Investors and real estate agents are still waiting to see if criminal charges will be brought following the collapse of Epic Alliance


According to Gary Busch, Epic Alliance’s business model smelled like fraud from the start.

Even today, people who lost their life savings when the Saskatoon real estate investment company collapsed in 2022 wonder whether Busch was right.

Busch is the broker and owner of Century 21 Fusion in Saskatoon. The experienced real estate agent became suspicious of Epic's practices in June 2020.

“There's a company that's buying 20 to 30 houses a month and driving up the prices,” he said in an interview. “I don't know exactly what's going on, but I think there could be mortgage fraud or manipulation of the facts.”

Man with white shirt
Gary Busch first expressed concerns almost two years before the collapse. (CBC)

The Epic Alliance group of companies abruptly ceased operations in January 2022. Investors and real estate partners learned of the collapse in a 16-minute Zoom call between company founders Rochelle Laflamme and Alisa Thompson.

“Everything is gone. Everything is bankrupt, people. It's all gone,” Laflamme said in the video from January 19, 2022.

CBC contacted Laflamme and Thompson through their lawyer at the time to ask them about the allegations. They did not respond.

However, in the Zoom conference with investors, they blamed the state regulator for the collapse.

“Unfortunately, we don’t have good news, we don’t have good updates,” Laflamme said in the video.

“The FCAA (Financial and Consumer Affairs Authority) screwed us over and that was that.”

A court-appointed investigator from Ernst & Young concluded in a 2022 report that investors may never know what happened to the money raised by Laflamme and Thompson between 2013 and 2022.

“Based on EA Group's unaudited books and records, the total funds raised from investors was approximately $211.9 million. Due to incomplete books and records prior to 2019, the inspector was unable to draw any conclusions about the use of investor funds for that period,” the report said.

The report states, among other things, that the company's “network infrastructure” disappeared from its office at 410 Avenue N South after the collapse.

“The inspector discovered an empty server rack that was believed to contain several servers containing EA Group's network data. A drill was discovered on the server rack, which was apparently used to remove the servers,” the report said.

The hundreds of homes that Epic bought for investors – and was supposed to manage for them – were returned to investors in 2022 after the company went bankrupt.

Four years after he first raised his concerns, Busch is still waiting to see if anyone will be held criminally or civilly accountable for what happened.

Lena Jerabek is an investor from British Columbia who is also looking for answers.

“I would like to know where the money went,” she said. “There are people who have lost all their savings and their pensions. I've spoken to many of them. I've spent hours on the phone with people and investors across Canada.”

The 2024 agreement

In April this year, the Financial and Consumer Affairs Authority (FCAA) reached a settlement with Laflamme and Thompson. They agreed to pay fines totaling $300,000 and were banned from selling or promoting investment products for 20 years.

The agreement specifically states that there is no fraud involved, but rather describes the fines as an “administrative penalty” that reflects the fact that Laflamme and Thompson continued to accept money from investors even after trading was banned.

“The settlement agreement is silent on the issue of misrepresentation and/or fraud,” panel chair Karen Prisciak wrote in the 11-page decision.

“It is not within the Panel's jurisdiction to lift the veil of the settlement negotiations to investigate why investor compensation was not part of the settlement agreement.”

Saskatoon police said their Economic Crimes Unit began investigating Epic Alliance in July 2022 and submitted its findings to the Attorney General's Office for comment in late March 2023.

More than a year later, it is unclear whether charges will be filed.

“We are reviewing this but cannot provide a specific timeline for a response at this time. We will provide you with a response as soon as possible,” Kerri Ward-Davis, communications officer for the Justice Department, wrote in an email on May 29.

“It just didn’t feel right”

Busch says Epic came on his radar when one of his agents made an unsuccessful offer on a home.

“We started looking into it, and the more we looked into it – and the more addresses I got – the more I thought, 'Something is wrong,'” he said.

A disturbing pattern of homes being valued higher than market value has emerged, he said.

Online Advertising
Epic Alliance advertisement for the “Hassle-Free Landing Program.” (Epic Alliance)

“The Saskatchewan market is like a hare versus a tortoise. It goes up and down nicely, nice and slow, with modest down and up moves,” he said.

