Private Sector Act dot Com

[eric]

I must admit this update is coming out in dribs and drabs, but in between my normal daily activities I'm trying to keep the masses informed. Just a quick update tonight, if I have time tomorrow I will get into details of how their scam is actually worked right now.
Their whole scam relies on the fact that they are claimed to be an un-named and anonymous group of 2300 "investors". However, unlike the vast majority of real estate professionals peddling their trade there are no pictures and bio's of said professionals to convince us of their competence. Instead they use a whole series of manufactured names for their companies. Examples include:
1. Excell Wealth Management;
2. Kelowna Financial Investments;
3. Okanagan Investments Financial;
4. Cl Busson Property Investments.
The last one caused me to choke up my coffee over the keyboard, since the Bussons are/were very prominent and respected members of the BC community. I leave it up to the reader to do their own research - just google Busson RCMP. I did some research and there is nothing to indicate they are involved with this. I suspect that if the Bussons knew their name was being used in vain our pair would be receiving knocks on the door from rather large gentlemen wearing trousers with yellow stripes down the side. Similarly, there exist emails from the pair that would indicate they are established realtors, but there are very slight differences. I won't give details to protect the innocent, but here's an example - I can create an email address of Burnaby48(at)gmail.com and most people would think it's just our esteemed moderator who was out pubbing and while in his cups made a typo, but really it's a pig farmer from Alberta talking to you, rather than a retired CRA auditor from Lotus Land. These manufactured email addresses seem to have their account details shared between members of the group since the syntax and up to date knowledge of a conversation make it appear that you are talking to more than one person.

In a similar fashion, and this is a note to the moderators, there exist a multitude of apps that allow the user to use a manufactured phone number. Any phone number that Derek or Kumar use is a "burn" number that is generally only valid for one victim. That being said, since they know they are being tracked by multiple people, they vet their potential victims by demanding a physical voice conversation with them before anything proceeds further. Here's an example of a stock email conversation from them in reply to an enquiry about an ad they posted:
On ******, "Okanagan Investmentsfinancial" wrote:
>>>>>>>> You recently replied to an ad of ours regarding a ZERO DOWN or NO
>>>>>>>> QUALIFY / Money Down real estate purchase.
>>>>>>>> We can put you in touch with the owners for more of the details on
>>>>>>>> the home.
>>>>>>>> Get back to us with your phone number for more information,
>>>>>>>> > *Okanagan Investments Financial*
>>>>>>>> On ******, !!!!! wrote
>>>>>>>>> Why do you need my phone number? I just want to know more details
>>>>>>>>> on this home.
>>>>>>>>> !!!!!!!
>>>>>>>>> On Feb 21, 2016 9:33 AM, "Okanagan Investmentsfinancial" wrote:
>>>>>>>>>> Hi !!!!!!!!!,
>>>>>>>>>> We would be happy to ! What is your phone number so we can
>>>>>>>>>> reach you to provide that info accordingly?
>>>>>>>>>> (much redacted to protect the innocent)

Hopefully tomorrow I can find the time to post details of the two varieties of the scam they are working right now...

[eric]

Ok, time now to talk about how the pair market their scam. As they explain interminably on the Real Estate Council of Canada web site it is perfectly legal to sell your home yourself without benefit of a formal agreement with a realtor. It's interesting to note that two of their sites, canadapropertyguys.com and CommissionFreeSystems.com could easily be confused by a google search for two of the major and legal businesses of this type - propertyguys and ComFree. In simple terms, they try to induce buyers or property investors to put a down payment down on a property and then obtain financing from their imaginary group of 2300 private investors..

So, we need a source of for sale by owner properties. As usual, kijiji comes through with this one here:
http://www.kijiji.ca/v-house-for-sale/s ... 1122008885
This is the ad posted by the home owner.

The pair just take the ad (basicly ad hijacking) and repost it themselves with their standard come-on lines:
http://www.kijiji.ca/v-house-for-sale/r ... 1145203316
and of course their sales pitch proforma is posted with the ad:

Many More Homes Available Contact us at:
CommissionFreeSystems.com
Have a House to Sell? We can help you Commission Free !
CommissionFreeSystems.com
BUY ZERO DOWN SPLIT LEVEL HOUSE ON 6 ACRES WITH SHOP NEAR THEODORE
Buy your Dream Home with Zero Down Payment Exclusively
Vendor Take-back Mortgage Available - If you are having trouble with the bank and are seeking Third party financing at great rates we can help.
If you don't have a down payment then we can offer low down payment options. Email us for more details.

