Canadian and most new immigrants believe that when they are selling their house through big organization their deposit –money are save. It’s not always the case in Re/Max office ! In this letter you can learn how the franchise owner Mr. FRANK POLZLER collected money for the institutional advertisement , used them for keeping his own company . When the market decline , the brokers who bought franchise went broke ( Re/Max Nice, Renown , Supreme and others )- most the real estate salesman moved to Re/Max Professionals – it has now 5 offices and about 500 agents . So, the franchisees paid franchisor for killing their own business ! ( Penalty for this activity by Canadian law is - 5 years in prison or 10 millions Dollars fine – COMPETITION ACT C-34 par. 45!) Have a nice reading ! They do not have to do it now - they infiltrated Real Estate Council of Ontario and RECO is doing this for them under the supervision of it’s forever DIRECTOR Mr. DAVID ROSSI ! - read about it in ZNIESLAWIENIE SZEWCZYKA ( DEFAMATION OF BOHDAN SZEWCZYK)
in www.infonurt2.com KRAJ
EDMUND MURPHY
Suite 531 -5468 Dundas Street W.
Etobicoke, Ontario
M9B 6E3
December 6, 2005
By Registered Mail
PERSONAL & CONFIDENTIAL
David Linegar, Chairman, Re/Max International Inc.
Re/Max International Inc.
8390 East Crescent Parkway, Suite 600
Greenwood Village Colorado, U.S.A. 80111
Attention: David Linegar, Chairman, Re/Max International Inc.
Dear Mr. Linegar;
Re: Phony Price-Waterhouse Audits supplied by Re/Max Ontario-AC to Franchisees
Re: Letter of April 27, 2005
T am in receipt of your letter dated April 27, 2005.
You state in your letter "that Re/Max Ontario-Atlantic Canada Inc. Is an independently owned and operated business and RE/MAX Professionals, Inc. Is an independently owned and operated franchise."
Distancing yourself from the largest franchising sting operation in Ontario history is not a solution. You clearly have an obligation to reimburse the 700 real estate agents in Ontario and Co-Operating Brokers who are innocent victims of the sting operation and more importantly, to reimburse the public parties (i.e. countless purchasers and vendors) who lost all or part of their deposit monies held in trust in Re/Max Franchisee Offices who were the victims of a sting operation.
Note that the Court of Appeal ruled that Re/Max Ontario-Atlantic Canada, the Ontario Franchisor and Re/Max Professionals Inc. (The Franchisee) were the same company.
Please check with Vice-President Jesperson of Re/Max International who categorically stated that Re/Max International approved of the phony Price-Waterhouse Audits regarding the Re/Max Ontario Institutional advertising fund distributed by Re/Max Ontario-Atlantic Canada Inc. to their Franchisees and also approved of the nefarious accounting budget numbers given to the Re/Max Brokers Council, and also approved of the non-remittance by Re/Max Professionals of large amounts of ad money to the Institutional Advertising Funds, collected from their agents but never remitted. The phony audits per se were not the problem. The problem was the Franchisor used the phony audits as a vehicle to indirectly target the customers deposits and agents commissions to enrich themselves.
Re/Max Professionals pocketed the monies placing the other franchisees in circumstances of catastrophic financial disadvantage. These Re/Max Brokers had to compete on an uneven playing field with Re/Max Professionals, whose overhead was significantly reduced compared to their own due to the non-remittance of Re/Max Professionals of the huge ad fund monies collected from their agents. One has to take into consideration that these Re/Max Franchises were holding huge trust funds and these funds were put in jeopardy.
Note that I was awarded all my legal costs for my action against Re/Max Ontario-Atlantic Canada Inc.'s advertising fund. I do not require any assistance from Re/Max International to help me collect said legal fees. The dispute over the legal fees arose because Re/Max's solicitors (Weir & Foulds), were acting as a conduit for false information in Court Motions where there was no Court Reporter in attendance and then trying to make a profit for their client as a consequence of their false statements. Please refer to the Affidavit previously forwarded to you. Please note I have already waived my client-solicitor privilege with respect to said Affidavit and Re/Max International is free to cross-examine me on said Affidavit at any time.
There is also an overabundance of evidence that R/Max International approved of the cradle-to-grave contracts which were a business confidence trick allowing Re/Max Ontario to siphon off an approximate $15,000,000.00 (in all probability this number is significantly higher) from the institutional advertising fund to pay Re/Max International their portion of royalty fees, leaving Re/Max International in a position of receiving huge amounts of laundered money.
