Shuttered iPro’s Co-Founder Denies Taking Company Funds for Personal Use
An iPro Realty co-founder says he did not withdraw funds from client and broker trust accounts for personal use.
Rui Alves told The Toronto Star that his family did not benefit from the withdrawal of $10.5 million from the brokerage’s trust accounts. Alves made his first public comments after the Real Estate Council of Ontario shut down iPro amid mishandling of the money. He and fellow co-founder Fede Colucci agreed never to apply to certify a brokerage again or serve as brokers while avoiding charges and fines from RECO.
The company paid back $3 million of the mishandled money . On Ontario court judge recently froze iPro’s assets, while the Ontario Provincial Police are investigating the firm co-founders’ actions. RECO is also tracing where the funds went, and the company is facing legal action.
Court filings and multiple reports indicate that iPro’s debts greatly exceed the value of the firm.
Alves did not deny that funds were diverted in his statement to the Star. He attributed the company’s financial troubles to its rapid growth over the past decade and failure to manage its account properly.
“We made serious mistakes in financial management and oversight,” he told the Star. “We deeply regret the chaos our serious error in judgment and misguided attempts to save the company has caused to the industry, iPro agents, co-op brokerages and consumers.
“We failed everyone.”
Alves told the Star that iPro is not the only brokerage using funds in trust accounts to pay bills. He called on RECO to consider phasing in regulatory reform over time, “rather than immediately, as that would cause the collapse of hundreds of brokerages.”
Alves told the Star that he sent the comments against the advice of his lawyer. Colucci declined the Star’s request for comment through his lawyer as he is facing court action. Colucci did not sign the statement that Alves sent, the Star noted.
Citing court filings, The Globe and Mail reported that iPro’s $27-million debt far exceeds the value of the defunct business. Court heard Tuesday that there are two iPro-branded companies with multiple bank accounts; however, only one of the firms, iPro Realty Ltd., was registered with RECO, the Star reported.
In the wake of the scandal, RECO ousted longtime registrar Joseph Richer. But critics have contended that he could not have acted without the knowledge of RECO’s top leaders.
The Toronto Regional Real Estate Board and Ontario Real Estate Association have called for RECO to come under independent governance through the province’s ombudsman.
Pictured: Former iPro Realty listing.
Photo: Realtor.ca
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