“We're not Toronto. We're not going to go up 50 percent in a year. That doesn't happen here, so it was very atypical that these homes were suddenly worth $50,000 more … it just didn't feel right, didn't look right.”

Thompson and Laflamme founded Epic Alliance in 2013. It soon grew into a network of named and numbered companies, including Epic Alliance Real Estate, Epic Alliance Electrical, Epic Accounting and Bookkeeping, and Epic Holdings. It employed 118 people.

Through its network of companies, Epic served as landlord and property manager for more than 400 rental properties in Saskatoon's core neighbourhoods, including Pleasant Hill, Riversdale and Meadowgreen.

Despite all the complexity, the company operated according to two basic principles:

  • Raise money from investors nationwide to buy homes, offer improvements and sell the homes for a profit.
  • Market these homes to various investors seeking long-term real estate investments. Epic offered to find tenants, act as landlords, and provide a guaranteed 15 percent return.

The plan stalled when the province's securities regulator intervened.

According to the FCAA, which imposed a temporary trading suspension on October 21, 2021, the company was not licensed to sell investments or provide financial advice.

In November of this year, the FCAA held a hearing to consider extending the injunction. At the time, statements and letters of support for Epic Alliance indicated that the temporary suspension was having a negative impact on Epic Alliance's business.

In short: cash inflows no longer kept pace with cash outflows.

An investor story

Lena Jerabek and her husband live in New Westminster, BC, and loaned Epic Alliance $280,000 in 2021 to buy a home in the Meadowgreen neighbourhood of Saskatoon. The idea was to renovate the property and then sell it for a profit.

Everything seemed to be going according to plan until Laflamme and Thompson broke the news of the company's bankruptcy during a Zoom call on January 19, 2022.

“I think it was around February when they called investors into their office to pick up the keys,” she said.

“So we didn't have to go through any foreclosure process or anything like that. They just willingly gave us the keys back. So in my situation, we were lucky that the property was vacant. It hadn't been damaged by tenants. It wasn't renovated, but it was rentable.”

A woman poses for a photo.
Lena Jerabek says investors are still waiting for answers. (Submitted by Lena Jerabek)

The house was eventually valued at $255,000. Jerabek said the couple is in the final stages of selling the house, “and I'm going to take a loss.”

Jerabek said she knows she ultimately loaned Epic money for an overvalued property. She wants to investigate what happened to the millions she raised through promissory notes.

According to court documents, the company raised millions of dollars in capital over the course of eight years by tricking people into giving Epic between $50,000 and $500,000 in exchange for a promissory note.

The one-page notes, numerous examples of which were provided in affidavits, were models of simplicity. They included the loan amount, the start and end dates of the term, and the interest rate.

The settlement agreement with FCAA states that Laflamme and Thompson sold 96 notes with an estimated minimum face value of $4.3 million.

“That’s what I find really disturbing,” Jerabek said.

She said she was convinced that “they were basically collecting money from investors to pay other investors.”

Long-term effects

According to Laflamme and Thompson, Epic Alliance controlled 504 properties in Saskatoon and North Battleford – worth a total of $126 million – when it broke up in 2022.

So what happened to the houses?

Busch said about half have since been sold – some at losses in the immediate aftermath of the collapse, others with varying returns as the city's affordable housing supply tightened.

Barricaded house
This home on Avenue L in Saskatoon is one of hundreds controlled by Epic Alliance before the real estate investment firm collapsed in January 2022. Two Epic employees say many of the homes were unoccupied and many were boarded up. (Dan Zakreski/CBC)

The rest has now been rented out.

“Over the last year and a half, rents have gone up dramatically and they might be at a point where they're actually making some money on it or at least breaking even. So if they can tolerate it, they might just keep the apartments,” he said.

“But for a lot of people, once they got to the break-even point, they thought, 'We just want to get out of here,' and they let them go.”

Busch said he hopes for a full investigation into the incidents involving Epic and other links in the investment chain.

For example, the court-appointed investigator found that Epic worked with a small group of real estate appraisers, mortgage brokers and real estate agents.

Until the situation is clarified, questions will still remain unanswered in the public, said Busch.

“It still leaves a bad taste in my mouth,” he said. “In our industry, a lot of people look at us and say, 'How could this not have been noticed, right?'”