Jeff Rabb, once considered a pillar of the Winnipeg real estate business community, is now facing criminal charges on top of allegations by the Manitoba Securities Commission he misappropriated $426,000 of funds from third-party owners of buildings his company managed.
The founder of Dorchester Developments Ltd., which became Winpark Dorchester Properties, has been charged by Winnipeg police with one count of false pretences over $5,000.
The charge stems from alleged activities dating to 2009-15, and relates to two buildings on River Avenue.
Winnipeg Police Service officials would not disclose any other information. A number of investors in buildings Rabb's company managed would not comment; some have signed non-disclosure agreements and settled disputes with the local businessman.
Police allege Rabb made a "false statement in writing" with respect to the financial condition of two River Avenue buildings "for his own benefit and the benefit of others." The buildings were owned at the time by third-party investors and held by two numbered companies.
The years coincide with the time frame the Manitoba Securities Commission investigation is focused on.
The MSC alleges during those years, approximately 50 properties managed by Winpark on behalf of third-party owners were billed $365,000 for services, supplies and products the buildings did not receive or benefit from. Instead, MSC alleges the 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.
It also alleges Rabb and a Winpark Dorchester director pocketed more than $61,000 in Manitoba Hydro Power Smart program rebate money that should have been deposited in trust accounts for the buildings where the work was done.
"Jeff liked to march to the beat of his own drum quite often... " – Avrom Charach, spokesperson for the Professional Property Managers Association
In the MSC statement of allegations, it cites instances of work being done at Rabb's girlfriend's home (at a total value of $125,620.83), a hockey rink in Rabb's backyard, and renovations at the homes of employees, who were told it was in gratitude for a job well-done. The work was then charged to the trust accounts of buildings his company managed on behalf of third-party investors, MSC says.
Chris Besko, MSC director and general counsel, would not comment specifically about the group's assistance with police in the matter, but said it is not uncommon for the two organizations to co-operate.
MSC representatives and Rabb's lawyers have been in discussions to negotiate some sort of settlement on the non-criminal allegations. Rabb's next hearing before an MSC panel is scheduled for the middle of October.
Rabb's lawyer, Evan Roitenberg, said: "I have lots to say, but nothing I am prepared to say on a matter before the court."
It is a dramatic fall from grace for a man who started out managing one duplex on Dorchester Avenue. Over over the years, he became well-known for buying up management portfolios, as well as old buildings that had seen better days, investing in them — raising rents — and sprucing-up neighbourhoods.
Rabb was widely recognized for his accomplishments. He was nominated for a prestigious entrepreneur of the year award, he sponsored charity galas, and rubbed shoulders with the city's business elite.
Now, his business is mostly wound down and/or sold off, and former colleagues in the property management business are clearly not impressed.
Curtis Shewchuk, property manager at Sussex Realty, said: "This is not good for the industry."
Avrom Charach, spokesperson for the Professional Property Managers Association, said: "Any time anyone in our industry is accused of any type of malfeasance or fraud, certainly it puts a smear on the industry."
Although Rabb's company became one of the five largest in the city, Charach said he was not heavily involved in the industry association.
"Jeff liked to march to the beat of his own drum quite often... That is about as far as I will go on the record," Charach said.
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.
Updated on Thursday, October 3, 2019 at 5:43 PM CDT: Updates layout