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Regulators warn about unlicensed real estate brokers preying on vulnerable Okanagan homeowners

Described by an Alberta judge as "a scoundrel" who preys on vulnerable people, former Calgary businessman Derek Johnson says it's finally time to change careers.

Regulators say unlicensed operators may charge opportunistic fees and commissions

Derek Johnson is charged with two counts of fraud over $5,000 (Brady Strachan/CBC)

He's been described by an Alberta judge as "a scoundrel" who preys on vulnerable people, fined more than 100 thousand dollars in administrative penalties and found in civil contempt of court for refusing to stop conducting real estate deals.

Now, former Calgary businessman Derek Johnson says it's finally time to change careers.

"I have been fighting this battle for five or six years and there comes a time when you've got to put your sword and shield down and move on," Johnson said. 

"I feel frustrated, angry, confused, harassed. My name has been run through the mud. I've been followed around by agents of the Real Estate Council of Alberta. I don't feel too good about it."

This month, the Financial Institutions Commission of B.C. (FICOM), the agency that regulates real estate in the province, issued a warning about a group of unlicensed real estate and mortgage brokers that may be targeting people trying to sell their homes in the Okanagan.

"We're concerned because unlicensed real estate services providers may charge opportunistic fees and commissions and may expose consumers to other forms of misconduct," said Deputy Superintendent of Real Estate Chris Carter.

Carter said homeowners advertising their properties in Kelowna, West Kelowna, Penticton, and Coldstream have been targeted and the agency is investigating.

FICOM believes the unlicensed real estate providers have used the websites, canadapropertyguys, ispeedprivatelending, realestatecouncilofcanada, and commissionfreesystems, to promote their services.

The websites are now offline.

The agency did not name specific individuals in its consumer alert, but court documents filed by the Real Estate Council of Alberta (RECA) accuse Johnson of creating the websites listed in FICOM's consumer alert and allege he and his business associates may have used the domains to attract homeowners facing foreclosure under fraudulent pretenses. 

Johnson denied owning the web domains and only admitted to using one of the websites for business purposes.

Preying on homeowners

RECA has been investigating Johnson and his associates for the past three years, according to communications manager Natalie Scollard.

"We have said explicitly that these individuals are preying on home owners who are in vulnerable financial positions and /or facing foreclosure," said Scollard.

"We have certainly heard complaints from consumers and we have issued more than $100,000 of administrative penalties against Derek Johnson for unlicensed activities."

In 2013 a Calgary man claimed he was swindled out of his own property by Johnson. He spent tens of thousands of dollars in legal fees to get his land title back

No longer working in real estate

Johnson disputes the claims made against him by the regulators and maintains the agencies don't have the authority to regulate the kind of business dealings he was involved in.

He plans to argue this before an Alberta judge in a court hearing next month.

"I was simply buying and selling homes from private sellers, nothing more," said Johnson.

Johnson said he feels targeted by FICOM's consumer alert and believes it's misleading the public.

"If they are going to refer to me, by tying me into those websites — I am not an operator, I am not licensed. I am a buyer and a seller, which is a whole different thing," he said.

According to Johnson the regulator in Alberta is now going after him in B.C. through FICOM.

He said this has forced him to stop working in real estate.

"I've sadly had to switch industries as a result of all the harassment, the intimidation, the constant paperwork and the accusations, not to mention the constant media reports," he said.

"It just made it impossible to function in this type of industry. I've had no choice but to move into a different industry, completely unrelated to real estate,"

Johnson told CBC News he is now focused on preparing for his June court hearing where he plans on challenging the contempt of court order.

RECA will seek the maximum penalty against Johnson, which could mean up to two years in jail, according to Scollard.

FICOM said their warning still stands.

"We believe there is still a significant risk that some of the activities identified in the consumer alert may still be going on," said Carter

He advises homeowners to research anyone offering real estate or mortgage broker services and check to see if they are licensed with the Real Estate Council of British Columbia.

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