Property managers probed
Accused of diverting funds to pay for renovations at trio of homes
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Hey there, time traveller!
This article was published 27/02/2015 (3013 days ago), so information in it may no longer be current.
The Manitoba Securities Commission is investigating a prominent local property-management company over allegations work done at the houses of two executives was billed to a pair of large apartment buildings it used to manage.
A group of owners of 585 River Ave. and 605 River Ave. have filed documents with the MSC, alleging receipts were doctored by Winpark Dorchester Properties for work done on the personal residences of Jeff Rabb, his brother, Ian, and Jeff Rabb’s girlfriend. The receipts were changed so the work was charged to the two buildings.
Jeff Rabb is the head of Winpark Dorchester, the second-largest property manager in Winnipeg. Ian Rabb is the general manager.
Jeff Rabb is strongly disputing the allegations.
Some of the work the owners allege was done at the three residences include moving gas lines and air conditioning, pouring new sidewalks and widening driveways, installing a kitchen sink and a garburator, installing cork flooring and painting. One invoice is for a big-screen TV for 605 River. There are no big-screen televisions at 605, the owners say.
The owners allege they found charges to their buildings had the address “whited out” and changed to either 585 or 605. When the white-out was removed, the contractors who had performed the work had made it out to 36 Dearsley Place in Tuxedo, Jeff Rabb’s house, 68 Yale Ave., Ian Rabb’s house and a third house belonging to Rabb’s girlfriend.
The two apartment buildings are owned by 10 to 12 investors, with some overlap between the two. They are located near the corner of Wellington Crescent and River Avenue and have nearly 100 suites each.
The management of the two has since been moved from Winpark Dorchester to Sussex Realty Ltd. Winpark Dorchester’s corporate offices are located at 585 River.
One investor, who asked that his name not be used, said the amount of money in question is well in excess of $1 million.
The owners say when the allegations were brought to Rabb’s attention, he blamed the firm’s accounting system.
Jeff Rabb disputes the allegations of misappropriation and said not only have all errors been corrected, but the company conducted a three-year review of past invoices to ensure any other mistakes were eliminated. He said the amount in question is “much lower” than what the owners allege.
“We have met with the MSC, provided them with information and have offered to share further information should the regulator wish to conduct a review involving these two co-owned properties. As a further precaution, Winpark Dorchester also retained a national accounting firm to look at our internal review process so that we, and our co-owners, could be further assured that the review was thorough and accurate,” Jeff Rabb said in an email.
The accounting firm was also asked to make short- and long-term recommendations regarding the company’s accounting and accounts payable systems and software.
“We freely acknowledge that there were accounting errors that should not have occurred. (They) were immediately rectified once concerns came to light. Moving forward we have implemented a solid plan to strengthen (how) our systems work, under the oversight of a national accounting firm,” Jeff Rabb said.
John Bohna, an investor in both buildings, said beyond the alleged misappropriation, he’s stinging from the alleged betrayal of a businessman he considered a friend.
“I trusted these guys. I gave them many hundreds of thousands of dollars to invest in properties over 20 years. They’re big guys in town and they’re taking advantage of the investors,” he said.
A spokeswoman for the MSC declined to comment on the allegations made against Winpark Dorchester.
Updated on Friday, February 27, 2015 7:24 AM CST: Replaces photo