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Financial services

RECO Seeks Justice for Affected Agents and Consumers Through Court Action

Strategic Insights

— 2 min read

The Real Estate Council of Ontario (RECO) has issued a notice of application with the Ontario Superior Court of Justice to recover funds diverted from iPro Realty's consumer and commission trust accounts. RECO alleges that former principals Fedele Colucci and Rui J. Alves orchestrated a trust scheme, diverting millions of dollars from trust accounts. The regulator is seeking a freeze of assets and a court order to return the funds to the trust accounts. A significant shortfall of $10.5 million was identified in iPro's accounts prior to an inspection scheduled for late May, but was later reduced to less than $8 million after funds were repaid. The regulator publicly disclosed the issues in August, when it announced that iPro would terminate its registration and close on August 19.

Key Takeaways:

  • RECO is seeking a freeze of assets and a court order to return funds to the trust accounts.
  • The regulator alleges that former principals Fedele Colucci and Rui J. Alves orchestrated a trust scheme.
  • A significant shortfall of $10.5 million was identified in iPro's accounts, later reduced to less than $8 million.
  • The regulator publicly disclosed the issues in August, announcing that iPro would terminate its registration and close on August 19.
  • RECO CEO Brenda Buchanan stated that the regulator will "explore every available legal step to protect consumers and registrants."
  • The Ontario Provincial Police (OPP) is now investigating the matter.
  • Former iPro agents and brokers are owed a combined total of at least $250,000 in commissions and other funds.
  • RECO's board chair, Katie Steinfeld, stated that the regulator is committed to seeking justice for affected agents and consumers.

Statistics:

  • $10.5 million: the initial shortfall identified in iPro's accounts.
  • Less than $8 million: the revised shortfall after funds were repaid.
  • $2,400: the number of agents employed by iPro.
  • 17: the number of locations operated by iPro.
  • August 14: the date RECO publicly disclosed the issues with iPro.
  • August 19: the date iPro terminated its registration and closed.

Sources:

  • "RECO asserts that iPro's former principals and other parties orchestrated and executed a trust scheme involving the systematic diversion, removal and misuse of consumer deposit and agent commissions held in trust on their behalf." - Real Estate Council of Ontario (RECO), September 12.
  • "The trust scheme was a deliberate breach of the iPro respondents' fiduciary, statutory and ethical obligations, and was executed at the expense of consumers, registrants and RECO." - RECO, September 12.
  • "The Ontario Provincial Police (OPP) is now investigating." - Burlington Post, September 12.
  • "RECO has filed a notice of application to recovery consumer and registrant trust funds at iPro Realty." - Burlington Post, September 12.

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