Carolina Abramovich thought she had found the perfect investment opportunity. The Vancouver biomedical scientist was one of 120 investors who trusted their money with the Epic Alliance group of companies in Saskatoon. Little did she know that her pocketbook and conscience would be deeply affected.
Epic Alliance attracted investors from all over Canada, promising lucrative returns on their unsecured loans ranging from $50,000 to $500,000. The company's success seemed evident, with excellent reviews and a strong presence in the real estate investment community. They were everywhere, from investment groups to webinars.
But it wasn't just the financial aspect that appealed to Abramovich. She was captivated by the company's origin story – their mission to provide affordable housing in Saskatoon while promoting trades for women. It seemed like they were making a positive impact, and Abramovich wanted to be a part of it.
However, everything changed when Epic Alliance suddenly shut down its operations at the end of January. In a 16-minute Zoom call, the founders, Rochelle Laflamme and Alisa Thompson, informed their investors and property partners that everything was gone. Bankrupt.
The collapse of Epic Alliance sent shockwaves throughout the real estate and business communities across Canada. Investors were left wondering what happened to their money, landlords worried about the fate of their rental properties, and real estate professionals feared the impact on the housing market.
According to Laflamme and Thompson, Epic Alliance controlled 504 properties worth $126 million in Saskatoon and North Battleford. The majority of these properties were managed by Epic through their "Hassle Free Landlord Program" for out-of-province investors. Now these investors found themselves responsible for vacant and dilapidated homes, unsure of what to do next.
The situation raised concerns about the potential impact on the housing market if all these properties were to hit the market at once. The head of the Saskatchewan Realtors Association, Chris Guerette, assured that they were closely monitoring the situation, but it was still too early to determine the full extent of the crisis.
To make matters worse, it was discovered that Epic Alliance was not licensed to sell investments or offer financial advice. The Financial Consumer Affairs Authority of Saskatchewan had issued a temporary cease trade order, but it was lifted, allowing Epic Alliance to continue its operations briefly.
In a separate development, accounting firm Ernst and Young was assigned to investigate the estimated $10-20 million that investors had entrusted to Epic Alliance. The findings of this investigation are yet to be presented to the court.
As the pieces of the puzzle come together, a clearer picture of what happened is emerging. Epic Alliance, through its web of companies, offered various programs that intertwined and relied on continuous influxes of new investors and fresh money.
Their loan program, based on promissory notes, attracted investors with the promise of high returns. The "Fund-A-Flip" program involved buying properties, making improvements, and selling them for a profit. And the "Hassle Free Landlord Program" allowed investors to purchase homes and leave the property management to Epic Alliance.
However, the company was operating without the necessary licenses and registrations, leading to the cease trade order and subsequent collapse. Former employees and insiders have come forward, highlighting red flags such as low occupancy rates, unrealistic rent projections, and a constant need for new investors to sustain the company.
The aftermath of Epic Alliance's collapse has left investors in disbelief and struggling to manage properties they never intended to handle. Property managers in Saskatoon are flooded with calls from new out-of-province landlords seeking assistance.
As the legal proceedings continue and investigations progress, investors like Carolina Abramovich hope for some accountability and the recovery of their hard-earned money. The story of Epic Alliance serves as a cautionary tale for investors and emphasizes the need for thorough research and due diligence before entrusting their funds to any investment opportunity.
A screenshot from an Epic Alliance presentation to investors shows how the company's offerings were related.
Saskatoon lawyer Mike Russell is representing investors looking to find out what happened to their money.
Investor Carolina Abramovich was attracted by the story behind Epic Alliance.
Founders Rochelle Laflamme and Alisa Thompson informed investors about the company's collapse in a video meeting.
Linda Ranks, a former employee, says the numbers never added up.
Adam Elliott, another former employee, had misgivings about Epic from the beginning.
