Ontario’s real estate regulator has escalated its response to the iPro Realty scandal, seeking a court order to freeze the brokerage’s assets and trace the flow of millions allegedly diverted from trust accounts.
The Real Estate Council of Ontario (RECO) filed a notice of application with the Ontario Superior Court of Justice asking for the freeze and the authority to recover consumer deposits and agent commissions that were allegedly siphoned out of trust accounts.
RECO shut down iPro Realty in August after discovering what it called a “significant shortfall” in its trust accounts, initially pegged at $10 million and later revised to under $8 million. The brokerage operated 17 branches across Ontario, including five in the GTA, and employed roughly 2,400 agents.
“Consumers and agents placed their trust in iPro, and that trust was violated,” RECO Chair Katie Steinfeld said in a statement. “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.”
The watchdog has accused iPro’s former principals and other parties of orchestrating a scheme to systematically divert and misuse trust funds. An independent audit by Dentons Canada LLP is underway, with an interim report expected by the end of the month.
Peel police have been notified but say the probe remains under RECO’s purview. RECO says its legal action is part of a “clear path toward recovering funds” and restoring confidence in Ontario’s real estate market.