It’s presupposed to be a contented day — closing the deal on one of many largest transactions in your life.
However behind the garden indicators and open home doorways in Calgary’s real estate sector, a nefarious scandal has been unravelling for years.
Calgary actual property agent Derek Davidson says he’s considered one of dozens of victims.
“I used to be being consistently assured, misled, down the trail till he bought to the purpose he may not disguise it.”
Over the previous a number of years, Davidson says he’s been ready for his a reimbursement after lending former actual property agent Eric Drinkwater $80,000.
“(Drinkwater) continued to delay and mislead individuals, telling him they had been going to get the cash… till (the scheme fell aside).”
Davidson is considered one of a number of individuals who spoke to International Information, saying they had been victimized in the same method — by a posh bridge financing scheme orchestrated by Drinkwater.
He says he knew of Drinkwater by way of the trade — working with him prior to now on offers or operating in to him at actual property occasions.
At some point, Davidson says Drinkwater approached him with a proposition. Drinkwater mentioned his shoppers wanted a bridge financing mortgage to safe a down fee on their subsequent property earlier than formally promoting their present one.
Davidson says these loans are frequent — however usually they’re finished by way of lending corporations or banks.
What made this one distinctive, in keeping with Davidson, Drinkwater advised him — his shoppers had been unable to safe the mortgage within the regular style, so the mortgage would include a good-looking return on funding — delivered to him in brief order.
“I wouldn’t have given it to him on a handshake,” Davidson says.
“I felt I used to be assured and safe in his monitor report and the paperwork that had been signed.”
Davidson mentioned he hasn’t seen a dime of it within the two years since.
“He began giving me screenshots of the cash in his checking account — it’s there,” Davidson explains, saying Drinkwater would give him excuses corresponding to technical troubles on the financial institution, or household issues delaying the compensation.
By July of 2024, Davidson had run out of persistence and contacted the Calgary Police Service.
“I imply, I went from pondering I used to be going to get my a reimbursement, I’ve simply bought to be affected person, to (pondering) I’m by no means going to get my a reimbursement, to realizing I used to be defrauded and duped, to realizing I used to be considered one of many.”
By the point legislation enforcement had been made conscious of the allegations, two different investigations had already begun.
The Actual Property Council of Alberta (RECA), which regulates actual property brokers within the province, had suspended Drinkwater’s actual property licence in June of 2024 — though it had already lapsed two months prior.
That very same spring, Calgary lawyer Blair Ector had additionally been diligently engaged on the case after being approached by a handful of shoppers.
The tales of his shoppers adopted the same path to Davidson’s account of his expertise with Drinkwater — besides his shoppers weren’t concerned in the actual property trade.
Some had been private buddies of Drinkwater. Others met him by way of staff sports activities.
“Initially when (Drinkwater) would begin with a lot decrease quantities with excessive charges of return, and he would often pay that first, make the primary fee again in direction of the smaller loans,” Ector says.
“After which he would steadily and progressively construct larger and larger loans.”
Ector quickly filed an announcement of declare on behalf of 4 shoppers — which court docket paperwork present are collectively owed greater than $2.2 million by Drinkwater.
“(The loans) could be backed by promissory notes, pledging his home as safety for varied gadgets,” Ector says.
A civil court docket choice by Justice Barbara Romaine says these info weren’t disputed by Drinkwater.
“Mr. Drinkwater would execute promissory notes, which included the principal quantity of the mortgage, the return, and the due date, and which had been sometimes secured towards property that had been mentioned by Mr. Drinkwater to be his property. These property included his private car and a house,” Romaine’s choice reads.
“The lengths that Drinkwater went to… it was a reasonably subtle fraud,” Ector says.
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Through the investigation by Ector and the Actual Property Council of Alberta, the size of the fraudulent scheme turned extra clear. No less than 71 potential victims have been recognized.
In Could of this 12 months, Drinkwater was charged by Calgary police with one depend of fraud over $5,000.
“Up to now, 16 victims have come ahead to police with a mixed lack of greater than $1.9 million,” the Calgary Police Service wrote when asserting the cost.
