Thursday, June 18, 2009

Concrete Equities? Not so great after all...( and how I dodged that bullet!)


Is that not a nasty, nasty picture and sign? It is pretty powerful stuff...
In the spring of 2008, flush with some extra cash from a better than average work year, I started looking at some alternatives for my RRSP. Now, I had been investing in mutual funds since I was 20, but thought it was time to branch out a little bit more. Knowing that I needed to put the money away (for tax reasons mostly, as I have 25+ years until retirement) it was just a matter of WHERE/WHAT I was going to do with it.
After a bit of research, I started looking at these private real estate investment plays. I looked at Platinum Equities, Genesis Land Development, FRPL ( Fairmount) and a Concrete Equities. Most of them were not really my thing, but I was intrigued by Concrete Equities. After all, I had heard their daily radio and TV ads. Also, they are the main sponsor on CBC's Dragons Den ( A favorite of mine) so I thought I would meet with one of their reps to see what they had to say.
The meeting was average at best and the rep ( who was a VP) did not seem to like all of my questions. I think he was insulted that I actually knew what I was talking about, which was my 1st clue to get the heck out of there.
The whole Concrete Equities plan is ridiculous in my opinion... In a nutshell it works like this:
  • Concrete buys a building for say $10MM ( Market value is $10MM)
  • Concrete buys TV/Radio Ads and becomes a big corporate sponsor, in an effort to LEGITIMIZE their company.
  • Concrete sells partnership units, in $10,000 increments to hundreds/thousands of "investors"/marks.
  • Concrete Promises 75-94% returns in 5 years (varies per property), by re-mortgaging the $10MM property (say at $13MM) and handing out the refinanced funds.
  • Bottom Line...they use your money to pay the mortgage in the meantime.

Some further research showed me that one of the senior partners had some problems with an Alberta Real Estate licensing board. The biggest turn off for me was when I found out that the CEO of this company was Dave Jones. Now I have been hearing Dave Jones WealthStreet Wealth Watch reports for a few years on QR77 ( which is an advertisement, pretending to be the news.) and everytime I hear him, I puke a little in my throat.

Dave Jones's wealth must rival that of Warren Buffet's, because he always seems to have picked the winning stocks for the day. ( After the market closes of course...) Perhaps he borrowed Doc's DeLorean and brought back some stock reports? Its all smoke and mirrors. This Jones chap is not a stockbroker, he is an "alternative" investment dealer. ( Ie. Not Stocks, Not Bonds, Not Mutual Funds...perhaps a ATM syndicate or in pop bottle empties?) Lately, it appears Dave's biggest job as CEO was to push the Concrete Equity property syndications.

Well, it looks like the house of cards has fallen. Concrete Equities has been in the news as of late as some of their partners are feeling duped!
If you want a really interesting take on all of this, from an Inside shareholder, check out the link here. Pretty excellent blogging on this matter!
Now, although I appear bitter at Concrete/Jones, I am NOT an INVESTOR...thankfully. I had reviewed all of their info/contracts and talked to my Father-in-law, who is the Buffet in my family about what I should do? He told me to stay away from these things and set up a Self Directed Stock account, which I did. Maybe the stock market had fallen and some investments are down 25%, but I tell you... its better than losing $10-20k with Concrete (crumbling) Equities!
Thanks Pops! I owe you a beer....
Update- 8/13/09- Follow up post located here.

39 comments:

  1. I remember turning to my wife after seeing a commercial about a year ago, when Concrete started advertising and partnering with Dragon's Den on CBC, and saying "Doesn't that look like a scam? Those people don't look trustworthy. I'd be afraid they'd go spend my money on fancy suits and interior decoration." (All the commercials were filled with this kind of set dec.)

    I feel bad for the people that were duped, and I too am glad I listened to my gut. All my best to the people trying to get answers. It's a shame it had to come to this.

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  2. Good Post. You are one of the few people who understand the problems.
    Too many people could have avoided the problems by doing a quick google. I further analyzed the Offering Memorandums and found more problems. Personally I feel if you can't understand documents like this you shouldn't be investing in private placements.

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  3. Vince DePalma has some bad history in Prince George.

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  4. As of August 31, 2009, Concrete Equities is no longer in business.

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  5. Is it true that the Concrete Equities had created 44 companies and 72 bank accounts to manage the Limited Partnerships? If this is not intentional preparation for fraud to scatter and hide money then what is?

