RCMP probes allegations against Shire International

The RCMP are investigating allegations against Calgary-based Shire International Real Estate Investment Ltd.

The RCMP are investigating allegations against Calgary-based Shire International Real Estate Investment Ltd.

Sgt. Patrick Webb of the RCMP commercial crime unit said the force is trying to determine whether a crime has been committed.

"We're collecting some information from the people trying to determine if there's an offence here," said Webb.

The police involvement follows an earlier investigation of the company by the Alberta Securities Commission, which resulted in a cease-trade order against the company amid allegations of misrepresentation and fraud.

Jennifer Lofgren, one of the investors involved in a $75-million class-action civil lawsuit against the company, said she invested almost $80,000 in two different condo projects in Fort McMurray and Hawaii in 2006.

"We were a little bit concerned about how things were going because we weren't getting a lot of information," said Lofgren. "But then on June 5 we received a letter from the company and they … let us know that there was a securities commission investigation and a temporary cease-trade order against the company."

Payments 'weren't particularly regular'

"They didn't tell us why. So I called the securities commission and looked up the information on their website and found that it was for fraud and misrepresentation."

"There was an eight per cent interest payment we were supposed to be receiving and they weren't particularly regular," said Lofgren. "As well, we were to share in 50 per cent of the profits after the projects were complete."

"The projects were supposed to take two to three years in Hawaii and I believe four years in Fort McMurray. Neither one has had any significant progress."

In documenting a temporary cease-trade order against the company last June, the securities commission alleged that officers of the company and its subsidiaries Shire Asset Management Ltd., Hawaii Fund, and Maples and WhiteSands Investment Ltd. "made materially misleading or untrue statements, both to potential investors and to Commission investigators, and have engaged in an act, practice, or course of conduct relating to a security that they knew or reasonably ought to have known would perpetrate a fraud on investors."

The interim cease-trade order was extended in late June and continues.

'I strongly deny the allegations': president

In a public statement the president of Shire International, Cleone Couch, said the firm cannot comment on the class action lawsuit because the matter is before the courts.

"But I strongly deny the allegations made and advise that I am currently working with Shire's lawyers to launch a staunch defence," Couch said in the statement.

"Shire has met with the Class Action Lawsuit Legal Counsel and has been co-operative with the process."

Nothing has been proven in court.