Suspended Winnipeg real estate broker David Joseph Douglas has been handed a $60,000 penalty and is permanently barred from being a real estate broker in a decision by the Manitoba Securities Commission.
The action follows a hearing last year into events that took place in 2012 and 2013 pertaining to transactions primarily with three homes in Winnipeg.
The MSC panel found Douglas guilty of fraud under the Real Estate Brokers Act and the Mortgage Brokers Act.
"This is serious in itself, but factors exacerbating these wrongs are evident in the deceitful and manipulative course of conduct he engaged in and the devastating financial results it brought upon innocent people who relied upon him for guidance and fair dealing," the panel wrote.
Douglas did not attend the hearing in 2015.
Douglas faces criminal charges
Lawyer Ian Histed told CBC News that Douglas would not comment on the MSC decision because he is also facing criminal charges.
Court records show Douglas faces 12 counts related to fraud, theft and forgery.
Douglas, along with his company Homelife Village Realty, had been suspended from acting as a real estate broker since March 2014.
The MSC decision means Douglas is now permanently barred from applying for registration as either a real estate broker or a mortgage broker.
The decision said the transactions looked at in the hearing involved numbered companies Douglas operated, renovation companies Naked Design Homes and OHF Construction, and Abacus Mortgage Group, which ceased to be registered as a restricted mortgage broker in 2013.
Douglas' mother, Geraldine Anne Douglas, had served as authorized official for Homelife Village Realty and Abacus, and the panel decided her suspension will continue indefinitely.
The decision said she failed to adequately supervise the companies' business and transactions.
The CBC News I-Team reported in 2013 that numerous clients were trying to recoup money from transactions with Douglas and his companies.
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One of the complainants, Angie Zubrin, said she's happy with the MSC decision.
"I think that it's been a long time coming," Zubrin said.
"I think a little bit of justice has been done but not enough. There's many, many more people like myself ... and I don't think that all the other people should be forgotten and more should be done."
The MSC panel wrote that Douglas's mistreatment of Zubrin and her husband was perhaps the "most shameful" since they "were neophytes in his world and who were manipulated into mortgaging their home to the hilt and losing their life savings as a result of their dealings with him," the panel wrote.
"This is very crucial to me," Zubrin said. "The entire time that we were dealing with David, he claimed that it was our fault that things went bad in our deal — that we defaulted because of this reason or that reason and we had to pay so much."
"And I'm glad to hear that — if he's listening to this — he is the guilty one in this matter, not us. We did our best. All we wanted to do was have this go right, and he purposefully manoeuvred his way around to fraud us. That was his intention all along," Zubrin said.
'Fraud and deceitful conduct'
In addition to the $60,000 penalty, the MSC ordered Douglas to pay hearing costs of $21,809. The maximum penalty under the Mortgage Brokers Act is $100,000.
"The panel agrees that a serious financial penalty is in order to act as a deterrent and notes the existence of fraud and deceitful conduct," the decision said.
The panel was also asked "to consider the overall dishonest and manipulative conduct of Douglas throughout his dealings with the various witnesses."
The decision noted that at one point Douglas "purported to sell and build on one property for two different buyers … at the same time and took money from each of them which was never accounted for."
Zubrin, who said she's been in contact with a number of former Douglas clients, said the episode has been a nightmare and she's learned a lot.
Money not returned
"There is still the money that is outstanding, and we have not been able to gain any of the money back. Neither us nor anyone else," she said.
"And there were quite a few other people and families that have been involved in this spider web of a complete mess. And I am hoping that everyone feels some sort of closure and some type of justification for what's been going on," said Zubrin.
The decision said Geraldine Douglas "was not implicated in any way in the dishonest conduct of [David] Douglas" and counsel for the hearing concluded "she simply was not competent to direct the business of a real estate or mortgage brokerage," the decision said.
"Geraldine Douglas was simply acting to help her son out according to his wishes without actually assuming an active role in the management," the panel wrote.
Read the Manitoba Securities Commission panel's decision below:
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