As you are well aware, Re/Max Ontario-Atlantic Canada Inc. can no longer collect any money, either royalty fees or advertising fund fees, from the Re/Max franchisees through any Court action without first doing complete independent audits of both Re/Max Promotions, Re/Max Ontario-Atlantic Canada Inc. And Re/Max Professionals Inc. (See Exhibit "3") The above also applies to Re/Max International. In all probability the Insurance Companies providing coverage for the monies deposited in trust with all Re/Max franchisees may now demand all new independent audits from the Re/Max Franchisor irregardless of time limits. See Exhibit 3 where there is clear evidence of embezzling of funds so a time limit is not a factor. Show Exhibit 3 to any Accountant and you need not accept my word regarding the embezzling of funds. There is wide-spread evidence of fraud.
Price-Waterhouse were comparing hoaxed budgeted numbers from the Re/Max Brokers Council meetings to real figures and allowing huge subsidies from the fund for events that were paid for by the agents through ticket money. Re/Max's lawyer, in a Court Motion, in the absence of a Court Reporter, claimed that the huge amount of Ticket Monies were audited by Price-Waterhouse, a claim later denied by a representative of Price-Waterhouse under oath. Many of the Re/Max Brokers who attended th Council meetings claimed that they were being intimidated.
When you wrote this letter on April 27, 2005, you were well aware that both the lawyer and his law firm for Re/Max Ontario-Atlantic Canada Inc. And Re/Max Professionals Inc. was acting as a conduit for false information (indicating that the phony audits were pre-meditated) in Motions at the Court in which no Court Reporters were present making the Law Firm a party to the nefarious actions of its client, indicating that the phony audits were very well planned and flawlessly executed. Lying was common regarding the phony audits and Polzler was a flawless practitioner of the art and an excellent teacher. I solved the problem of the Law Firm lying in Court Motions by hiring my own Court Reporter. However, unfortunately there were two tainted Court Orders at Trial and two tainted Exhibits for the Appeal Court, as a result of the law firms earlier deceptions at Court Motions.
More than half of the Re/Max Franchisees were failures. Unfortunately, in many cases customers lost all or part of their deposits which were held by the various Franchisees in trust, and approximately 700 agents also lost their commissions.
The following is a representative example of the conduct noted above. It also explains how customers lost their deposits held in trust and agents lost their commissions.
I am not generalizing from the particular.
There were countless Re/Max Franchisees put into the same position as the following broker. See exhibit p.
The sworn statement by Mr. Polzler at Discovery is a blue print for the demise of many of the Re/Max Franchisees and the lost of trust funds and agents commissions. Please refer to Exhibit
Please refer to Number 1 in Exhibit "1". Mr. Polzler, Chairman of the Board of Re/Max Ontario-Atlantic Canada Inc. sworn statement at discovery, which he was required to attend and return from his native Austria as a consequence of a Ontario Court Order.
Regarding Directive 801, referred to as Number 1 in Sworn Statement of Mr. Polzler, the Broker at Re/Max Renown , as were other Franchisees, was subject to cradle-to-the-grave con job regarding their contract. Re/Max International were using a manual of operation which did not allow the Franchisor to bilk moneys from the advertising fund to pay international royalty fees and required Re/Max Professionals to remit royalty fees and advertising fund fees they collected from their agents, similar to all other Re/Max Franchisees.
Re/Max International and Re/Max Ontario-Atlantic Canada Inc. disregarded the manual of operation and Directive 801 which meant forcing Re/Max Renown to pay huge subsidies to subsidize Re/Max Professionals Inc. who were their geographical neighbours and from whom they were under consistent intimidation forcing Re/Max Renown Inc. to be in a financial position of catastrophic disadvantage.
During litigation Polzler changed his sworn statements regarding the Contract, numerous times. Polzler's perception of a Contract he signed was it applied rigidly and unwaveringly to the opposing parties but did not apply to himself, especially when it involved remittance of monies to the advertising fund from the Franchisor's owned offices. These monies were embezzled by Polzler and his daughter Alexander. Polzler's lawyers changed the application and meaning of the Contract twice in the course of litigation, referred to at trial as an ambush. Re/Max International repeatedly changed their interpretation of the Contract.
I have lost count of the numerous times the Franchisors lawyer threatened to sue me regarding statements I made regarding the non-remittance of Advertising Fund Monies from Re/Max Professionals to the Institutional Advertising Fund. I prudently paid no attention to these idle threats.
Ironically, Ms. Alexander, under oath, stated that she had no record of ever remitting any monies she collected from the Agents of Re/Max Professionals to die Re/Max Institutional Advertising Fund.
