Real estate investors from across Canada who invested between $50,000 and $500,000 have found out their money is gone..They invested in the Epic Alliance (EA) group of companies based in Saskatoon that owned and managed properties in Saskatoon and North Battleford..The investment opportunity presented by EA co-founders Rochelle Laflamme and Alisa Thompson was simple. Their promotional material on Twitter said to invest in affordable housing and receive a 15% to 20% return on your investment with an annual return of around 10%. .That sounded great to investor Carolina Abramovich from Vancouver..“The story behind the company was great. Try to help investors with their investments while providing, you know, affordable housing in Saskatoon. I liked the fact that they were women and that they were promoting trades for women,” she told CBC..The Financial Consumer Affairs Authority of Saskatchewan (FCAA) issued a temporary cease trade order on Oct. 21, 2021, against EA as they did not have a licence to sell investments or offer financial advice. .The FCAA lifted it on Nov. 16, 2021, and has an ongoing investigation into EA..After the FCAA temporary trade order was lifted, EA went back to their investors in an email to raise $10 million. .“The first $5 million lets us get our current obligations caught up, payout the expired Promissory Notes (sic), and get things restructured to put deals back in the pipeline and work on having the new opportunities set up,” said the EA email..On Jan. 19, 2022, after being unable to raise the $10 million, Abramovich found out on a Zoom meeting from Laflamme that “everything is gone. Everything is bankrupt, guys. It’s all gone.”.Adam Elliott started with EA in August 2020. Before joining EA, he was a property manager in Saskatoon since 2011. On his second day, red flags started popping up. .“Generally speaking, residential property management works off fairly high occupancy rates. You need to have 70% to 80% occupancy to make your business make sense,” said Elliott in an interview with the CBC. .“They were running close to 50% or lower, which is unsustainable if you actually want to make money.”.Elliot felt the company had rent projections not based in reality on its home portfolio. The locations and homes could not garner the rent that EA said they would in their promotional material..“The company was able to pay investors a high rate of return, even with low occupancy rates and unrealistic rent projections, by continually bringing in new investors and fresh money,” he said. .Use the fresh money to pay the older investors their interest payments is a classic way to run a Ponzi scheme..Elliott filed an affidavit to support the court application filed earlier this month to appoint an independent investigator. .Mike Russell, a Saskatoon lawyer, represents the 120 investors and has applied to have a special investigator appointed. .Accounting firm Ernst & Young was appointed by a Court of Queen’s Bench justice to investigate the disappearance of between $10 million to $20 million of investor funds..Ernst & Young will present their investigation to the court in late April..The Saskatoon police said it doesn’t have any investigations into EA or its owners..Chris Oldcorn is a Western Standard Reporter based in Regina.,coldcorn@westernstandard.news,Twitter: @chrisoldcorn,.Parler: @chrisoldcorn
