Pat Hare, owner of the Calgary brokerage that employed Ponzi schemer Eric Drinkwater, not only failed to report the illegal activity, but also advised the fraudster against coming forth himself, a judge has ruled.~
In a decision of the Court of King’s Bench of Alberta dated April 24, Justice Barbara Romaine found Hare, a Realtor of more than 40-years, knew about the multi-million-dollar scheme as far back as 2022.
Last week, Re/Max announced it cut ties with Hare’s brokerage Re/Max Central amid the Ponzi scheme controversy.
Hare is the uncle of Drinkwater, who is charged with $1.9-million in alleged fraud.
Already, $2.28-million in losses, $185,000 in interest, and $1-million in punitive damages has been awarded to four victims in a civil suit.
Drinkwater’s criminal trial is set to begin this month.
Email exchange
The decision includes details of several email exchanges between Drinkwater and Hare, including one where Drinkwater states that he will call the Real Estate Council of Alberta, the industry regulator.
In response, Hare said: “you do not have to call reca unless you go bankrupt [sic]. What are you going to do tell them that you stole other people’s money or put them on a Ponzi scheme [sic].”
Ultimately, no one reported Drinkwater to RECA, reads the decision.
“Despite knowing of the scheme, Mr. Hare did not report Mr. Drinkwater’s conduct to the RECA, and in fact, advised Mr. Drinkwater against reporting himself,” says the decision.
“Mr. Hare enabled Mr. Drinkwater to continue the scheme, and he himself received regular payments from (Drinkwater’s company) during the period that Mr. Drinkwater was continuing with the scheme.”
Managing broker also aware of Drinkwater’s activities
According to the decision, in Dec. 2021, Re/Max Central broker/manager David Lem became aware that Drinkwater was borrowing money from individuals and not paying it back.
Lem said he reported this to Hare between Dec. 2021 and Jan. 2022.
They met with and negotiated a release with a complainant on behalf of Drinkwater and RE/MAX Central, reads the decision.
In August 2022, more of the scheme came to light, and in early 2023, the “floodgates opened,” reads the decision, and several more complaints related to the scheme were received.
In March, 2023, Lem said that he, Hare and Drinkwater met to discuss Drinkwater’s conduct. At this point a deliberate decision was made not to report Drinkwater to RECA, reads the decision.
Days later, Lem sent an email to Drinkwater and Hare stating, “In short, we’ll make every effort to diffuse any situation that comes to our attention that you make us aware of and we will leave it to an internal matter at this time,” reads the decision. “However, I will be bound by RECA’s requirement to report any further instances we have not be made aware of in advance. Thank you.”
Lem told the courts that one of the reasons that he did not make a report to RECA was because he thought Hare was going to fix the issue, given the personal relationship between him and Drinkwater.
Judge freezes assets
Judge Romaine’s decision orders a Mareva injunction, a temporary order that effectively freezes an asset pending a future order, which was sought by four of Drinkwater’s victims.
The victims submitted that a Calgary home was fraudulently transferred from Drinkwater to Hare.
Romaine found that Drinkwater transferred money to Hare during the period of the scheme, and the money was used to pay the mortgage on the home, to Hare’s benefit.
While there is insufficient evidence to support that claim, Romaine wrote, there is evidence that Hare has been making attempts to sell the property despite his knowledge of the claims involving the property.
The order temporarily prevents any transactions relating to the home.
Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.