A forensic investigation into the financial records of The iPro Realty Ltd. shows a complicated web of intermingled financials with the sprawling group of businesses owned by former brokerage principals Fedele Colucci and Rui Alves.
New evidence filed by the Real Estate Council of Ontario (RECO) last week in the ongoing court action against Colucci, Alves, and their companies reveals what appears to be a complex scheme of trust fund misappropriation by iPro’s former owners through a network of accounts and entities.
RECO, in the case filed with the Ontario Superior Court of Justice, argues that Colucci and Alves “systematically misused trust funds” by moving them into operating accounts and related companies, and, through direct payments, to themselves and their associates.
Findings from the 700 pages of affidavits of RECO CEO Brenda Buchanan and forensic accountant Alessandra Leggio Di Matteo show a massive diversion of funds siphoned from iPro’s legal trust accounts into regular operating accounts.
In total, roughly $30 million of funds that should have been held in trust were instead commingled with the firm’s general account or sent elsewhere.
At least $14.3 million was moved via electronic transfers and $10.1 million via cheques from the brokerage’s trust accounts into its general accounts, court documents show. An additional $2.63 million in trust cheques were made out to “iPro Realty Ltd.” but deposited into unknown destinations.
The documents, prepared by RECO’s counsel Dentons Canada, also show iPro Realty Inc. – a separate entity from the brokerage – transferred $3.4 million from its own trust accounts to its general account, and wrote hundreds of thousands in cheques from its trust to iPro’s other accounts.
In a statement, RECO said these affidavits set out to prove its assertion that a deliberate trust scheme was orchestrated by iPro’s former principals and related parties “to divert and misuse consumer deposits and agent commissions that were required to be held in trust on their behalf.”
“This scheme represents a serious breach of fiduciary, statutory, and ethical obligations, and has harmed consumers, registrants, and the broader real estate sector,” said RECO.
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.
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 original application, “and have knowingly received funds impressed with a trust under the (Trust in Real Estate Services Act) and at common law.”
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.
Where did the funds go?
RECO is arguing that once funds were improperly in the general accounts, the money was used for a variety of unauthorized purposes, particularly to repay investors and lenders.
The forensic review found $870,158 in cheques issued from iPro’s general accounts to people listed on an internal “IPRO Loans List”.
Similarly, $1.05 million was paid out of Hippo Holdings’ account to names on a “Hippo Investors List,” documents show
Additionally, forensic analysis found Colucci received at least $172,864 via cheques from iPro Realty’s general account, plus $137,795 more via cheques out of Hippo’s account.
Rui Alves likewise received $108,145 in cheques drawn from iPro Ltd. and iPro Inc. general accounts, court documents show.
Moreover, Joselle Alves Personal Real Estate Corporation (owned by Alves’ spouse) received $41,000 in payments, and Meli Colucci (spouse of Colucci) received $42,893, both paid out of iPro’s general accounts.
In its statement to the media, RECO said the evidence demonstrates that the “true state” of the trust accounts was purposefully concealed by:
- Operating multiple accounting systems
- Falsifying records
- Delaying disclosure until immediately before a scheduled inspection
“In doing so, they not only betrayed the trust of thousands of Ontarians but also misled other parties who relied on their compliance,” said RECO.
RECO says it is continuing to cooperate with law enforcement in support of their investigations.
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.
Wow! Even worse than we thought. Thirty million dollars!
I would very much like to know more about the status of long-time former registrar Joseph Richer and all of the other members of the Board of Directors. What we do know is that there were millions of dollars being tossed around with little understanding of where it all went.
Frankly, they are all suspect and I cannot fathom why the RECO Board of Directors has not been summarily disbanded by the Ministry until the investigation is complete.
Is it possible to believe that there was no collusion or assistance provided to iPro by the former registrar and/or his associates at RECO in furtherance of this scheme? Is it possible to believe that Richer acted alone?
What are the circumstances of Richer dismissed? Was it for cause? Was it via mutual agreement? Was he provided severance – if so how much?
Thank you for this! Reco knew for 3 months and is now acting like the are just dealing with this like everyone else. Thank you so much for making such a clear statement. These things need to be heard.
Thanks for this report however it’s lacking a lot of detail of where the money went.
One other important fact is the time line for the funds being removed. Was $10.8 million the correct amount as of Mid May and a further $19 million since end of May? Or was all $30 million missing before RECO knew anything, if so, when did the missing funds begin to leave the trust accounts?
It’s not $30Million missing, it’s $30Million moved around inappropriately. The missing funds is under $10Million now and a Norwich order will trace all moved funds. A Mareva injunction will seize all assets in anticipation of recovery. That’s what today’s hearing was for. Justice Black’s decision expected within 24 hours.
If I understand this correctly, according to what is reported, the affidavits are purportedly claiming that an additional $24 million was transferred from trust into the general account while $2.63 million of intended trust funds never made it into the trust account and all of that was wrongly used to repay investors, lenders, iPro’s owners directly and through their companies, their wives and others.
With the theft then adding up to $27 million in addition to the $8 million originally reported embezzled amount, it’s hard to imagine how RECO’s investigators only found $10 million, not $27 million, and how absconding with this much money didn’t cause closing failures or mass complaints of non-commission payouts without it being a ponzi scheme of sorts.
On top of which there were various other trust accounts not belonging to the brokerake’s operations
Did investors and lenders receive financial summaries or summary reports and if so none of it looked suspicious?
Baffling, truly baffling.
That’s because it was discovered that iPro was running TWO sets of books. Once a deeper forencis fraud audit was done, more could be found.
Yes, I got that they were running multiple, not two, but multiple sets of books. Having done a brief analysis without the benefit of being able to read the forensic accountant’s affidavit andseeing that the factum mentions $30 million nowhere in it, the $30 million doesn’t add up unless the $12.5 million inflows into Hippo and the two iPro accounts are included, as well as the $11,472,724 of supposed loans from the owners’ private corps as alluded to in the motion, which may have been (even more egregiously) funded by previously defalcated funds as opposed to being true investor loans, plus the $6.5 million shortfall. There’s certainly some double counting in there somewhere but it looks to be at least $24 million.
Whatever the real amount is, the two day audit showing a $9.5 million trust shortfall was very sloppy which would be a bigger problem for the Registrar, the investigators and RECO.
Which law firm is stepping up to file a class action lawsuit against RECO? Every Realtor in Ontario is entitled to damages.
My thoughts exactly. RECO has exposed itself to a contributory negligence claim at the very least.
There has been no real explanation regarding the circumstances surrounding the dismissal of the former registrar Joseph Richer. What were the terms of dismissal?
Furthermore the public is entitled to know the content and nature of the seeminly implausible agreement between RECO and the principals of iPro whereby the perpetrators of this fraud were permitted to walk away legally unscathed.
It is nothing short of a scandal that millions were diverted from trust accounts — the very funds meant to protect consumers — yet no one has been held criminally accountable. The system allowed this to happen: regulators, oversight agencies, and the government bear direct responsibility for permitting such fraud to run rampant.
We must ask: Why are Colucci, Alves, and their network not behind bars yet? Allowing the theft of consumer and agent funds without severe consequences sends the message that money buys your freedom, not justice.
This isn’t just a failure of individual morality — it’s a systemic failure. The government and regulatory bodies need to act swiftly, not wait for class‐action lawsuits. Those who betrayed trust must be prosecuted, assets seized, and victims made whole. Anything less is a betrayal of the public’s confidence.