The Real Estate Council of Ontario (RECO) has taken the first steps in launching legal proceedings against iPro Realty’s former principals and other parties.
RECO has issued a notice of application with the Ontario Superior Court of Justice, asserting that Fedele Colucci and Rui Alves, among others, “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,” reads a statement from RECO released on Friday.
“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,” reads the statement.
RECO’s proceeding seeks a freeze of assets and further requests a court order that will permit RECO 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 $8 million, RECO has said.
“Consumers and agents placed their trust in iPro, and that trust was violated. RECO is committed to seeking justice for affected agents and consumers by using all available remedies to recover the funds that should have remained in trust,” said Katie Steinfeld, chair of RECO’s board of directors.
RECO has already undertaken a freeze order of iPro assets, launched a forensic audit of iPro, and is conducting an independent audit of the iPro matter by law firm Dentons.
“This was a serious breach of trust by iPro’s former leadership. Our commitment is to explore every available legal step to protect consumers and registrants, including pursuing recovery of these funds through the courts,” said Brenda Buchanan, CEO of RECO.
RECO says it is continuing to cooperate with law enforcement in support of their investigations.
More details to follow.
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.