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Sask. real estate company that lost investors' millions reaches settlement


The founders of a Saskatoon real estate investment company that left investors with millions of dollars in losses have reached a settlement with Saskatchewan’s financial and consumer watchdog.

In a settlement with the Financial and Consumer Affairs Authority (FCAA) approved earlier this month, Rochelle Laflamme and Alisa Thompson, the founders of the now-defunct company Epic Alliance, have agreed to pay fines totalling $300,000, and are restricted from selling and promoting investment products for 20 years.

Laflamme and Thompson started Epic Alliance in 2013. The company offered a "hassle-free" landlord program — offering to manage homes for out-of-province investors.

Under the landlord program, the investor would take out the mortgage on the home and Epic Alliance would assume responsibility for finding tenants and maintaining the property.

Many of the homes actually sat vacant as the company promised the investor a 15 per cent guaranteed rate of return on their investment.

A Saskatoon attorney representing some of the investors told CTV News in 2022 the pair were "using new money to pay old money."

"Investment products should generate returns on (their) own, not by acquiring new money,” Mike Russell said.

The company also offered a "fund-a-flip" program, where investors could buy homes through Epic Alliance — which would oversee improvements and upgrades — and then sell for a profit, often advertised as a 10 per cent return on a one-year investment.

The meltdown of Epic Alliance resulted in significant financial losses for investors, mainly from British Columbia and Ontario.

In their settlement with the FCAA, Laflamme and Thompson admit to selling investments when they were not licenced to do so, and continuing to raise investment money after the FCAA had ordered them to stop.

What the settlement doesn’t address are any allegations of fraud.

“The settlement agreement is silent on the issue of misrepresentations and / or fraud,” the FCAA panel wrote in its April 5 decision.

“There are no facts before the panel to evaluate whether the respondents engaged in misrepresentations or fraud vis-à-vis their investors. Furthermore, the statement of allegations did not allege the respondents’ conduct was fraudulent … the respondents’ culpability is limited to these specific violations of the Securities Act.”

Because there was no finding of fraud, the FCAA ruled it was not necessary to permanently ban Laflamme and Thompson from the investment industry.

"A permanent ban is not appropriate in these circumstances given that there is no agreement or finding that the respondents were fraudulent," the decision says. 

"A 20-year prohibition from involvement in the capital markets of Saskatchewan is significant."

Last year, the Saskatoon police confirmed a criminal investigation into Epic Alliance was ongoing. When contacted by CTV News on Tuesday, a police spokesperson said investigators were consulting with the Crown over whether charges could be laid.

While the FCAA acknowledges the effect Laflamme and Thompson’s conduct had on their investors, the settlement does not include any compensation for them.

According to the FCAA, 96 investors paid an estimated $4.3 million to Epic Alliance over six years.

In January 2022, Laflamme and Thompson hosted a Zoom meeting to inform investors of the company's imminent demise.

According to a transcript of the call included in a court filing, the company's financial situation was described as a "s--t sandwich."

"Unfortunately, anybody who had any unsecured debts ... it's all gone. Everything is gone. There is no business left and that's what it is," the transcription said.

—With files from Keenan Sorokan Top Stories

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