Investors, Realtors still waiting to learn whether criminal charges will follow collapse of Epic Alliance
CBC
Gary Busch says the Epic Alliance business model smelled like fraud from the start.
Today, people who lost their life savings when the Saskatoon real estate investment company collapsed in 2022 are still wondering whether Busch was right.
Busch is the broker-owner of Century 21 Fusion in Saskatoon. The veteran Realtor became suspicious of Epic's practices in June 2020.
"There's a company and they're buying 20 to 30 houses a month, and these prices are being inflated," he said in an interview. "And I don't know what's going on for sure, but I think there could be some mortgage fraud, or there's some manipulation of facts here."
The Epic Alliance group of companies abruptly shut down its operations in January 2022. Its investors and property partners learned of the collapse in a 16-minute Zoom call from the company's founders, Rochelle Laflamme and Alisa Thompson.
"Everything is gone. Everything is bankrupt, guys. It's all gone," Laflamme said in the Jan. 19, 2022 video.
CBC reached out to Laflamme and Thompson at the time through their lawyer to speak to the allegations. They did not respond.
However, in the Zoom call to investors, they blamed the collapse on the government regulator.
"Unfortunately, we don't have any good news, we don't have any good updates," Laflamme said in the video.
"The FCAA (Financial and Consumer Affairs Authority) f--ked us, so that's it."
A court-appointed investigator from Ernst & Young concluded in a 2022 report that investors might never know what happened to the money raised by Laflamme and Thompson between 2013 and 2022.
"Based on the unaudited books and records of EA Group, total funds raised from investors amounted to approximately $211.9 million. Due to incomplete books and records prior to 2019, the Inspector has been unable to reach conclusions regarding the use of Investor funds for that period of time," the report said.
The report notes, among other things, that the company's "network infrastructure" vanished from its office at 410 Avenue N South after the collapse.
"The inspector identified an empty server rack where several servers containing the network data for EA Group should have been stored. A drill was located on top of the server rack which appeared to have been used to remove the servers," the report says.
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