Real Estate Council of Ontario (RECO) was successful in obtaining several court orders in a hearing Monday, which freeze the assets of iPro Realty’s Ltd.’s founders, and give Fedele Colucci and Rui Alves one day to tally up their anticipated living expenses and legal costs.
Justice William Black of the Ontario Superior Court of Justice heard the matter virtually. RECO is pursuing iPro for removing and misusing consumer deposits and agent commissions held in trust.
RECO said in its original court application that it is seeking to trace the flow of trust funds that were diverted and return them to the trust accounts from which they were taken.
iPro’s 17 offices shut down on Aug. 19, affecting 2,400 agents, following the discovery of $10.5 million missing from the brokerage’s trust accounts. The total amount missing is now closer to $6.5 million, since the brokerage’s assets were sold to iCloud Realty for $3 million.
Justice Black’s orders specifically include a Mareva injunction, or a freezing order, which prevents the respondents from moving assets before the case is resolved.
Under a separate order, iPro’s former principals may apply for an order specifying the amount of funds they are entitled to spend on “ordinary living expenses, and legal advice and representation.”
Norwich Relief was also ordered, which compels banks to deliver to RECO any and all records pertaining to the respondents’ assets and accounts.
The list of respondents includes companies that either Colucci, Alves, or both are directors of, including: IP Holding Realty Ltd., Hippo Holdings Corporation, Sutton Group Professional Real Estate Services Inc., Alco Motors Ltd., and Alco Rent-A-Car Ltd.
In total, roughly $30 million of funds that should have been held in trust were instead commingled with the firm’s general account or sent elsewhere, according to court filings.
For more details, find court documents related to the matter here.
Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.