Toronto police have laid 75 charges against a real-estate lawyer suspected of defrauding condo buyers of millions of dollars.
According to police, the lawyer completed purchase-and-sale agreements in 2012 for pre-construction condominium units in a building planned on a vacant lot near Yonge Street and Finch Avenue.
As part of that process, Det. Const. Chris Devereux said the lawyer took deposits from the buyers to be held in trust until construction by the Centrust Development Group was to be completed. The condo project was cancelled in January, however, and the property at 5220 Yonge St. was sold under a power of sale in June.
The police investigation was launched when victims came forward in July alleging their deposits were never returned to them. Police said the lawyer has filed for bankruptcy and one of the two accounts containing the trust money had been drained and closed in 2012.
So far, there have been 25 complainants who claim to have lost more than $2 million collectively, but based on bankruptcy papers filed by the lawyer, police estimate there could potentially be 141 complainants with around $12.4 million in expected losses. Some of the victims have individually lost more than $20,000.
It is not known if the monies are still in Canada and the whereabouts of Joseph Lee, the Centrust developer, is also unknown.
If the funds are no longer in Canada, it could be “very difficult” for police to retrieve the money. This is the largest fraud investigation 32 Division has dealt with, Devereux said, admitting that there has been a learning curve.
Devereux said he believes the victims followed the rules in placing their deposits in a trust account which is not supposed to be touched or moved until the completion of the building.
“This was beyond just being a scam,” he said. “It looks like it was going to be a development. For whatever reason, it just collapsed and then the monies were there.”
Meerai Cho, 63, is facing 25 counts of fraud over $5,000, 25 counts of possession of property obtained by crime and 25 counts of criminal breach of trust.
Police said Cho, scheduled to appear in court on Oct. 2, was released from custody on Tuesday, but had to surrender her passport as a condition of her release.
“That is to have her still remain in the jurisdiction while these matters are being brought forward,” Devereux said.
The Law Society of Upper Canada is also investigating Cho’s actions and suspended her licence indefinitely following a hearing today. The society’s lawyer directory indicates that Cho’s license had been restricted when she declared bankruptcy.
“A bankrupt licensee cannot practise real estate or operate a trust account,” according to Cho’s file on the law society’s website.
Some civil lawsuits have also been brought forward by purchasers.
None of the allegations against Cho have been proven in court.
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