The Real Estate Council of Ontario (RECO) has taken the first steps in launching legal proceedings against iPro Realty’s former principals and other parties.
RECO has issued a notice of application with the Ontario Superior Court of Justice, asserting that Fedele Colucci and Rui Alves, among others, “orchestrated and executed a trust scheme involving the systematic diversion, removal and misuse of consumer deposit and agent commissions held in trust on their behalf,” reads a statement from RECO released on Friday.
“The trust scheme was a deliberate breach of the iPro respondents’ fiduciary, statutory and ethical obligations, and was executed at the expense of consumers, registrants, and RECO,” reads the statement.
RECO’s proceeding seeks a freeze of assets and further requests a court order that will permit RECO to trace the flow of trust funds that were diverted and return them to the trust accounts from which they were taken.
iPro’s 17 offices shut down on Aug. 19, affecting 2,400 agents, following the discovery of $10.5 million missing from the brokerage’s trust accounts. The total amount missing is now closer to $8 million, RECO has said.
“Consumers and agents placed their trust in iPro, and that trust was violated. 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,” said Katie Steinfeld, chair of RECO’s board of directors.
RECO has already undertaken a freeze order of iPro assets, launched a forensic audit of iPro, and is conducting an independent audit of the iPro matter by law firm Dentons.
“This was a serious breach of trust by iPro’s former leadership. Our commitment is to explore every available legal step to protect consumers and registrants, including pursuing recovery of these funds through the courts,” said Brenda Buchanan, CEO of RECO.
RECO says it is continuing to cooperate with law enforcement in support of their investigations.
The list of respondents includes companies that either Colucci, Alves, or both are directors of, 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 “knowingly assisted” iPro and its co-founders’ breaches of duties, reads the application, “and have knowingly received funds impressed with a trust under the TRESA and at common law.”
It says various investors in iPro may be added to the court action if they have received trust funds.
Colucci and Alves previously operated a brokerage under Sutton Group before taking their business independent.
RECO’s timeline of events
According to the application, the following is RECO’s account of the discovery of the shortfall in the trust account:
- May 2025 – RECO scheduled a routine inspection of iPro for May 20
- May 19 – iPro disclosed to RECO a $6.5-million shortfall in the trust that holds consumer funds and a $3.5-million shortfall in the trust that holds agent commissions
- May 21-22 – RECO conducted inspections confirming the trust account shortfalls
- July 24 – A $3-million payment was made into the consumer trust account, reducing the shortfall
TRREB and OREA respond
In a combined statement, Ontario Real Estate Association (OREA) and Toronto Regional Real Estate Board (TRREB) commended RECO for these efforts, but said “more needs to be done.”
“It’s time for independent oversight of RECO through the Ontario Ombudsman,” reads the statement, signed by OREA president Cathy Polan and TRREB president Elechia Barry-Sproule.
For over eight years, OREA and its membership of nearly 100,000 Realtors have been calling for stronger consumer protections, including increasing accountability and transparency at RECO via ombudsperson oversight.
“We will continue to advocate for reforms that ensure that Realtors and their clients have the utmost confidence in Ontario’s real estate market, its regulator, and the profession as a whole,” says the statement.
Editor’s note: The story was updated on the morning on Sept. 13 with comments from OREA and TRREB.
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.
Extraordinary, This was a serious breach of trust by iPro’s former leadership and let an include RECO for at least 3 months that we know if. Additionally all commissions paid from the trust accounts over the period of the shortfall aught to be recalled as they form part of the fraud. Those laid commissions helped subsidize the crime.
Perhaps the first step should be to force brokerages to pay realtors’ their commissions immediately upon receipt of the funds. That would be a good start to eliminating theft or misuse of those funds. The good brokerages already do this.