She simply pocketed the money for her own use.
Ironically, a representative from Price-Waterhouse stated, under oath, that they had no record of any payments from Re/Max Professionals to the Re/Max Institutional Advertising Fund. Re/Max Professionals huge advertising fund monies would have been dirty money when it was held with prohibitive intent.
Mr. Polzler and Ms. Alexander insisted on adherence to requirements of the contractual arrangements regarding remittance of huge funds from all other franchisees to the Re/Max Institutional Advertising Fund, which they themselves did not comply with, placing these other franchisees, (including Re/Max Renown) holding huge trust funds, in circumstances of catastrophic disadvantage.
The above indicates again that the phony audits themselves were not the problem, only the nefarious use to which they were put, i.e. causing the demise of numerous Franchisees.
Clearly many Franchisees received disastrous legal advise, being advised to pay huge sums of money to a Franchisor who executed a pre-meditated sting operation, to their detriment.
Mr. Polzler claimed that Directive 801 did not apply in Canada because the laws were different from the U.S., however Directive 801 was an integral part of the Province of Alberta Re/Max Prospective given to the Government by Re/Max International.
Exhibit "2", Number 2 on the sworn statement: The budgeted numbers produced at Council meetings were a hoax. Many brokers claimed they were intimidated into approving those phony numbers.
Exhibit "2", Number 3: The audits provided to the Re/Max brokers Council were adjudicated by the Ontario Court of Appeal to be phony. The phony audits gave the Franchisor an extraordinary strut of power and never intended ability to force a Franchisee out of business with no regard for customers deposits held in trust, or Agents Commissions.
Exhibit "2", Number 4: on the sworn statements: Mr. Polzler stated that "every salesman, every broker, can see the minutes of the executive council, but not if that's what they want, but they're not being given one, because the minutes of the executive council is the corporate strategy of the success of this company, and as far as we're concerned it does not go out of our hands. You can look but you can't touch. You've got some minutes in there." The above statement was a total deception and a carefully orchestrated con job. Re/Max Brokers were not allowed access to yearly consecutive financial statements because the Franchisor was bilking surplus over revenue moneys for years, and not reporting it the following year. As a consequence, huge amounts of money disappeared (Indicating that the Price-Waterhouse phony audits were pre-meditated). The representative from Price-Waterhouse conceded that these monies had disappeared and they had no knowledge of their whereabouts. The Financial Statements did not appear in annual chronological order at the Appeal Court hearing either. One can only speculate if this had an impact on the three Appeal Court Judges. Without examining these Statements in yearly chronological order, it is virtually impossible to prove that monies were being bilked from the ad fund.
Exhibit ^%" indicates how the Lawyer tried to cover up the embezzlement of funds, i.e. revenues over expenses, which was used at the Court of Appeal.
This issue is explained in detail in Exhibit "3" and also explains the financial statement that the Lawyer substituted to conceal the fact that the Franchisor was bilking revenues over expenses from the Institutional Advertising Fund.
On the demise of Re/Max Renown, the Re/Max Professionals Inc. Franchise made an over night profit of $525,000.00. (Using Re/Max numbers, sworn statement by Director Pamela Alexander.) Both customers and agents lost money. Mr. Polzler, Chairman of the Board of Re/Max Ontario-Atlantic Canada Inc. fled to his native Austria, only to return to repeat the same scenario with the demise of other Franchisees over and over and over and over again. There was no remorse from either Mr. Polzler, or Ms. Alexander, on the contrary, only boastful expressions of self satisfaction and a new way to make over-night windfall profits. Re/Max Ontario enriched itself at the demise of Re/Max Franchisees. Re/Max Renown agents were unable to get any relief from the Ontario Real Estate Association (OREA) huge contingency fund as the demise of previous Re/Max franchisees had wiped out all assets in the fund. Mr. Polzler later gave the Re/Max Renown geographical grid to his daughter Ms. Alexander for no remuneration. Re/Max Renown Broker was breathtakingly naive, similar to many other Re/Max Brokers. They paid without having the benefit of an audit that had been repeatedly promised by Mr. Polzler. They unknowingly had accepted a Breach of Contract.
The Franchisees were blindsided and those who were breathtakingly naive had to answer to the regulators, and in many instances, to law enforcement agents, many of them not realizing that they were the victims of a well-planned and pre-meditated vicious franchising sting operation.
The concern has to be that many of these Re/Max Franchisees with excellent reputations and ethics will now be sullied by the phony audits and the demand for all independent audits for these Franchisees is now an imperative, if the Franchisees do not demand all new independent audits, the Insurance Companies may.