Together with his licence at present suspended, the Actual Property Council of Alberta is engaged in ongoing disciplinary hearings with Drinkwater.
Investigation deeper than Drinkwater
Court docket paperwork present the investigation discovered considerations about Drinkwater reached the desk of two different distinguished males within the Calgary actual property trade — the proprietor of Re/Max Central, Pat Hare, and managing dealer, David Lem.
In court docket proceedings, Drinkwater claimed Hare — who can be his uncle — was conscious of his scheme for greater than 5 years earlier than the civil investigation started.
In court docket questioning, Lem admitted to being conscious of Drinkwater not repaying private loans as early as December 2021.
Over the following a number of years, court docket paperwork present communication between Hare, Lem and Drinkwater, together with a March 2023 e-mail from Lem, to Drinkwater and Hare:
“We’ll make each effort to diffuse and scenario that involves our consideration that you simply make us conscious of and we’ll depart it to an inner matter right now.”
Based on a choice within the civil court docket motion, three days earlier than that e-mail was despatched, a doc was added to Mr. Hare’s assistant’s laptop that detailed Drinkwater’s fraudulent scheme in its entirety.
Based on the choice, an e-mail trade between Hare and Drinkwater occurred in early August of 2023, wherein Hare was advising Drinkwater to use for chapter.
Based on the court docket choice, Drinkwater acknowledged to Hare that he would “name RECA,” to which Hare replied:
“You do not need to name RECA except you go bankrupt. What are you going to inform them that you simply stole different individuals’s cash otherwise you put them on a Ponzi scheme”
Regardless of their information of complaints, neither Hare nor Lem reported Drinkwater’s conduct to the Actual Property Council of Alberta, in keeping with Justice Romaine’s choice.
Ector remembers seeing that trade for the primary time.
“That was fairly surprising, to see to see direct reference to calling it a Ponzi scheme — you don’t anticipate that once you’re placing collectively the monetary transactions, all of the late nights engaged on this.”
The journey in direction of justice
Though Drinkwater hasn’t held an actual property licence in Alberta since April 2024, many victims inform International Information the wheels of justice are spinning far too slowly.
Drinkwater’s listening to with the Actual Property Council of Alberta remains to be ongoing. No settlement has been reached in his civil lawsuit with Ector’s 4 shoppers.
Drinkwater will seem in court docket on Aug. 11 on his felony cost.
Davidson says he’s considered one of many who’re nonetheless ready.
“It’s taken a 12 months to get thus far. He admitted to RECA instantly of his conduct — and there have been different (events aware of the scheme) that haven’t but acquired any sanction.”
A number of new developments have inched victims nearer to the justice they search.
In Could, Re/Max Canada all of a sudden ended its franchise settlement with Re/Max Central.
“The REMAX community shares and honours a dedication to professionalism, integrity and honesty,” the corporate mentioned on the time.
“The purpose will not be merely to fulfill minimal necessities of relevant legal guidelines, rules {and professional} requirements, however to aspire to even increased ranges of professionalism.”
Since then, the brokerage has continued to function beneath the identify 4th St. Holdings.
The Actual Property Council of Alberta tells International Information the brokerage is within the technique of winding down operations.
“We proceed to watch the actions of 4th St, Holdings to make sure ongoing compliance with all our regulatory necessities,” a RECA spokesperson says.
RECA has additionally issued Notices of Listening to to each Hare and Lem, alleging consciousness of Drinkwater’s conduct associated to fraudulent exercise as early as 2021.
Each Hare and Lem will seem in entrance of the council in mid-August. Hare has denied the allegations in his Assertion of Defence.
International Information has made a number of makes an attempt to contact Hare, Lem and Drinkwater on these varied private issues. All efforts have gone unanswered.
The battle for compensation
Regardless of progress in latest weeks in direction of justice and sanction at each RECA and thru the court docket system, victims and people claiming to be victims nonetheless await phrase on when — or if — they’ll ever get their a reimbursement.
“I’m diligently and constantly making an attempt to pursue justice — not only for me however for the opposite those that want it greater than I do,” Davidson says.
“So I’m regular in my resolve, I’m hopeful, however I additionally notice I’ve to let the method play out.”
