Calgary Real Estate Trusts - Are They All Scams?
In November 2008, at the height of the unbelievable residential mortgage fraud scam that hit Calgary (most prominently from about 2006 to approximately late 2010), Rainbow Investigations wrote on one of our “Read The Latest Investigative News” stories, that an alternative to investing in residential real estate may be real estate trusts (ie a real estate investment where a investment organization invests in multiple real estate projects). We went on to explain that these kind of real estate investments seem to require more due diligence, and may appear to be more legitimate. But, we said at the time, even these types of investments should be checked out.
Some four years later, we really have our doubts of this concept. In recent years the following real estate investments, many of them known as "Exempt Market Issueres" where they investment propreitors don't have to have an approved Prospectus, all based in Calgary, have either fallen apart or are in serious trouble – Shire International Real Estate Investments, Concrete Equities, Signature Capital, Platinum Equities, and most interestingly Foundation Capital otherwise known as the Harvest Group of Companies.
Concrete Equities was started in 2005 by Dave Jones and Dave Humeniuk in 2005. The article in Canadian Business tells what happened in this debacle – read in here.
Shire International Real Estate Investments was the brainchild of Jeanette Cleone Couch. In March of this year the Alberta Securities Commission banned Couch permanently from trading in securities, and fined her $750,000. The ASC decision describing this mess is here.
Signature Capital seemed to fall apart in about 2009. This particular situation voluntarily was given to a Receiver (Ernest and Young), and it appears the investors did get some relief towards their investments.
Platinum Equities continues to be in the news today, (October 2012), and there is now very aggressive litigation filed in Queen’s Bench Calgary on behalf of investors. The ASC has been involved in this matter within the last few weeks. The September 2012 release from the ASC on this matter is here.
Foundation Capital, otherwise known as the Harvest Group of Companies is probably the most interesting of all the trusts that seem to have recently failed. Foundation Capital was the corporation run by Lethbridge native Ronald Aitkens, and was very heavily promoted by a well known politically right of center Christian, Roy Beyer. Beyer was on the Chorus Radio every Sunday under the show “The Money Show” and the company used to have regular investor meetings at their office in south Calgary. "Bring your notebook, and not your chequebook" used to be their slogan.
My, how things have changed today. Beyer has left the company, and is apparently running Beyer Consulting. While the office seems to still exist in the south Calgary area, most of the staff are gone, including all the salesmen, and there are all kinds of blogs, and investor support groups propping up. One group is known to have hired a law firm, and plans on filing a Statement of Claim in the near future to try to recover investor losses. This one does not look good down the road.
Of course these are the more formal real estate investments. Then there are still the Kijiji ads out there, the web listing services of houses supposedly providing unlicensed real estate services to find you your dream house for free, and the list goes on and on. On October 18th, 2012 Rainbow Investigations successfully aided two Calgary residents to get a $22,000 judgment in Provincial Court Civil Division against two well known “real estate investors” who did not forward a deposit they received which was for the purchase of a house. The “investors” instead wanted the potential buyers to look at another property after they were duped out of the first one.
So the point of all of this is that, no matter what anybody may tell you, investing in real eatate does have risks. And in this town, real estate fraud, largely an unregulated buyer beware industry outside of the formal licensed realtor network, continues to be the number one consumer issue here in Calgary.
Service Alberta, and Manmeet Bhuller - have you read the "Latest Investigative News" lately? Honk Honk...
If you are interested in investing in real estate in Calgary, you better do your homework. Anything less and we may be writing about your loss next.
Date of Story: Saturday, October 27, 2012
Story Posted By: Ron Reinhold
Source: Ron Reinhold
Return to the Investigative News
To Top of Page