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  6. Love to see those who say " Oh you should have known better", or "Looked to good to be true", I really wish we all had your God given intuition! It's really easy to sit on the fence now and crow those words, but I guess the other 4,000 families that are affected just by Concrete alone must simply not as wise as yourself. Do us all a favor and walk away, go lead the masses with your insight to life. Yes I was one of those who signed with Concrete, I didn't understand all of it and you know what, I would love to meet you and ask you directly if you read the contract page by page you are clearly very self absorbed.
    If you choose to reply to this I will gladly give you my contact information and we can chat about your pompous attitude as well!

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  7. Hi Anon 6:43...I guess you are a little testy this holiday season. I am sorry that you feel this way, but please do not direct your anger at me. Feel free to direct it at yourself! I did not indend for this post to offend, but rather to it was intended to show my PERSONAL experience. I am sorry you lost your money, but yes...I did read the fine print. And YES....i met with the reps at their office and asked tons of questions. I am sorry that your may have been blinded by greed, but as the saying goes.." a fool and his money...".

    Feel free to email me at the email address on the about me section if you want to chat.

    Happy Thanksgiving!

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  8. Well said Shane. That post was un-called for. I know people that gave that guy money too. I said to them, be carefull. 1)Smart money never needs to advertise 2) Beware when a company asking for money is suddenly giving it away. (ala Dragon's Den).
    Those people thought I was old and stodgy and I'm only 44! Others took my advice and thanked me after.

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  9. Ads for investments in the USA are required to include the disclaimer: "past performance is no indicator of future success"
    Perhaps if we had such a law in Canada, fewer people would have ended up being bilked by the ads for Concrete Equities which claimed exactly that.

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  10. I used to work on the same floor as the first Concrete Equities office. The guys all drove Porsches and were decked out in flashy gold jewellery and expensive clothes. I remember thinking "for a brand new company they seem to be doing pretty good. Either they really know the market or they're con artists."

    Guess I know now.

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  11. Re Anon November 1, 2009 1:36am.

    Yes, we have those disclosure laws in Canada.

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  12. Every time I heard oleaginous Dave Jones' carnival huckster shout out on the radio the B.S buzzer went off and as a previous poster said a little bile started to rise in my craw. I feel for those who were dinged in this racket. Like my old Dad used to say (an oil and gas economist who made his retiremnt living
    on the stock market) If it is such a good deal Son why isn't it standard operating procedure? let that be a lesson to people that the good deals are usually gone by the time the shills start asking for your money to "share in the wealth." Guys like this will be back with the next greatest thing since sliced bread. Beware !

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  13. Does anyone know where Dave Jones is thses days?

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  14. starting a new company doing the same thing as wealth street "country club inc"

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  15. It would appear Fairmont Resort Properties or FRPL has filed for bankrupcy and is under the courts protection. Just another Concrete Equities scheme that was destined to fail and the unprotected public investor loses all their investment

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  16. where is this new company "Country Club Inc" incorporated?

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  17. Wealthstreet Inc. filed for bankruptcy on April 6, 2010.
    http://www.alger.ca/wealthstreet/index.html

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  18. Does anyone know if Platinum Equities falls into the same category? They are still going strong despite the economic climate

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  19. In fact Platinum Equities is having some problems and asking their partners in at least one of the LLP's to fork over more cash to keep it going...
    --Concerned Platinum Investor

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  20. Hi there, just tuning in to Concrete Equities stuff on your blog. I have invested (Vancouver office) in the Sunpark/Pemberton property with Platinum Equities. We have missed 3 of the 4 quarterly distributions for 2009 & still waiting for Q1 2010. Are these guys in the same boat? I am trying to find out where to look or call to see if others are having the same issues. I am hoping to hang in until 2011 when they are supposed to sell these properties. My wife is worried we have been scammed??

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  21. Oh. My. God. I was with Wealthstreet for a VERY short time about 4-5 years ago, and I got out ASAP because of the uneasy feeling I got from Dave Jones. Shortly before I left, he and his wife went to Hawaii and left all the investor's accounts in the hands of...his receptionist. At tax time. Yeah. When I told one of my friends about my uneasiness and how I didn't trust him at all, she exclaimed, "But he's Christian!" (to which my skeptical li'l self was all like "so-freakin'-what???"). Anyway, I didn't know he had a show/ad on QR77, but I knew he had one on Shine FM. I don't know how I knew that 'cause I don't listen to it.

