Rui Alves, whose now-defunct iPro Realty Ltd. is under investigation for a $10.5-millon trust account scandal, insists the missing money was used to keep the floundering brokerage afloat, not enrich him personally.
“The suggestion that millions of dollars was diverted for our personal use is false,” he said in a written statement, first reported on by the Toronto Star and obtained by Real Estate Magazine.
The co-founder of the collapsed brokerage admits to “serious mistakes” and says he has regrets for the “chaos” caused to industry peers, iPro’s former agents and consumers.
He owns up to using trust account funds, calling it “misguided attempts to save the company,” which grew at warp speed over the last decade to 17 offices and 2,400 agents across Ontario.
“We failed everyone,” he wrote.
The statement was not signed by his business partner Fedele Colucci.
Alves said iPro is not the only brokerage in Ontario that operates by moving trust account funds into its general accounts.
He called it a “vulnerability in the system,” and one that Real Estate Council of Ontario (RECO) should consider addressing.
RECO has been under fire by the industry and consumers for its handling of the iPro situation. It said it became aware of the trust account shortfall in May, leaving many to question why the public wasn’t notified until August.
This week, RECO obtained several court orders, with one of them freezing Alves and Colucci’s assets. 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.
iPro’s offices shut down on Aug. 19. The total amount missing is now closer to $6.5 million, since the brokerage’s assets were sold to iCloud Realty for $3 million.
Police investigation in ‘early stages’
The Ontario Provincial Police (OPP) Anti-Rackets Branch is in the early stages of an investigation related to iPro.
OPP spokesperson Eric Cranton told Real Estate Magazine on Thursday that the police service cannot speculate on how long the investigation will take or what the outcome will be.
“We will take the time needed to conduct a complete and thorough investigation,” wrote Cranton.
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.