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Calgary Herald

Calgary real estate fraud leaves dozens of investors fighting to recover millions

Article content 'Mr. Hare has defended and continues to dispute the serious allegations made against him in the Action, which has not yet proceeded to the discovery phase,' Hare's lawyer said in an email. 'Our client is confident that a just resolution will be reached in the Action going forward.' Article content The managing broker declined to comment on ongoing litigation and emphasized that neither he nor Re/Max Central was named in the civil suit. Article content Re/Max Central was long considered one of the top-performing Re/Max offices globally. According to the company's website, the brokerage consistently ranked among the leaders in sales both in Canada and internationally. Article content In a statement, Re/Max said Drinkwater has not been affiliated with the brand since April 2024. Article content 'The actions alleged are not representative of the values and principles upheld by REMAX and its franchisees and their affiliated sales associates. The REMAX network shares and honours a commitment to professionalism and honesty,' Re/Max said in an email. The company did not comment on allegations against Hare. Article content Article content Meanwhile, the Real Estate Council of Alberta (RECA) is facing mounting criticism from victims and industry leaders over its handling of Drinkwater's case, which they say raises questions about the industry watchdog's ability to fulfil its mandate to protect consumers. Article content Several victims allege the regulator has tried to distance the fraud from the real estate industry to avoid paying out claims through its Consumer Protection Fund. They accuse the regulator of pushing Drinkwater to characterize the fraudulent investments as unrelated personal loans. Article content RECA declined to comment on those claims, citing ongoing proceedings. Article content 'We're very limited in what we can say at this time,' a RECA spokesperson said in a May 15 email to Postmedia. 'Like other regulatory or judicial processes, we want to ensure our actions don't impact the independent hearing process or jeopardize victims' rights.' Article content Making a claim to the Consumer Protection Fund is the only path to recover losses for many victims, who say the process to apply is unclear and costly. Article content Several victims who spoke to Postmedia asked not to be identified, citing concerns it could affect their claims with the regulator. Article content One victim said she turned over hundreds of pages of evidence pertaining to the scheme to the regulator, who later told her in an email there were still 'gaps' in her file. Article content Article content Shelley Todd initially felt hopeful after reporting to the regulator, believing its process would bring a just resolution for victims — but that hope quickly disappeared, she said. Article content 'RECA's requirements for accessing the assurance fund are complicated — close to impossible without legal representation,' she said. 'Luckily, my lawyer has shown compassion with regard to legal fees, but it's still costing me a significant amount to meet RECA's requirements.' Article content Todd says mounting legal fees are a barrier for victims to access payment from the fund. Article content 'It feels like the regulator is re-victimizing us,' she said. 'It's so expensive and it causes more hardship.' Article content Her lawyer echoed those concerns, noting the legislation meant to provide consumer protection instead forces defrauded victims to pursue costly litigation before they can access the fund. Article content 'The process to get to consumer protection ends up being impractical for most people and a significant and costly barrier,' said Ben Frenken, a partner at Code Hunter LLP, in a statement. Article content Article content Brad Mitchell, CEO of the Alberta Real Estate Association, criticized the regulator for what he called serious regulatory failures exposed by the Drinkwater case. His association represents and advocates for more than 15,000 Realtors across Alberta. Article content 'The regulator has absolutely failed in its mandate … to detect, suppress and prevent fraud in the industry,' he said, calling for 'wholesale changes' at the regulator to restore public trust. 'They're not fulfilling their sole purpose. Article content 'What is the point of even having a regulator if they are not going to act?' he said. 'If the courts are always forced to rule before the regulator does something, then it begs the question, what do we need a regulator for? Article content 'This was a completely preventable scenario,' he added. 'It really is a black mark on the industry.' Article content For victims, the path to justice remains uncertain. Article content The regulatory process has been slow, with no decision yet on possible sanctions. Meanwhile, the criminal case against Drinkwater is still in its early stages. Article content He was to appear in court on June 11 on the fraud charge, but his hearing was adjourned to August 11. He has yet to enter a plea. Article content After being betrayed by the Realtor she trusted and let down by the system meant to protect her, Shelley Todd is now focused on helping others navigate the aftermath of the scheme. Article content 'I have compassion for Eric, but I'm on the side of justice,' she said. 'We've been traumatized by this. So many victims feel shame, believing this was their fault.' Article content For Todd, the fight is no longer just about recovering her losses. She's spent countless hours helping others prepare their claims to the Consumer Protection Fund and continues to push for broader accountability.