Montreal telemarketers once accused in $60M 'scams' helped launch Exit Realty on the Rock

Three brothers from Montreal whom a federal law enforcement agency believed to be responsible for a $60-million deceptive telemarketing operation were the founding directors of Exit Realty on the Rock.

According to public records, Exit Realty on the Rock's initial business address was listed on the same floor of the same downtown St. John's building as a controversial call centre run by the Frank brothers.

A month after the real estate company incorporated at that address in November 2004, the call centre there was raided. A couple of weeks before that happened, Exit Realty on the Rock opened an office on Freshwater Road, which was listed as the new business location in subsequent corporate filings.

One of those three telemarketers actually signed Exit Realty on the Rock's first licence application to sell real estate in Newfoundland and Labrador back in 2004, according to documents obtained by CBC News through access to information.

Months later, all three would leave their roles as directors of the company, and be retroactively replaced by Anne Squires, effective the day after incorporation.

Squires has been the public face of Exit Realty on the Rock since its inception more than a decade ago from its small beginnings to its rapid growth to its sudden collapse this month into a licence suspension, receivership and a police investigation.

But public records show that in the very early days, there were others behind the scenes who helped get the company off the ground.

It's unclear how much support was provided, or why.

And there is no indication that the brothers from Montreal are still involved with Exit Realty on the Rock today, although there is a paper trail linking one of them to Squires in other business and real estate endeavours here over the years.

While the Frank brothers would be charged with deceptive telemarketing in 2010, a series of court delays led a Quebec judge to stay the charges more than three years later. The case never went to trial.

CBC News reached out to the Frank brothers and Squires, but have not had any of those messages returned.

Real estate agent licence application

The story began on Nov. 1, 2004, when paperwork was filed at the registry of companies to incorporate 50549 Newfoundland and Labrador Inc.

That numbered company is the official corporate entity that trades under the name Exit Realty on the Rock.

The three directors listed for 50549 Newfoundland and Labrador in that initial filing were Shawn Frank, Gordon Frank and Ted Frank.

The Franks were all listed at the same address in Montreal an address tied to a number of telemarketing operations.

Exit Realty on the Rock's first business address was on the second floor of 152 Water St. in St. John's where the Infotel call centre was also located.

Later that month, 50549 Newfoundland and Labrador submitted its application for a real estate licence.

Anne Squires was listed as contact person and designated representative. Shawn Frank signed the certification section for the licence application on Nov. 9, 2004.

The province issued the licence, effective Nov. 15, 2004.

Exit Realty on the Rock was in business.

Controversial call centre

Shawn Frank and his brothers Ted and Gordon had another business operating in St. John's at the time.

Infotel Directories had fallen under the harsh glare of the media spotlight years earlier.

In 2002, a series of critical media reports raised questions about a government-supported telemarketing operation in the city.

The year before, Infotel Directories had set up shop in St. John's, after receiving pledges of federal job grants and provincial tax breaks. Infotel ultimately got more than $200,000 from Ottawa for establishing its Newfoundland operation.

The St. John's call centre telemarketed business directories to the United States and United Kingdom.

But newspaper stories in 2002 revealed that the company was under the microscope of consumer-protection agencies in three countries, after hundreds of complaints had rolled in about its business practices.

Non-profit groups and businesses claimed they were billed forlistingsthey never ordered, or that telemarketers asked them to renew directory listings that did not actually previously exist.

The federal Competition Bureau launched an investigation that year a probe that burst into the spotlight in late 2004, when police officers helped federal agents execute a search warrant at Infotel's call centre in downtown St. John's.

The St. John's telemarketing operation changed its name and changed directors shortly after, before shutting down in 2006.

Search warrant executed Dec. 1, 2004

The Infotel search warrant was executed on Dec. 1, 2004.

Six months later,Squires filed paperwork at the registry of companies listing her as the sole director of Exit Realty on the Rock, and dropping all three Frank brothers.

Those changes were listed as effective on Nov. 2, 2004 all the way back to the day after the company was incorporated, and before Shawn Frank signed Exit Realty on the Rock's application for a real-estate licence.

Other business connections since 2004

It's unclear what role, if any, Shawn Frank played directly in Exit Realty on the Rock after incorporating the company, signing its real estate licence application in 2004, and then being unlisted as a director.

Under Newfoundland and Labrador law, companies must publicly disclose the identity of directors, but not the owners.

But there is no evidence he has any involvement today.

However, public records show that Squires has had a number of other business relationships with him or his family in the years since then.

