A forensic investigation into the financial data of the iPRO Realty Ltd. shows a complicated web of mixed financial data with the vast group of companies owned by former brokerage principals Fedele Colucci and Rui Alves.
New evidence submitted by the Real Estate Council of Ontario (RECO) last week in the current lawsuit against Colucci, Alves and their companies reveal what a complex schedule seems to be for the abuse of Trustfonds by the former IPRO owners via a network of accounts and entities.
Reco, in the case submitted to the Ontario Superior Court of Justice, argues that Colucci and Alves “systematically abused trust funds” by moving them to operational accounts and related companies, and, through direct payments, to themselves and their employees.
Findings from the 700 pages of sworn statements from Reco CEO Brenda Buchanan and Forensic Accountant Alessandra Leggio di Matteo show a huge distraction of funds transferred from IPRO’s legal trust accounts to regular operational accounts.
In total there were approximately $ 30 million in funds that should have been held in confidence instead of the general account of the company or sent elsewhere.
At least $ 14.3 million was moved through electronic transfers and $ 10.1 million through checks of the broker’s trust accounts to the general accounts, according to judicial documents. An extra $ 2.63 million in trust controls have been pronounced on “Ipro Realty Ltd.” But deposited in unknown destinations.
From the documents, prepared by Reco’s counsel Dentons Canada, also show that Ipro Realty Inc. – A separate entity of the brokerage – $ 3.4 million from his own trust accounts to his general account and wrote hundreds of thousands in checks of his trust in the other IPRO’s other accounts.
In a statement, Reco said that these sworn statements wanted to prove his claim that an intentional trust arrangement was arranged by the former clients of Ipro and related parties “to distract and abuse consumer deposits and agent committees that had to be held in confidence.”
“This regulation is a serious infringement of fiduciary, legal and ethical obligations and has damaged consumers, registrants and the wider real estate sector,” says Reco.
The Procedure of Reco is looking for a freezing of assets and also asks for a judicial order that RECO allows to trace the flow of trust funds that have been diverted and return to the tractors from which they were taken.
The list of respondents includes companies that are Colucci, Alves or both directors, including: IP Holding Realty Ltd., Hippo Holdings Corporation, Sutton Group Professional Real Estate Services Inc., Alco Motors Ltd. and Alco Rent-a-car Ltd.
These companies have “consciously helped” iPRO and the breaches of the co-founders of the tasks, reads the original request, “and have consciously received money impressed by a trust under the (Trust in Real Estate Services Act) and in common law.”
The 17 offices of IPRO will be closed on 19 August, with 2,400 agents, after the discovery of $ 10.5 million that is missing in the broker’s trust accounts. The total missing amount is now closer to $ 8 million, has said Reco.
Where have the funds gone?
Reco claims that as soon as funds on the general accounts were incorrect, the money was used for various unauthorized purposes, in particular to repay investors and lenders.
The forensic assessment found $ 870.158 in checks issued of the general accounts of Ipro to people mentioned on an internal “iPro Loans List”.
Likewise, $ 1.05 million was paid from the Hippo Holdings account on Namur on a “Hippo Investors List”, according to documents
In addition, forensic analysis discovered that Colucci received at least $ 172,864 via checks from the general account from Ipro Realty, plus $ 137,795 more via checks from the Hippo account.
Rui Alves also received $ 108.145 in checks from Ipro Ltd. and Ipro Inc. General accounts, according to judicial documents.
In addition, Joselle Alves Personal Real Estate Corporation (owned by Alves’ husband) received $ 41,000 in payments, and Meli Colucci (Husband of Colucci) received $ 42,893, both paid from IPRO’s notes.
In his statement to the media, Reco said that the evidence shows that the ‘true state’ of the tractors were deliberately hidden by:
- Operate multiple accounting systems
- Forged records
- Postponing disclosure until immediately before a planned inspection
“In addition, they not only betray the trust of thousands of Ontarians, but also other parties that relied on their compliance,” said Reco.
Reco says it continues to collaborate with law enforcement to support their research.
Courtney Zwicker is a digital reporter and associated editor for REM. She is located in Atlantic Canada and has more than ten years of experience with daily business news.
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