A former Calgary real estate agent has been charged with fraud in connection to a multi-million-dollar real estate investment scam that police allege deceived several investors over four years.
Calgary police announced on May 8, that Eric Drinkwater, 43, has been charged with one count of fraud over $5,000. Investigators say Drinkwater, a former associate broker at Re/Max Central, solicited loans disguised as real estate investment opportunities, resulting in at least 16 victims and a combined loss of more than $1.9-million.
Allegations of fraud
The scheme is believed to have occurred between March 2020 and February 2024. During this time, Drinkwater allegedly solicited numerous loans under the guise of real estate investment opportunities, assuring investors they would receive swift repayment with high interest. He also claimed the loans were secured through garnishments of his commissions from the brokerage.
Police launched an investigation after a victim came forward, reporting that payments had not been made and communication with Drinkwater had ceased. The investigation subsequently uncovered several additional victims.
Civil court case
Legal proceedings have also unfolded in civil court. On Mar. 3, Loberg Ector LLP announced it had secured a judgment against Drinkwater in a lawsuit filed by four plaintiffs.
The case centred on falsified bridge loans for non-existent real estate transactions that Drinkwater claimed were taking place through his brokerage. In reality, no such transactions existed, and the documents he provided to support the scheme were forgeries.
The court awarded $2.28-million in losses, $185,000 in interest, and $1-million in punitive damages.
“A message (had to) be sent that Ponzi schemes will not be tolerated in Alberta,” said Blair Ector, founding partner at Loberg Ector LLP, in a news release. The court also declared that Drinkwater had acted fraudulently, a move that could prevent him from discharging the debt through bankruptcy.
According to the evidence presented in court, Drinkwater admitted to the Real Estate Council of Alberta (RECA) that the number of victims may exceed 100.
RECA ruling
RECA suspended Drinkwater’s real estate licence on Jun. 18, 2024, under section 53(1)(a) of the Real Estate Act, citing the public interest. At the time of the misconduct, Drinkwater was registered with 4th Street Holdings Ltd. o/a Re/Max Real Estate (Central).
The allegations against Drinkwater include breaches of multiple sections of the Real Estate Act Rules, including participating in fraudulent activities, misleading clients, and failing to notify the regulator of judgments against him. The RECA hearing notice also alleges that “none of the funds were used for (investment) purposes. (He) used the funds to pay debts, personal expenses and in furtherance of the fraudulent scheme.”
Loberg Ector LLP noted that the Real Estate Assurance Fund, “a fund which protects the public from unscrupulous industry professionals,” may be required to intervene in this case to protect victims, in the “likely event” that Drinkwater is unable to satisfy the civil judgment.
Drinkwater is scheduled to appear in court on the criminal charge on Jun. 11. Calgary police are asking anyone who believes they may also be a victim of fraud to contact them directly or provide tips anonymously via Crime Stoppers.
Jordana is the editor of Real Estate Magazine. You can reach her by email.