A client of David Douglas says doing business with the former Winnipeg mortgage broker was the worst decision he ever made — one that he says ended when he lost his house and thousands of dollars with it.

Contact the I-Team

If you have a tip for the CBC News I-Team, please call our confidential tip line at (204) 788-3744 or email iteam@cbc.ca

About 3½ years ago, Steve Gagnon moved back from British Columbia to his home province of Manitoba to take a job as a dry-waller with OHF Construction, a renovation company operated by Douglas.

Gagnon said he liked working for Douglas at first and was treated well. But by the time he quit his job and ended his business dealings with Douglas, his opinion had changed completely.

“My heart goes out to all the people that he’s hurt. I wish I could have done something, but I couldn’t and I hope your lives will get better,” Gagnon said in an interview with the CBC News I-Team.

As CBC News reported on Tuesday, complaints about Douglas are currently under investigation by the RCMP and by the Manitoba Securities Commission, which regulates real estate brokers and mortgage brokers.

After Gagnon had worked for Douglas for about a year, he asked Douglas — who also operated a real estate company — for help in finding a home to buy in Winnipeg.

“He said, ‘Maybe you didn’t realize that I also own a financing company … and because you work for me, you’re guaranteed. I know you’ve got the money because I pay you. I can get you a home right away,’” Gagnon said of his discussion with Douglas.

Gagnon said an associate of Douglas started showing homes to him and his wife. They decided to buy a house on Queen Street in the city’s St. James neighbourhood.

When it came time for the financing, Gagnon said Douglas referred him to a lawyer.

“So we did all the paperwork up, we got the house…. We were all excited. We moved in,” Gagnon said.

Defaulted on mortgage

Not long afterwards, there was a problem. Gagnon said his paycheques from employment with OHF Construction didn’t come prior to the first day of the month, when the mortgage payment was due.

David Douglas

Complaints about David Douglas, shown in this 2012 newspaper advertisement for one of his investment seminars, are currently under investigation by the RCMP and by the Manitoba Securities Commission.

“I’d come home from work and there is a notice of default taped to the door. So I take it down, read it. I've defaulted on my mortgage. I have three days to come up with the money or vacate the premises,” Gagnon said.

He said he made the payment and subsequently always made sure the money for his payment was available on the first day of the month.

Months went by until around December 2011, when his employer — Douglas’s company — was late with his paycheque. 

Gagnon said he was once again hit with a default notice on the door of the house. 

Gagnon said when he asked for an explanation, Douglas told him that “he owns other companies and it’s not his problem that one of the other companies has to collect on a certain date than the other company has been paying. ‘That’s not my responsibility to look after that. That's your responsibility.’”

“So the wife is crying, I’m telling her I don’t know what to do…. I think we’ve lost our home,” Gagnon said.

He said at that point, he quit his job with OHF Construction and moved out of the house he had financed through Douglas’s company.

Gagnon said it’s difficult to describe how he felt at that point.

“Hurt, betrayed, leery, scared. I’d moved my wife all the way down here from B.C., given her a home, and I've got to go home tonight and tell her that we've got to start thinking of other options," said Gagnon.

"We’ve lost our home. I know he's going to take it now and he'll do whatever it takes to take this house."

‘How is this ethical?’

“Shame on you,” he said of Douglas. “How is this ethical? It’s just not right.”

CBC News has been unable to speak to Douglas despite repeated attempts.

Douglas also ran a company called Naked Design Homes, which offered prepackaged “wealth building opportunities” for clients wanting to get into fixing and selling homes for profit. 

CBC News has learned that several properties Douglas sold as part of his house-flipping business once belonged to clients who had defaulted on loan agreements and were evicted. 

Douglas previously made news in Winnipeg in 1991 as a landlord, when he was sentenced to 30 days in jail for breaches of the Public Health Act.

The sentencing judge noted that it was one of the first times a landlord had received a jail sentence arising from rental properties being in a substandard condition.

The judge said Douglas was “probably one of the worst offenders.”

Douglas appealed the sentence, but that appeal was dismissed.