Former B.C. Cop Investigated For Investment Fraud
A former Abbotsford police officer is under investigation after a Surrey real estate development collapsed, leaving 28 investors with total losses of more than $6 million.
The Hilands was supposed to be an 88-unit townhouse complex in Surrey's Sullivan Heights neighbourhood, but another development now sits on the site after the land was bought by another developer when The Hilands project collapsed.
Ava Carlyle, 61, lost $750,000 — more than any other investor — after she sunk money into the scheme that she had set aside for retirement.
Carlyle bought three units at $250,000 each — one for herself, one for her 90-year-old mother and one to rent out.
She told CBC News everything seemed to be on track, as plans were drawn up and city permits obtained.
"It seemed like a very safe, reliable development project," Carlyle told reporter Eric Rankin.
But when the project eventually collapsed, Carlyle was left facing an uncertain financial future.
"It's totally devastated any plans that I had. I'm in a state of limbo," Carlyle said. "I had to sell the family home, my mother's home, and I'm renting right now."
Trusted Abbotsford police officer
Carlyle and the other investors say they trusted Jaspal (Paul) Lalli, an Abbotsford police officer close to retirement, when he started raising money in 2005 under his company, LalliCo.
Five of the investors were fellow Abbotsford police officers, two were Mounties and the rest were mainly Lalli's friends and family.
The investors were all brought in by invitation only, on the promise that they would get their initial investments back plus 10 per cent interest if The Hilands wasn't built.
But when the project was delayed to 2007 and then 2009, some investors realized something was wrong.
"The alarm bells were that as months rolled by, there were lame excuses why they weren't cutting ground," Carlyle said.
The RCMP's commercial crime squad has been called in to investigate.
According to an application for an order to see if there was any evidence that might support a criminal case, RCMP investigators state there are "reasonable grounds to believe that ... Jaspal Lalli ... did by deceit, falsehood or other fraudulent means, defraud [the investors]."
The documents go on to say, "Lalli and Gopal Gill continued to encumber The Hilands in a complicated web of collateralization, thus placing all investors funds at risk. Lalli ... misled investors ... providing [them] with a false sense of security."
According to the documents, what Carlyle and many other investors didn't know was that Lalli had a silent partner —his cousin Gopal Gill — who had taken out $1.5 million in mortgages on The Hilands property.
In addition, the Hilands was also being used as collateral to finance other developments.
But when those other projects collapsed and the loans were called in, lenders also foreclosed on The Hilands and investors were left with nothing.
"I truly thought this was real and solid," Carlyle said. "But in hindsight, it was just a set of plans."
Defendants deny wrongdoing
The allegations have not been proven in court and no charges have been laid, and neither Lalli nor Gill responded to interview requests from CBC News.
But in statements of defence filed in resulting civil lawsuits, both Lalli and Gill deny wrongdoing.
Lalli claims the investors had no legal right to the land and the plaintiffs are not legally entitled to the return of their money.
Some of the investors also say Lalli insists he is still trying to get their money back.
The RCMP's commercial crime investigation is nearly complete. It will then be up to Crown prosecutors to decide if criminal charges should be laid.
For her part, Carlyle believes there has to be better regulatory oversight.
"You hand over money with seemingly solid contracts — it could happen to anyone," she said.