    Anyway, I had heard the radio ads for Concrete Equities and had some money to invest, so I considered it, but I didn't look into it. I'm glad I didn't do it! If I had heard that Dave Jones had anything to do with it I would have known for absolute sure that it was not something to be touched with a ten-foot pole. Your blog is the first I heard of it, though.

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  22. Because of the economic downturn, many people are suffering. I have investment with Platinum Equities in Sunpark/Pemberton property. So far I have missed 5 quarterly distributions. Just wondering what they are up to and still a BBB A+.

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  23. We also have investment with Platinum Equities and so far they are behind 4 quarter distribution payments and it doesn't look good for the future. They are still in business and no matter how many trips to calgary and letters and e-mails requesting our funds, they continually give us a rosy picture that all is well and because they have foreclosed on a property, the lawyers,etc have to be paid first.

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  24. Platinum does not appear to be in good shape and will not return calls. They have a few properties up for sale in what look like an possible attempt to liquidate.

    Anyone have any further info on what is happening

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  25. Any thoughts on Signature Capital....Surpised they have not been mentioned in these comments...

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  26. As an investor in this LP, I believe that the situation with Platinum and it's Sunpark/Pemberton LP is much more of a issue about vacancy for commercial space that it is management at Platinum. The Pemberton building is doing much better than Sunpark with regards to vacancy, and the rates of vacancy for Class B space are much higher in Calgary. These are unpleasant times for building owners in weak markets, so LP owners in this situation are exposed to the same reality.

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  27. I am also a Platinum investor who is in contact with other Platinum investors who are also concerned about the present situation. Like many of you, we are seeking to find as many other Platinum investors as possible in an attempt to discuss the situation and possible strategies for the future. If you would like to contact us you can contact us directly at ipartner48@gmail.com.

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  28. I invested in the Dominion Place project with Platinum Equities. They have also missed the last 4 quarterly payments and their CFO didn't file the tax papers and had their accounts suppended by the CRA. Last quarter, they sent an ominous letter to investors that the market is bad and they can get out at their original cost ... fortunately, we have a pending offer with a 57% ROI over 5 years. Platinum also has a lawsuit from their LP members at Dominion Place. Platinum is hard too trust since the leadership team is ex-Concrete Equities staffers and is probably as corrupt as Concrete Equities!

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  29. Another company this is in trouble is Lucid Group of Companies in Caglary. They have stopped paying their investors as of Jan 2011 and the writing is on the wall. Like so many other investments in Calgary, this is how is starts, first raising cash from investors, then not completing projects as were advertised, firt the monthly payments stop, then the house of cards comes tumbling down, because the Ponzi scheme can"t raise anymore money from investors.

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  30. I agree, what Lucid Group of Companies is doing is fraudulent and they should be prosecuted to the full extent of the law. I sure would like to see a investors law suit against the Fort McMurray Project!!!

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  31. This Lucid Group of companies is an extreme
    example of fraudulent behavior. An investor Law suit against Fort McMurray project.. is great ,anyone know how to get our $$ back.

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  32. I would say, make a Fraud report with the Calgary Police and contact the media. This Lucid group of companies is very shady and will not return calls or emails. They have a fail rating with BBB and Canadian Securities commission is investigating them.

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  33. Lucid Investors need to get together and force the goverment to shut them down and pay all monies owing. I am more than willing to meet with others to work on this...........post here and lets stop talking and take some action!!!!

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  34. Some info on Lucid Capital Barlow in. Just Google--they are in bankruptcy the above name.
    Oct 4, 2011.

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  35. Lucid Capital Barlow is in Bankruptcy.Date Oct.4 2011. Other Lucid groups not mentioned as yet. ( 9 million they owe investors just from this one group. Just Google the above name.

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  36. Oh my ,this is very disturbing. I knew something was wrong--no phone calls for months. My principle gone. Wow were we all just greedy chomps or are they thieves.

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  37. The Province of Alberta, by virtue of its lack of regulation in real estate investment, is the Ponzi Scheme capital of all North America.

    I got suckered by Arcus Developments, same scam, different players.

    No one ever goes to jail because what the do is legal here

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  38. Why not take the Lucif Group of Companies to the CTV news? Why are we sitting here like we crapped pants letting people take over our money, do u realize that the Ramsey Project was sold for less that bought, someone should sue the company that bought it or sue the judge for poor business act.

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