Sometimes they can't find an appropriate property to market so they just make one up.
edit: I was asked to remove details about that particularly property since a few things are afoot...

Hmmm, what other hilarity inducing ads have they posted? Personally I liked the ad (now removed, but I have a screen shot) of a property advertised as being in Penticton but was actually for a summer vacation property in France. Very often they play somewhat fast and loose with the poor home owner who only learns that their ad has been hijacked when Derek phones them up saying he would like to show the property to a couple of buyers. Their main target victim however is the potential buyer. Sometimes in their minds they get lucky and in one instance took a 12 K$ down payment for a property that had allready been sold to someone else.

In my next post I will get into how they actually make their money....

[The Observer]

In my next post I will get into how they actually make their money....

Ooh! Ooh! I know! I know! Call on me, I figured it out!

They make their money the old fashioned way...they steal it!

[eric]

In my next post I will get into how they actually make their money....

Ooh! Ooh! I know! I know! Call on me, I figured it out!
They make their money the old fashioned way...they steal it!

Actually they don't. (steal the money that is) They just rely on the fact that their victim will eventually realize it's a scam and walk away from the deal thus losing their deposit, but I'll get into that later, along with their justifications. Hint: suing a pair with no financial or physical assets in their own names and monies handled through numbered corporations controlled by wives may be an exercise in futility.

[The Observer]

Actually they don't. (steal the money that is)...

No, they do. They con people into believing that they can buy a house through their services, which Derek and Kumar know will never happen. And they know that they would never return the deposit. Sounds like stealing to me. That is what fraud is.

[Arthur Rubin]

I think the legal term is "theft by deception". But I'm not a lawyer.

[eric]

I think the legal term is "theft by deception". But I'm not a lawyer.

I must admit I have been remiss in my updating of their activities. As you may have noted my postings generally go in two week cycles corresponding to my work schedule and things have been rather busy personally on the modern pig farming front - spent yesterday taking blood samples from 200 young ladies with the same disposition as the equivalent group of 14 year old human females - they were climbing the walls.

Anyways, to get back to business, they have two primary money making means. I have fully analyzed the one, and will be posting about it this weekend. It can be be best described as "theft by giving up", rather than theft through deception. Their other method stinks of straw buyer fraud, but I have to grovel through their web postings before I post about it.

[eric]

I haven't been at my best posting about Derek and his crew but there has actually been a lot happening in the background to keep me busy, just not the exciting stuff that can be broadcast in my breathless reporter mode of speech. It's been a lot of hard slogging behind the scenes taking months to achieve fruition, but developing cases of real estate fraud takes months typically. As I mentioned previously when I quoted from Longfellow:

“Though the mills of God grind slowly, yet they grind exceeding small; Though with patience He stands waiting, with exactness grinds He all.”

So here's the latest results of the efforts of the "group of 15 or so" that I can publicly reveal:
https://www.reca.ca/consumers/complaint ... -Admin.pdf
https://www.reca.ca/consumers/complaint ... -Admin.pdf

Not bad, 50 K$ in fines. I will try to post this weekend some background of Derek and Kevin's activities that led to these legal decisions. From communications received from the pair they seem to be a little unhappy. They just can't wrap their collective heads around the fact that they have accumulated so many victims that appropriate crowd searching techniques are their downfall.

[notorial dissent]

While it is all well and good that the Real Estate Council has gotten off their collective hindermosts, this is going to accomplish precisely what? He has been under a court injunction since 2014 and it has not hindered him in the least, he has apparently openly violated the court order and the Act in the first quarter of 2016, which is what this enforcement(s) pertains to. It appears that they only received complaints for the first quarter and that is all that they have acted on. I don't see that this is going to accomplish anything unless they actually take legal action against him, and so far it doesn't look like they are going to. I also don't see much prospect of Johnson just walking up and handing over the fines either. Maybe I'm missing something here??