Anne Squires and Shawn Frank are the only two listed directors for a separate numbered company that incorporated in April 2005. That company 51477 Newfoundland and Labrador Inc. dissolved in 2011.

Shawn Frank sold two houses in the Southlands area of St. John's between 2010 and 2012, according to conveyances on file at the registry of deeds. Online listings show that Squires was the real estate agent for both sales.

Under a year ago, in March 2015, Shawn Frank's wife Elisa Fremeth joined Squires as the only two directors of another numbered company, 71353 Newfoundland and Labrador Inc. That company is listed, along with Squires personally, as debtor to BMW Canada for six Mini-Cooper cars.

According to public records, Shawn Frank is listed as director for a separate numbered company that owns a piece of land in the east end of St. John's a property that still features a prominent "for sale" sign with Anne Squires as the listing agent.

Shawn Frank is also listed as director for another company that owns a strip mall in Paradise. As of late last week, there was still an Anne Squires "for rent" sign in the window of an empty storefront there.

Frank also attended a black-tie Exit Realty on the Rock fundraiser in 2008 for Daffodil House. His photo was published at the time in an edition of the good news publication called Snap! St. John's.

Charges filed for 'business directory scams'

Years went by before the Competition Bureau laid charges against the Infotel call centres.

In 2010 nearly eight years after the investigation began charges were filed against Shawn Frank, Gordon Frank and Ted Frank, along with a half dozen companies under the Infotel umbrella.

The Competition Bureau accused the Frank brothers of "deceptive telemarketing activities related to business directory scams" resulting in estimated revenues of $60 million between 1999 and 2004.

• Directors of Infotel Charged With Deceptive Telemarketing

According to the Competition Bureau, the company had operated call centres in Montreal, Toronto and St. John's.

Trial proceedings were delayed most significantly when the presiding judge was promoted to another court, something that pushed the planned start of the trial to September 2014.

The Frank brothers filed an application to have the charges stayed, arguing that their Charter rights guaranteeing them to a trial in a reasonable length of time had been infringed.

The charges areserious.Of course there is a societal interest in having them tried on their merits but the prejudice shownoutweighs this societal interest.- Quebec Court Judge JulieRiendeau

In September 2013, Quebec Court Judge Julie Riendeau ruled in their favour.

"The applicants are facing imprisonment, which the Crown had undertaken to demand if they were to be found guilty," Riendeau wrote in her decision, noting that the maximum sentence was five years.

"They testified on the ongoing stress, paranoia and anxiety, as a result of the pending accusations. They testified about damage to their reputation, losing friends, losing customers, difficulties to keep and find business partners and business difficulties. They also reported limits on business expansion because of the uncertainty of the future."

Riendeau added that none of them had a criminal record.

"The charges are serious," Riendeau wrote in her decision. "Of course there is a societal interest in having them tried on their merits but the prejudice shown outweighs this societal interest. The progress of this case was and is delayed to such a degree that the applicants' constitutional right to be tried within a reasonable time will be violated if the trial is held in September 2014, as scheduled."

The charges were stayed, more than 11 years after the Competition Bureau investigation began.

Status of investigation unknown

Earlier this month, the provincial government announced the suspension of Exit Realty on the Rock's licence.

• Exit Realty on the Rock's licence suspended

Last week, the Royal Newfoundland Constabulary executed a search warrant at the company's Kenmount Road office, as part of an investigation into allegations of theft, fraud and breach of trust against Squires.

Police made a series of allegations in a document called an information to obtain a search warrant, or ITO.

• Anne Squires under RNC investigation for theft, fraud and breach of trust

The contents of the ITO have not been proven in court, and Squires is not facing any charges.

On Monday, the RNC confirmed that the investigation is ongoing, but there is no further information at this time.

Messages not returned

Squires has not spoken publicly since Feb. 6 two days after the licence suspension was announced, but before the police searched the company's office.

At that time, sheread a prepared statement to reporters disputing the suggestion that the company was bankrupt, and lauding her employees for their service.

"The damage that has been done to my agents who have supported me for more than a decade, and who have provided incredible realtor services to this community, not to mention over $1 million in donations to charitable organizations in this province ... is unsurmountable," Squires said at the time.

Squires did not take media questions that day, and has not responded to CBC News messages since then including emails last week about the founding of the company.

The Franks have also not responded tophone and emailmessages leftat their Montreal-area businesses.

One of those businesses that Shawn Frank and his wife now appear to be involved in, according to the company's website, is a Montreal-based debt consolidation business that helps people with financial challenges.