The Manitoba Securities Commission has accused Winnipeg property manager Jeff Rabb and his company Winpark Dorchester Properties — at one time one of the largest in the city — with misappropriation of more than $426,000 of funds from third-party owners of buildings that the company managed.
The MSC alleges that between June 2009 and 2015, approximately 50 properties managed by Winpark on behalf of thirdparty owners were billed $365,000 for services, supplies and products that the buildings did not receive or benefit from. Instead that work was done at Rabb's residence and a number of other locations of persons related to him or otherwise in a close personal relationship with him. There was even close to $10,000 in donations that were billed to third-party owners.
It also alleges that Rabb and a "Winpark director" pocketed more than $61,000 in Manitoba Hydro Power Smart rebate money that should have been deposited in the trust accounts for the buildings where the work was done.
The MSC cites instances of work being done at Rabb's girlfriend's home — a total of $125,620.83 — and a hockey rink in Rabb's back yard and renovations at employees' homes who were told the work was being done as gratitude for a job well done. The work was then charged to the trust accounts of buildings that his company managed on behalf of third-party investors.
Among other things, the MSC alleges:
The MSC, is a quasi-judicial body that investigates and administers, among other things, the Real Estate Brokers Act, the Mortgage Brokers Act, the Securities Act and the Commodity Futures Act. It has scheduled a hearing to deal with the allegations next month.
The allegations against Rabb and his companies have not yet been proven. If it is determined the allegations are true, the MSC could bar Rabb, Winpark and his successor company, Alderman Capital, from being registered in any capacity under the Real Estate Brokers Act, pay the costs of the investigation "and other orders as the commission may deem appropriate" including a potential fine or restitution.
Winpark at one time managed as many as 2,000 apartments in the city. Rabb and his partner (who is not named in the MSC filing) were heralded as rising stars in the industry.
The detailed MSC allegations now on the public record have been rumoured about for several years and some of them were reported in the Free Press in 2015.
Avrom Charach, a spokesperson for the Professional Property Managers Association, said, "Certainly these kinds of allegations put a blemish on all property managers even if they are just allegations. I have been in the business for 25 years and this is the first time I have heard of this serious an allegation against a property manager."
"Certainly these kinds of allegations put a blemish on all property managers even if they are just allegations. I have been in the business for 25 years and this is the first time I have heard of this serious an allegation against a property manager." - Avrom Charach, a spokesperson for the Professional Property Managers Association
Jeff Rabb and his lawyer did not return phone calls from the Free Press.
Reached on the phone, Ian Rabb said, "There was no misappropriation of funds. None. And I have cheques to prove it."
Officials at the Manitoba Securities Commission did not respond to questions about the investigation citing the fact that the government of Manitoba is in an advertising/media blackout prior to the September 10 election.
A spokesman for the Winnipeg Police Service said it is aware of the allegations but would not confirm that it is engaged in its own investigation.
Dave Hill, a Winnipeg lawyer who represented investors in some of the buildings that Winpark Dorchester managed, said the investors approached him in 2015.
"They (the investors) did some investigation on their own and found what they said were improprieties," he said. "We reported it immediately to the Manitoba Securities Commission. As soon as the improprieties came to their attention we delivered a cancellation of contract to Rabb and they put a new property manager in place."
Curtis Shewchuk, vice-president of Sussex Realty, confirmed that his company took over management of eight properties at the end of 2015 into early 2016. Towers Realty acquired most of the rest of Winpark around that same time.
Jeff Rabb and his successor company, Alderman Capital, had their Real Estate Brokers Act licence suspended in July 2018 for failure to file its annual trust account report and then it expired at the beginning of this year.
In recent years, Ian Rabb helped found the Aurora Recovery Centre in Gimli, a long-term substance abuse rehabilitation centre and is now the facility's director of business development and public relations officer.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.