Calgary

Real estate fraudster jailed 90 days for ripping off clients

Derek Johnson admitted to defrauding thousands of dollars from clients in a series of real estate schemes dating back several years.

'It was devastating,' says victim of one of Derek Johnson's real estate schemes

Derek Johnson pleaded guilty to three counts of fraud over $5,000 and was sentenced last week in Winnipeg to 90 days in jail. He was also put on probation for two years. (Brady Strachan/CBC)

Derek Johnson, who has been the subject of warnings from real estate regulators and judges in Alberta for years, has admitted to defrauding former clients in a series of real estate schemes. 

Johnson pleaded guilty to three counts of fraud over $5,000 in a Winnipeg courtroom last week.

"It was devastating," said Shelli Cohen, who says she was duped out of $12,500 after putting up money as a partial down payment in what turned out to be a bogus real estate deal.

Cohen didn't want to say much about the 90-day jail sentence given to Johnson.

"Honestly, I moved on from this ordeal a long time ago. I really could not care less about his sentencing. I just hope he has learned his lesson and will not do this to anyone else," Cohen said in an email to the CBC.

It's unclear when the former Calgary resident moved to Winnipeg, but his unlicensed activities started in Alberta at least five years ago — when he raised the ire of the Real Estate Council of Alberta. The council has been doggedly pursuing Johnson for years. In 2016, it convinced a Court of Queen's Bench judge to order Johnson to cease and desist trading in real estate and dealing in mortgages. 

According to court documents, the three fraud charges stemmed from Johnson's activities in Kelowna, B.C., and Raymond, Alta. The documents list an address for Johnson in Winnipeg's Earl Grey neighbourhood.

Johnson, 48, will be allowed to serve his sentence on weekends at the Winnipeg remand centre starting Feb. 9. He was ordered to pay as many as four people a total of $15,000 in restitution and must complete 100 hours of community service.

He was also put on probation for two years.

Johnson was ordered not to have any contact or communication with Cohen and several other people, including his co-accused, Kevin Kumar.

Kumar faces similar charges in Kelowna, B.C., and is scheduled to appear in court later this year.   

There were two other conditions attached to Johnson's probation order:

  • He must not present himself as a real estate agent, realtor or any person who is licensed to sell real estate.
  • He must not communicate, solicit or negotiate with any person for the purchase or sale of real estate.

Sends a strong message 

Over the years, the Real Estate Council of Alberta has fined Johnson in excess of $100,000 for carrying on as an unlicensed real estate agent and mortgage broker in the province.

A spokesperson for the council hopes the criminal conviction and jail sentence will act as a deterrent against unlicensed real estate activities.

"We think sending someone to prison on charges of fraud sends a strong message to individuals engaged in unlicensed activity," said Bryan Douey. 

He says this case proves that investors should only work with licensed professionals.

"Consumers should always look into the person that they're dealing with and make sure they hold a licence. You should research people, consult a lawyer and make sure that the person you're working with is licensed because working with a licensed professional offers you protection as a consumer," said Douey.

Shelli Cohen says she lost $12,500 in an investment scam with Derek Johnson. Johnson, 48, was ordered to pay Cohen $6,250 in restitution after pleading guilty on Jan. 30. (LinkedIn)

Cohen, who was awarded $6,250 in restitution (half of her investment), also has advice for people considering similar investments. 

"Trust your gut. If it doesn't feel right, it probably isn't," she said.

"I think people should do their due diligence before investing in anything."

About the Author

Bryan Labby

Enterprise reporter

Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at bryan.labby@cbc.ca or on Twitter at @CBCBryan.