David Seto, the owner of ReMax Executive Realty was sentenced to one year in jail for failing to deposit client’s money into a trust account.
According to testimony heard in court, more than half a million dollars in home buyers’ and agents’ money was unaccounted for.
“These were very serious matters,” said Robert Lewin of the Ontario Court of Justice. “This was a large amount of money lost to people who were trying to close real estate transactions.”
Seto pleaded guilty to eight counts of failing to comply with the Real Estate and Business Brokers Act. His lawyer said that Mr. Seto was a victim of the economic downturn, when real estate sales started to fall in 2008. Instead, Mr. Seto put the money into the general accounts of Executive Realty. His company was also fined a total of $200,000.
The lawyer argued that his client didn’t profit from this. He didn’t run away with the money or put it in a foreign bank. “He and his wife are virtually wiped out”.
After receiving an anonymous complaint in January 2009 the Real Estate Council of Ontario (RECO), the regulatory body for realtors in the province, decided to investigate, according to an agreed statement of facts. RECO requires all deposit monies from house buyers who have purchased a home, to be placed in a trust account. Seto was also under emotional stress because his wife was suffering from cancer and he had to mortgage their home twice to keep the company going, he told the court.
Seto’s lawyer asked the court for leniency, but prosecutor Tim Snell, legal counsel for the Real Estate Council of Ontario, requested jail time as a “deterrent” to others who may contemplate doing the same thing.
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