Carolina Abramovich says the investment appealed to both her pocketbook and her conscience.
The Vancouver biomedical scientist is one of 120 investors who gave unsecured loans of between $50,000 and $500,000 to the Epic Alliance group of companies in Saskatoon.
“I heard about Epic Alliance with real estate investment groups, they were really everywhere,” she said in an interview.
“Excellent reviews from anybody that invested with them, small or big. Real estate investment groups, podcasts, webinars — they were everywhere.”
While it seemed to make financial sense, Abramovich said that she also fell hard for the company’s origin story.
“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.”
The Epic Alliance group of companies shut down its operations at the end of January. 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.
The news of Epic’s collapse went off like a bombshell in real estate and business circles across the country.
Investors wanted to know what happened to their money, homeowners across Canada wanted to know who would manage their Saskatoon rental properties and real estate professionals worried about what would happen to the hundreds of core neighbourhood homes.
According to Laflamme and Thompson, Epic Alliance controlled 504 properties in Saskatoon and North Battleford — valued at a combined $126 million — when it fell apart.
The pair spoke to investors in an “E.P.I.C. Hour” video posted in early January, only weeks before the company shut down. The majority of the properties — a combined $115 million worth — are in Saskatoon, Laflamme said on the video.
Through its network of companies, Epic acted as landlord and property manager for more than 400 rental properties in Saskatoon’s core neighbourhoods, including Pleasant Hill, Riversdale and Meadowgreen.
It managed these homes for out-of-province investors through its “Hassle Free Landlord Program.” These investors, primarily in British Columbia and Ontario, are now suddenly long-distance landlords responsible for the properties.
Two former Epic employees say that as many as half of these homes are vacant, with many boarded and in dire shape. The fear in the local real estate community is what might happen should dozens, if not hundreds, of these homes hit the market at the same time.
The head of the Saskatchewan Realtors Association says it’s closely tracking monthly stats to gauge the impact.
“We’re not seeing evidence of a crisis in the market, and I think it’s too early for that,” chief executive officer Chris Guerette said in an interview.
“I would certainly think that it’s a crisis for those who have invested, because of the quantity involved.”
Earlier this month, in a separate development, Court of Queen’s Bench Justice Allisen Rothery assigned accounting firm Ernst and Young to investigate what happened to the estimated $10 million to $20 million the 120 investors placed with Epic Alliance.
The company was not licensed to sell investments or offer financial advice, according to the Financial Consumer Affairs Authority of Saskatchewan (FCAA), which issued a temporary cease trade order on Oct. 21, 2021.
In November, the FCAA held a hearing to consider extending the temporary order. At that time, declarations and support letters for Epic Alliance “indicated that the temporary cease trade order was negatively impacting Epic Alliance’s business.”
It was lifted Nov. 16.
Saskatoon lawyer Mike Russell represented the 120 investors when they applied to have the special investigator appointed. They want to find out what happened to their money.
When asked by CBC to describe what happened with the company and its various programs, he replied with two words.
How it worked
The Ernst and Young investigators are due to present their findings to the court in late April. Until then, a partial picture of what happened emerges through court documents, interviews with former employees and the words…