Ontario’s real estate regulator filed court papers Thursday seeking to recover consumer deposits and agent commissions allegedly stolen by former executives at iPro Realty in what officials described as a systematic scheme to misuse trust funds.
The Real Estate Council of Ontario asked the Ontario Superior Court of Justice to freeze assets and trace money that was allegedly diverted from accounts meant to hold consumer deposits and real estate agent commissions.
RECO alleges iPro’s former leadership orchestrated what it calls a “Trust Scheme” involving the deliberate misuse of funds that should have been held separately and safely for consumers and agents.
“Consumers and agents placed their trust in iPro, and that trust was violated,” said Katie Steinfeld, chair of RECO’s board of directors, in a statement.
The regulatory action seeks court orders that would allow RECO to trace where the allegedly stolen money went and return it to the proper trust accounts. The regulator did not specify how much money was involved or how many people were affected.
Trust accounts in real estate transactions typically hold buyer deposits during the period between when an offer is accepted and when a sale closes, as well as commissions owed to agents. Ontario law requires these funds to be kept separate from a brokerage’s operating money.
RECO said it has also ordered a forensic audit of iPro and is cooperating with law enforcement investigations. The regulator previously issued a freeze order on iPro’s assets.
“This was a serious breach of trust by iPro’s former leadership,” said Brenda Buchanan, RECO’s CEO.
The Ontario Real Estate Association and Toronto Regional Real Estate Board issued a joint statement supporting the legal action but said “more needs to be done.” The industry groups called for independent oversight of RECO through the Ontario Ombudsman, saying the matter “impacted 2,400 REALTORS and their clients across the province.”
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