Toronto lawyer Meerai Cho arrested in condo fraud totalling $12.4-million
The Globe and Mail
A Toronto lawyer was arrested Tuesday after at least 25 people came forward alleging they paid deposits for a condo in north Toronto, only to learn later that the land had been sold, the developer had fled and their money was gone.
Police laid 75 charges against Meerai Cho, 63, related to condo fraud totalling $12.4-million in expected losses from deposits on units at 5220 Yonge St.
At a time when construction is booming in Toronto, the alleged fraud calls into question whether strong enough safeguards exist for condo buyers in the city. While real estate lawyers and authorities say a crime of this nature is rare, others say the new-sale market needs more oversight.
“This wasn’t something that somebody met them [victims] down the back alley. This was a condo development, they were dealing with a lawyer at this time, and the purpose of the trust account is to hold the monies in trust, they are not supposed to be moved,” Det. Constable Devereaux said.
The victims’ losses vary from $40,000 to $700,000 in deposits, according to police.
The city approved 54 new condo projects in 2011, 60 projects in both 2012 and 2013 and have already approved 30 this year.
Leor Margulies, a real estate lawyer with Robins Appleby and a member of the executive board of the Building Industry and Land Development Association in Toronto, said this kind of fraud is very unusual.
“I don’t recall this ever happening,” he said.
That’s because, he says, there are sufficient safeguards in place that – when combined – protect buyers’ funds: The Condominium Act requires developers to ensure buyers’ deposits are held by an escrow agent – in this case, Ms. Cho – in a safe trust account; Additionally, all developments containing residential units must register with Tarion Warranty Corporation, which covers up to $20,000.
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