suggested that the company try depositing it again—same result. The cheque bounced three times; Borac stopped answering emails. The company took him to civil court, but Borac still hasn’t paid up. “I don’t know how a person like that continues to get work,” says Henry Rotberg manager Brett Klein, “but there are a lot of those guys out there.”

According to Klein, Borac’s case illustrates a larger problem in the trades. “Construction is a very unregulated business. Nothing is stopping anybody from saying, ‘I’m a builder’ or ‘I’m a drywaller,’ ” he says. “We deal with people who have no idea what they’re doing, and there are lots of handshake deals that don’t hold up.”

“It’s been a nightmare. This ordeal destroyed my financial planning for the future—retirement, everything,” says Amin. “If I think about it, I can’t sleep at night.”

This past March, the Better Business Bureau published a report stating that the riskiest types of frauds in Canada in 2022 were home improvement scams, up three spots from 2021 (and surpassing cryptocurrency and online frauds in terms of lost dollars). They have the highest susceptibility ranking, meaning that more people who were exposed to home improvement scams fell for them. That same month, Toronto police launched an investigation into a home renovation scam involving supposed contractors who approached homeowners to warn them about a leaking roof, got payment in cash upfront and then disappeared. Unfinished work was also at the heart of a high-profile case involving a Toronto contractor named Adam Gardin, who was sentenced in 2019 to three and a half years in prison after pocketing $1.24 million for ditched jobs.

In Ontario, general contractors building a home are supposed to be licensed by the Home Construction Regulatory Authority, known as the HCRA. The licensing process includes passing courses and exams or otherwise proving competency in seven different categories, including business management, building codes and legal issues in housing. The process requires roughly 14 days, often over several months, and costs between $3,700 and $6,800. Applicants must also pass credit, judicial and criminal record checks.

The HCRA can discipline builders who violate its code of ethics by operating without a licence or by failing to enroll a new home in the warranty program. Consequences can range from mandatory education courses to fines of up to $50,000 to the loss of a licence. But too many contractors circumvent the system entirely. Neither Mike Borac nor his companies show up in a search of the HCRA database. How can the HCRA punish someone it didn’t know existed?

Just this year, Borac failed to pay $79,439 to Penco Drywall Ltd., a housing contracting company in Mississauga that he had hired for a project. Penco’s president, Brad Pierce, says his company usually insists on being paid by homeowners directly, but Borac sidestepped the process and had the homeowner pay him instead. After weeks of trying to get the money out of Borac, Pierce realized that it wasn’t going to happen. “We were screwed out of $80,000,” he says. The company attempted to recoup the money in civil court but gave up after a few months.

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Between 2008 and 2023, Borac—operating under at least two business names, MB General Construction and Mike Borac General Construction Ltd.—was pursued eight times in civil court by small- to medium-size businesses he’d shafted. He was also pursued by the Ontario Ministry of Labour for $12,000, in 2018. Although the ministry won’t comment on specific cases, the amount Borac owed was likely for unpaid wages to ­sub­contractors; if Borac fails to pay up, the ministry has the option of recovering the amount by seizing property or garnishing bank accounts. The total amount Borac owes in all these cases combined is a whopping $800,000.
After swapping horror stories on Whats­App, eight of the 11 members of the Mike Action Group decided to get together in person. They met at one of the victims’ offices in Mississauga. One of the members, a man named Dhyan Virk, was planning to build a house in Lorne Park, the same neighbourhood that Amin was living in. Borac, whom he’d met through a friend, gave him a good quote for the project, about $50,000 less than other contractors, for everything minus plumbing, electrical and insulation. Borac asked for $160,000 in deposits, saying that materials costs were up and orders took a long time to process. He did the demolition and excavation and then stopped returning Virk’s calls. Their entire working relationship lasted a mere six months.

Another Mike Action Group member and his wife had been living for 20 years in a modest three-bedroom in Whitby, where they raised their daughter. The couple saved up for nearly a decade, squirrelling away a portion of each paycheque, and in 2018, they bought a teardown in Mississauga for $1.27 million. The homeowner vetted three different builders, all of whom quoted between $1.3 and $1.4 million for the project. Then he heard about Mike Borac. He toured some of Borac’s homes, which seemed impressive, and Borac offered to do the job for $1.25  million. That clinched it.