[The Observer]

I wondered the same thing. The only way this is going to be resolved is for the judicial system to get involved and drag Derek into court to face the music.

[eric]

Something about being dragged into court? Now that it's public knowledge here we go:
https://www.reca.ca/consumers/publicati ... nturn.html

RECA fined Derek Johnson a total of $65,000 for unlicensed real estate and mortgage brokerage activity. When Mr. Johnson did not stop his unlicensed activities, in December 2014, RECA obtained a Court of Queen’s Bench injunction against him, ordering him to cease and desist trading in real estate and dealing in mortgages without a licence.
RECA continues to receive reports from consumers who believe Mr. Johnson’s unlicensed activities are continuing. As a result of those reports and its own investigation work, RECA has applied to the Court to have Mr. Johnson and his associates found in contempt of the December 2014 court order. That application is scheduled to be heard on April 20, 2016.

and Derek's defence will rest on the following, again now public knowledge:
http://www.realestatecouncilofcanada.ca ... ment/pcafx
I particularly liked the salient point <grins> that because Derek is not referred to by "title" he must be innocent. In other words, because he was not called a realtor, agent, or even mister, the law doesn't apply to him.
Damn, enough to make me call in sick tomorrow just to watch the fun at Queen's Bench

[The Observer]

All I can say of Derek's defense is to quote from the RECC page: "Rediculous!" [sic]

[eric]

All I can say of Derek's defense is to quote from the RECC page: "Rediculous!" [sic]

And his defense was a failure:
http://www.cbc.ca/news/canada/calgary/d ... -1.3545046
All five guilty as charged, they're asking for two years. The only one who was a bit of a surprise to me was Johnson's wife although I suspected there was a another person involved in some of the internet postings but compiling the evidence would require a court order to get ISP's to cough up the evidence.

Your intrepid reporter is booking June 7 off work to generate a report for Quatloos.
edit: - the particular Master of Court has had dealings with Derek before, who knows maybe he will get The Honourable JD Rooke the next go around.

[notorial dissent]

Interesting development, wonder if they will actually jail them as they need to be.

[eric]

The way I understand it is that with a contempt of court conviction, even if the penalty is only a fine, there are much better chances of collection. In other words, you have the full power of the Crown to track down and seize assets, place garnishee orders, and stop renewal of thing's like driver's licences.

[notorial dissent]

All well and good if they have something to garnish or seize, but since they are basically self employed and probably pulling it out of the bank as fast as it comes in, probably not much to get. I really don't hold out much hope of their once sucker client getting their $30k back.

[eric]

All well and good if they have something to garnish or seize, but since they are basically self employed and probably pulling it out of the bank as fast as it comes in, probably not much to get. I really don't hold out much hope of their once sucker client getting their $30k back.

Very true - Derek can claim truthfully that no-one has ever sued him to recover their lost deposits simply because collection would be so difficult. Roughly speaking, some of the parties involved spent any monies received on a certain white powder that goes up your nose, and others have no jobs, no assets in their name, and have claimed no taxable income to the CRA for years. However, the net has been cast very wide - all money and many of the property deeds went through corporations and bank accounts controlled by Cinnamon, and the Johnsons lived a comfortable lifestyle in Calgary, although assets such as their home were in the wife's name. Certainly not my area of expertise to track the money flow.....

[The Observer]

All of which points up the need for the justice system to realize that fraud such as this has to result in a criminal prosecution.

[eric]

All of which points up the need for the justice system to realize that fraud such as this has to result in a criminal prosecution.

Some of those involved believe the same thing which may account for the fact that RECA is asking for jail time. I checked and the crew were still peddling their wares on kijiji literally right up to the very instant they walked into court. New ads were posted by them at 10 am on Wednesday which was their court time and date. BTW, their web sites and many of their ads are still up, even though RECA's Statement of Claim asked for them to be taken down.

[notorial dissent]

Since they don't have what I would call a track record for obeying court orders, I'm not in the least surprised. I suspect that short of jailing some or preferably all of them and ordering the hosting company to take it down this is about as much action as the court order will engender. They have already shown they will disregard court orders, why this time around should be any different is beyond me. I'm actually impressed they showed up for court.