The Real Estate Council of Ontario (RECO) is requesting an emergency injunction from the province’s Superior Court to freeze the assets of iPro Realty and its co-founders. This action follows a significant $10.5 million shortfall in the brokerage’s consumer deposit and commission trust accounts.

The injunction, filed in Toronto on September 11, alleges that iPro’s co-founders, Rui Alves and Fedele Colucci, along with seven associated companies, engaged in a scheme that involved the “systematic diversion, removal and misuse” of funds held in trust for consumers and agents. RECO described this as a “deliberate breach” of fiduciary, statutory, and ethical obligations, impacting consumers and registrants.

The allegations have not yet been proven in court. RECO's investigation, which began in May, found that Alves and Colucci had illegally disbursed the $10.5 million from the trust accounts. In August, RECO facilitated the transfer of 2,400 employees from iPro Realty to iCloud Realty, allowing the co-founders to avoid charges and fines.

Brenda Buchanan, CEO of RECO, stated, "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."

The court filing seeks to freeze the assets of iPro Realty, Alves, Colucci, and their associated companies, which include IP Holding Realty, Hippo Holdings Corp., Sutton Group Professional Real Estate Services, Alco Motors, and Alco Rent-A-Car. The respondents will have seven days to provide a statement detailing the nature, value, and location of their assets in Canada.

RECO is also requesting a court order to trace the flow of the diverted trust funds and return them to their original accounts. The injunction seeks assistance from banks, including TD Canada Trust, Bank of Montreal, and National Bank, to provide documentation regarding the respondents’ assets.

Katie Steinfeld, chair of RECO’s board of directors, emphasized the importance of trust in real estate transactions, stating, "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."

This legal action follows RECO's announcement in late August that it had engaged Dentons Canada to conduct a forensic audit of iPro Realty. RECO is cooperating with law enforcement in their investigations. The Ontario Provincial Police confirmed they have launched an investigation into the matter, which has been assigned to the OPP Anti-Rackets Branch. Further details are not available as the investigation is still in its early stages.