iPro owed more than $27-million to dozens of private investors and lenders, court documents show.Evan Buhler/The Canadian Press
iPro Realty had debts of more than $27-million owing to dozens of private investors and lenders, far exceeding the value of the defunct brokerage, according to new documents filed in court by the Real Estate Council of Ontario.
It’s the latest development in the collapse of what was one of Ontario’s largest real estate brokerages. On Aug. 14, RECO announced that iPro was selling its assets to iCloud Realty Ltd. after the discovery of millions missing from iPro’s consumer deposit and realtor commission trust funds.
When iPro sold its assets to iCloud, the purchase price was $3-million, which was transferred directly to iPro’s trust account.
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Two affidavits filed to Ontario’s Superior Court of Justice show for the first time a detailed accounting of where some of the money from trust funds went. They also outline the undertaking agreement that RECO entered into with iPro owners Fedele Colucci and Rui Alves, whereby they would not face any further disciplinary action after their brokerage closed on Aug. 19.
An affidavit filed Friday from Alessandra Leggio Di Matteo, a forensic audit expert and chartered professional accountant with MNP LLP, shows that between Jan. 1 and Aug. 22, iPro moved more than $17-million out of its trust accounts, co-mingling the funds with general brokerage funds. When the shortfall was reported to RECO on May 19, there was about $10.5-million still missing.
The debts are outlined in two documents: There are 44 loan agreements made out to iPro totalling roughly $7-million and there are 131 investor agreements with a company called Hippo Holdings that until 2024 owned iPro’s brokerage business.
More than $1.8-million in trust money was used to pay iPro’s lenders and investors in the same period. Ms. Di Matteo also found 28 transactions adding up to $281,009 that appear to be payments to Mr. Colucci and Mr. Alves. There were also 16 cheques worth $56,000 made out to “Cash,” including eight cheques between March 24 and 27 that added up to $40,000. There were also several cheques to what appear to be construction contractors for windows, exterior cladding and electrical work – as well as one cheque to The Venetian banquet hall – adding up to $177,180.
Another $846,850 in funds that appear to come from trust accounts relate to operating costs of running the brokerage, which at the time had more than 2,400 realtors and brokers and 17 branch offices.
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The largest transfers were into “an unknown ‘IPRO REALTY PAY’ bank account” that totalled more than $7.4-million.
“These ‘IPRO REALTY LTD PAY’ transactions are concerning because it appears that iPro Realty Ltd. or iPro Realty Inc. held additional bank accounts that are currently unknown, to make sizeable deposits into accounts held by iPro Realty Inc. and Hippo,” wrote Ms. Di Matteo. “The full extent to which Trust Funds were commingled and transferred is therefore unknown and requires further documentation to ascertain.”
The affidavits are in service of RECO’s notice of application seeking a tracing of all iPro- and Hippo-related banking records, in attempts to recover upward of $7-million that was still missing from the trust funds by the time iPro closed.
Mr. Alves and Mr. Colucci could not be reached for comment.
The affidavit filed by RECO chief executive officer Brenda Buchanan also noted that the undertaking agreement that wound up iPro included provisions that Mr. Colucci and Mr. Alves agreed they would have no role whatsoever with any future brokerage.