Rui Alves, whose now-defunct iPro Realty Ltd. is under investigation for a $10.5-millon trust account scandal, insists the missing money was used to keep the floundering brokerage afloat, not enrich him personally.
“The suggestion that millions of dollars was diverted for our personal use is false,” he said in a written statement, first reported on by the Toronto Star and obtained by Real Estate Magazine.
The co-founder of the collapsed brokerage admits to “serious mistakes” and says he has regrets for the “chaos” caused to industry peers, iPro’s former agents and consumers.
He owns up to using trust account funds, calling it “misguided attempts to save the company,” which grew at warp speed over the last decade to 17 offices and 2,400 agents across Ontario.
“We failed everyone,” he wrote.
The statement was not signed by his business partner Fedele Colucci.
Alves said iPro is not the only brokerage in Ontario that operates by moving trust account funds into its general accounts.
He called it a “vulnerability in the system,” and one that Real Estate Council of Ontario (RECO) should consider addressing.
RECO has been under fire by the industry and consumers for its handling of the iPro situation. It said it became aware of the trust account shortfall in May, leaving many to question why the public wasn’t notified until August.
This week, RECO obtained several court orders, with one of them freezing Alves and Colucci’s assets. RECO is pursuing iPro for removing and misusing consumer deposits and agent commissions held in trust.
RECO said in its original court application that it is seeking to trace the flow of trust funds that were diverted and return them to the trust accounts.
iPro’s offices shut down on Aug. 19. The total amount missing is now closer to $6.5 million, since the brokerage’s assets were sold to iCloud Realty for $3 million.
Police investigation in ‘early stages’
The Ontario Provincial Police (OPP) Anti-Rackets Branch is in the early stages of an investigation related to iPro.
OPP spokesperson Eric Cranton told Real Estate Magazine on Thursday that the police service cannot speculate on how long the investigation will take or what the outcome will be.
“We will take the time needed to conduct a complete and thorough investigation,” wrote Cranton.
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.
It’s laughable that Alves claims these trust funds were used to “save” iPro, while what’s happening behind the scenes smells far worse. How coincidental that the brokerage’s assets were sold to “iCloud Realty” for $3 million — a name that sounds eerily close to Apple’s brand. Unless there’s a licensing deal with Apple, that feels like pure copyright theft or brand piggybacking.
And now we hear rumors that agents are being funneled into this “new” brokerage — as if we’re watching a play where roles are swapped but the same players remain. Perhaps “Reco” has a hand in orchestrating the charade: good cop/bad cop, pushing out one figurehead Joseph Richer, the RECO Registrar while riding shotgun in the shadows.
It begs the question: Why did he resign if he did nothing wrong? The optics suggest he was part of a cover-up. After all, under his watch, RECO cut a deal letting the iPro co-founders off without charges (despite millions missing from trust accounts).
The fact that Richer left right after the public outcry strongly implies there was pressure applied. It looks less like a clean exit and more like “You handle the fall guy while the real players stay hidden.”
So when Alves claims the trust money was used to “save the brokerage,” we have to ask: Was the rescue real—or was this a smokescreen to relocate the actors and assets under a new shell (iCloud?) while the damage is buried?
The bigger question: Why is no one going to jail for this? The manipulation of trust funds, the brand theft, the shifting of clients and agents — these aren’t mistakes. They’re moves. And they should be prosecuted as such.
The public and industry deserve clarity. Show the contracts, prove the chain of ownership, and let law enforcement do their job. Anything short of full transparency is complicity.
Real Estate Trust account money is not to be used to pay company expenses! They knew exactly what they were doing and had been doing it for a long time. The Real Estate Council of Ontario (and it was more than just one person) knew about this massive shortage of funds and chose to not take immediate action. Now Reco wants to take this seriously?! They apply to the courts to freeze assets! Seriously, these owners have stolen millions of dollars over a long period of time and continue to defend their theft of funds by saying that not a penny was used for personal gain. Do you really think they kept any assets with equity in their name? Seriously. RECO’s board of directors has failed to protect the public and their members.