For greater than 40 years, RECA has been in command of a Consumer Protection Fund, (also referred to as the Assurance Fund) paid into by realtors throughout the province.
People are allowed to use for a most compensation declare of $35,000 in the event that they imagine they’ve been defrauded by a licensed actual property or mortgage skilled.
“We perceive how tough and irritating it may be for individuals who have suffered monetary loss to navigate this course of,” a RECA spokesperson tells International Information “Nobody needs to be within the place that Drinkwater has put them in.”
“This can be a advanced case, and we encourage victims to contact RECA straight with any questions on the Assurance Fund. We’ll stroll them by way of the method we’re required to observe to evaluate every declare and allow them to know what data we want.”
RECA says it’s going to take time for every software to be reviewed by itself deserves to find out eligibility.
However a number of victims or claimants who spoke to International Information on situation of anonymity say their efforts to work with the regulator have been unsuccessful for a wide range of causes.
On this case, the council says most of the victims gave Drinkwater what amounted to private loans, not tied to an actual property transaction.
Ector has been combating on behalf of his shoppers for entry to the Fund for months now.
“We’ve got met, in our view, the necessities to make the purposes to (RECA),” Ector says. “The Assurance Fund exists to guard the general public from fraud. In our views, this meets it… quite a lot of it’ll be in (RECA’s) fingers.”
RECA says the fund has paid out roughly $3.6 million in compensation since 1985, together with $156,000 within the earlier two fiscal years mixed.
Points with the regulator
International Information spoke to a number of trade sources for this story.
Lots of them share a standard perception — that the regulator could have had the possibility to cease Drinkwater’s scheme sooner than it did.
“This was delivered to RECA lengthy earlier than 2024,” explains Brad Mitchell, CEO of the Alberta Actual Property Affiliation.
“What they did with it’s actually what’s in query, however it was very clear to lots of people within the trade on the time that one thing was not proper.”
Court docket paperwork from the civil case present Lem claiming he notified RECA in April of 2023 of considerations about an agent not repaying loans at Re/Max Central, however didn’t present names or particulars. Lem additionally admitted he failed to say that there have been many complaints and that he had considerations about misconduct, fraud, deception and illegal actions.
International Information requested RECA if it acquired complaints exterior of their mandate previous to starting their investigations of Drinkwater, Lem or Hare. RECA indicated that it did obtain two complaints about Drinkwater in February 2024 however the complaints seemed to be non-public lending issues that fell exterior of its jurisdiction.
RECA additionally advised International Information that the problems regarding Drinkwater inside their jurisdiction had been delivered to its consideration in April 2024 and it acted instantly to droop Drinkwater’s licence.
Re/Max Home of Actual Property agent Jason Bamlett previously served on considered one of RECA’s 4 Business Councils, however earlier in 2025, he resigned, expressing concern with the dealing with of the Drinkwater scandal.
“Why isn’t the Actual Property Act defending us?” Bamlett asks. “(The act) has the jurisdiction. Though I don’t imagine it may have been prevented, there are actually mechanisms throughout the Act that would have mitigated damages and guarded the general public.”
“It’s only a bunch of errors upon errors,” Mitchell says. “Sadly when the sunshine is shone on it, I feel we’re going to see there must be some actual adjustments.
This month, Service Alberta is launching a assessment of RECA — one thing finished each 5 years.
“Provided that the earlier assessment was restricted in scope, a broader and extra in-depth evaluation is now wanted — particularly since no complete assessment of RECA has been carried out since its creation within the Nineties,” says Brandon Aboultaif, press secretary to Minister of Service Alberta, Dale Nally.
“We welcome this chance to evaluate how the mannequin is working and the place it may be strengthened,” a RECA spokesperson says, including a latest survey of licensees confirmed 95 per cent of respondents imagine the council is assembly its mandate.
“We’re all the time on the lookout for methods to do higher for each shoppers and the professionals we regulate.”
Till then, Davidson and different victims or claimants proceed to attend.
“You lose sleep over it, you consider the individuals it damage greater than you, the impression it’s had on my household.”