The Real Estate Franchisee who managed to overcome the Re/Max
Franchisors sting operation.
In the middle of the Trial, Price-Waterhouse produced a document that indicated that the most successful Re/Max Franchisee in Ontario took no part in the phony audits sting or had no part in the hoax counsel meeting numbers, and did not allow itself to be in a position of disadvantage. The Broker simply paid a nominal fee for royalty fund fees and advertising fund fees. This Brokers office was the safest office in Ontario for the public to place trust funds or for cooperating Brokers to collect their commissions. Prior to the Appeal, Weir and Foulds elicited this information from die exhibit. I personally advised Price-Waterhouse and Weir & Foulds that this page was missing from the Exhibit, but to no avail. Had other Franchisees follow this Brokers example, it would have left the Ontario Real Estate Regulators almost redundant. This Brokers
philosophy clearly was I am holding huge public trust funds, using phony audits to
indirectly bilk public trust funds means no pay, Franchisor trying to dupe a Franchisee with phony audits means no pay.
The above is not a theory or logical deduction. It happened to Re/Max Renown and countless Re/Max Franchisees.
The Franchisor relied on a phony Price-Waterhouse audit to collect huge amounts of money. The phony audit exposes a breach of contrct.
It is all but impossible for Re/Max Ontario-Atlantic Canada Inc. and Re/Max International to collect any further money from their Franchisees without independent audits as noted above. However, this is no consolation to the countless number of real-estate clients and their agents (Approximately 700 in number) who lost huge amounts of money, approximately $8,000,000.00. I am suggesting to you, sir, that you immediately reimburse the above innocent victims and order an immediate independent audits as stated above, to replace the phony audits and a declaration from you that your Corporation does not and will not tolerate phony audits to Franchisees holding huge amounts of public trust money.
Mr. Polzler re-invented himself and re-invented new contracts with a possible new sting operation is not a solution. Any attempt by Frank Polzler, Walter Schneider and Pamela Alexander to collect Franchise Fees in any Court Action in Ontario will leave themselves vulnerable to Criminal Fraud C, and will empail the Franchisor in impropriety. All the Franchisee has to do is produce Exhibit "3" in Court. Again, check with any Chartered Accountant. You don't have to accept my position on this issue. The phony audits allow the Franchisor to play Russian Roulette with an incredible amount of Trust Monies in Ontario.
The Re/Max Franchisees have a fiduciary duty to try and recover the money lost in Trust, including both agents commissions and customers deposits, and dearly no Re/Max Franchisee should be allowed to hold public trust funds if they use their assets to pay into a Franchising sting operation. (The Court ruled that the Institutional Advertising Fund was not a Trust fund which makes it easier for these Franchisees to place the funds they are required to remit into temporary holding accounts pending receipt of independent audits.) These Brokers now have to demand and insist that independent audits are undertaken by Re/Max Ontario-Atlantic Canada Inc., Re/Max Promotions Inc. and Re/Max Professionals Inc. in the interest of protection of public trust funds held by them (the Franchisees) in the course of carrying on business as Real Estate Brokers. Obtaining these independent audits should not be a problem on account of the evidence of fraud and unknown whereabouts of huge sums of money that disappeared as indicated by sworn statements from two Chartered Accountants including Price-Waterhouse, and a detailed statement from a third Chartered Accountant.
Mr. Polzler's repeated statements and promises that he was providing audited statements to the Franchisees allow him to disregard contracts and indirectly wield incredible power over the Re/Max franchisees huge trust funds, and permitted him to collect incredible amounts of money based on a business confidence sting.
Sir, you have permitted the Franchisor of Re/Max Ontario to piggy back on the excellent reputation and fair business practices of countless U.S. Franchisors operating outside the United States.
Sir, you have allowed the Ontario Re/Max Franchisor to piggy back on the excellent reputation of the Re/Max Ontario Franchisees and their agents while concealing a gigantic sting operation.
Mr. Linegar, allowing Mr. Polzler and Ms. Alexander at this time to re-invent themselves by re-'nventing new contracts and a new Franchisor sting operation is not a solution.
The Re/Max Franchisees have little choice now but to withhold all payments of royalties and advertising fund monies, temporarily, in a holding company pending the redoing of all audits. These Franchisees may not have a choice as the insurance companies that insure their trust funds may force the issue, and this may be a mute point as the public may decide that if the Franchisees fail to do the above, they will refuse in future to place trust funds with the Re/Max Franchisees.
Mr. Linegar, you are expected to take the appropriate action and reimburse the innocent victims for their financial losses.