The B.C. Financial Services Authority (BCFSA) has issued “urgent orders” suspending Realtor Balpreet Singh Bal and his brokerage, Fraseridge Realty Ltd., over allegations of serious financial misconduct.
The provincial regulator has also frozen trust accounts connected to Fraseridge Realty (operating as Amex-Fraseridge Realty), Bal Realty Services Inc., Jovi Realty and Lighthouse Realty Ltd., citing concerns that millions of dollars in client trust funds may have been mishandled
“BCFSA has frozen the accounts of Bal’s brokerages to proactively ensure that trust funds are preserved while it continues its active investigation,” BCFSA said in a news release.
Alleged mishandling of millions in trust funds
In a written decision dated Oct. 30, BCFSA hearing officer Gareth Reeves said there were “reasonable grounds” to believe Bal had engaged in deceptive dealing, mishandling of trust funds and failing to act honestly
The regulator said the investigation began after a complaint that Amex-Fraseridge Realty was improperly withholding $2.75 million in a trust account from a real estate transaction in Surrey, B.C. According to the decision, those funds were held despite a written direction to release them to the buyer if the sale didn’t go through.
Reeves also found evidence that Bal used trust accounts to hide money from the Canada Revenue Agency, and that he had taken steps to relocate to California, raising “a real risk that he may move beyond the jurisdiction of the superintendent and appropriate Amex’s and Bal Realty’s funds in the process.”
Additional freeze orders for Jovi and Lighthouse Realty
A subsequent ruling from Nov. 6 extended the freeze to Jovi Realty Inc. and Lighthouse Realty Ltd., where Bal had previously been a director and shareholder. Reeves found that $2.75 million from the disputed Amex transaction had been transferred into Jovi Realty’s operating account, where it remained for more than a month..
Reeves wrote there were “reasonable grounds to believe that Jovi improperly received these funds … and plans to transfer those funds contrary to the requirements of RESA.” He also said that both Jovi and Lighthouse lacked proper managing-broker oversight and that some trust accounts were not even identified as trust accounts, a violation that could expose client money to seizure or mismanagement.
The orders prohibit Jovi and Lighthouse from withdrawing or transferring any funds held in their bank accounts until further notice.
Penalties and consumer protections
BCFSA said its investigation into Bal’s conduct is ongoing and that penalties under RESA can reach $250,000 for individuals and $500,000 for corporations.
Consumers who deposited funds with the affected brokerages may be eligible for compensation through the Special Compensation Fund.
“BCFSA is communicating directly with licensees at the impacted brokerages to ensure they can effectively support their clients during this time,” the regulator said.
Jordana is the editor of Real Estate Magazine. You can reach her by email.