Just as he did with Amin and Virk, Borac asked the homeowner for a large deposit—in this case, $180,000. Then $140,000, and another $100,000 after that. The work stalled often: over the course of two years, Borac failed a city inspection, ghosted frequently and travelled to Serbia twice, leaving behind an unfinished home. By the end of his dealings with Borac, the owner had sunk $560,000 into the project. Like so many of Borac’s victims, the more money he invested, the more inclined he was to continue paying out.

Mike Borac, a Toronto contractor accused of serial reno fraud
Borac failed to deliver materials to the site or pay his subcontractors, so they’d show up and do nothing

Borac likely counted on that inclination. There’s even a term for it: the sunk-cost fallacy, which is the human tendency to pursue an endeavour in which we’ve invested time, effort or money, even when it’s obvious that the costs outweigh the benefits. It’s the reason we sit through terrible movies and finish boring books. Like Amin, this victim could have taken Borac off the project and found another contractor, but he was into him for hundreds of thousands of dollars. Instead, he crossed his fingers.

In the end, his hope was misplaced. He has since had to spend an additional $450,000 building the house, hiring tradespeople from nearby sites to continue the work. He expects to spend even more in order to finish the project by the end of the year. “It’s very depressing,” says the homeowner. “But the total impact is hard to quantify. I’ll have to work longer before I can retire. It’s stressful not knowing where I’m going to get the money.”

After their April meeting, desperate to recover their money, the members of the WhatsApp group decided to consult a lawyer, who suggested they take their case to the police. On May 4, they went to 11 Division in Mississauga, bringing contracts, cheques and printouts of emails. They alleged that, between 2017 and 2022, Borac had ripped off more than 10 homeowners in Mississauga, Oakville, King City and Caledon, for a combined total of roughly $1.7 million.

Last August, as a result of the group’s report, Peel Regional Police arrested Borac. (Borac failed to answer requests for an interview, as did his lawyer.) Identified as Milentije Djordjevic by the police and on court documents, he faces nine charges, including defrauding the public, fraud over $5,000 and possession of the proceeds of a crime. A trial date has not yet been set, so none of the allegations have been proven in court.
Shortly after his arrest, out on bail, Borac continued getting work across the GTA thanks to his pseudonym, which hadn’t appeared in the various news stories about his arrest. Nor have his activities raised a red flag in the HCRA database—since he isn’t registered.

When Joseph Abichedid recommended Borac to other prospective clients, he says he did so in good faith: “Everything I said at that point was true. He was doing the work. I believe he had good intentions but fell behind on payments and took money from one project to cover another,” he says. “Eventually, he couldn’t keep up, and like a domino effect, everything fell down.”

But his compassion began to wane in late 2021, after Borac stopped showing up at his house. Abichedid decided that he was done letting others take charge: he would manage the project himself, hiring the tradespeople and ordering the supplies. “I’ve learned from my mistake,” he says. Work will now stretch into 2024, and Borac still owes him for roughly $300,000 of unfinished tasks. Abichedid has low expectations at this point, but he still hopes that Borac might eventually be able to complete a small job here and there. “What good would it do for me to report him to the police? I may as well give him a chance to compensate me,” says Abichedid. “He promised to put a pool in the backyard and complete some other jobs to make up for everything. If he goes to jail, I get nothing.”

Amin doesn’t expect anything from Borac. Instead, he hopes the builder will get jail time. “Mike was a sweet talker, and the house, the signs and the vans were good marketing stunts,” says Amin. “It’s been a nightmare. This ordeal destroyed my financial planning for the future—retirement, everything. If I think about it, I can’t sleep at night.”

He now expects his build to take until the end of this year, at least—a year and a half longer than Borac promised—and to ring in at $670,000, roughly $150,000 more than expected. Add to that the $235,000 in deposits that Borac took, and the total cost will come to $905,000, minimum, for a job that was supposed to cost him $515,000. All the while, he’s stuck paying an even higher mortgage because of rate hikes.

The two men may have different views of what should become of Mike Borac, but they do have one thing in common: they can’t wait for the day they never have to think about him again.

This story appears in the October 2023 issue of Toronto Life magazineTo subscribe for just $39.99 a year, click here. To purchase single issues, click here.