Epic Alliance under investigation by Sask. securities watchdog over investment scheme
Affordable housing advocate describes company's vacant rental holdings as 'sad state of affairs'
The Financial Consumer Affairs Authority of Saskatchewan (FCAA) is investigating the Epic Alliance group of companies in Saskatoon, said the executive director of the authority's securities division.
The Epic group was hit with a temporary cease trade order in October 2021 that was lifted the following month.
"We're still investigating," Dean Murrison said in an interview.
"The next step would be a statement of allegations, and that would be public and available for everybody to see. And then of course, if they did that, it would go to a hearing and that hearing would be public as well."
The FCAA investigation comes as affordable housing advocates in the city are wrestling with the possible ramifications of the company's collapse.
The Epic group amassed a portfolio of more than 400 homes in the city's core neighbourhoods since its creation eight years ago. It managed the homes for mostly out-of-province investors who wanted to become involved in real estate but did not want the day-to-day responsibilities of a landlord.
Former employees told CBC that, when the company abruptly shut down in January, more than half of the 400 homes were either in dire need of repair or unoccupied.
This frustrates Toby Esterby.
Esterby heads the board of the Saskatoon Housing Initiatives Partnership. A long-time affordable housing advocate, he said it's hard knowing there is a pool of unoccupied homes in the city's core.
"It is problematic to see that volume of houses that could potentially be more affordable rentals for families that desperately need those more affordable rentals," he said.
"The fact that some, or half, or most of them may be sitting empty is really a sad state of affairs when we have many, many, many people that do not have a roof over their head right now."
Hilary Gough is similarly frustrated. She is the councillor for Ward 2, where the majority of the rental homes are located.
"It's clearly a really big challenge," she said of dealing with the properties.
"But I also see a real opportunity here in terms of the trajectory of these properties and co-ordinating efforts to see them serve the needs of community. And when I say that, I'm talking about availability of quality, affordable housing for folks."
Gough said there is "no easy button" to connect the property owners with potential tenants, but Esterby noted "there's a small army of NGOs and non-profit organizations and individuals in this community who want to make a difference."
"An affordable home can be developed into a place of sustainability for a family, and I think that's the opportunity that lies before us," Esterby said.
In the meantime, Dean Murrison said the FCAA investigation will continue. He expects the decision whether to proceed with allegations against the companies and their principals, Rochelle Laflamme and Alisa Thompson, should be made within the coming months.
That's not the only active investigation.
A Court of Queen's Bench judge assigned accounting firm Ernst and Young to track what happened to the more than $10 million raised by the company, which issued promissory notes to more than 120 investors.
It was this program that attracted the attention of the FCAA and led to the temporary cease trade order last fall.
Murrison would not say why the FCAA became involved when it did — or why it had not looked at the promissory note program earlier. Epic Alliance had aggressively promoted its business on social media and in real estate forums, webinars and podcasts.
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