BUSINESS
08/27/2014 10:05 EDT | Updated 10/27/2014 05:59 EDT

Condo Fraud: Meerai Cho, Toronto Condo Lawyer Representing Centrium, Faces 75 Charges

George Rose via Getty Images
TORONTO, CANADA - JUNE 28: New office and condominium buildings line the Harbourfront as viewed at sunset from the Centre Island Ferry on June 28, 2014 in Toronto, Ontario, Canada. Canada's most populous city is undergoing a major economic boom with high-rise construction and renovation projects underway throughout the downtown and outlying neighborhoods. (Photo by George Rose/Getty Images)
Toronto police continue to investigate the disappearance of millions of dollars in down payments from hopeful condo buyers, as the provincial government stepped in Wednesday to say it will be conducting a review of the situation. 

Lawyer Meerai Cho, who represented a developer of the now-cancelled Centrium condo project, is facing 75 charges and has been temporarily suspended by the Law Society of Upper Canada. Police raided a building Wednesday that once held the developers' offices, but it was not immediately clear what, if anything, was found. 

The provincial agency Tarion, which exists to protect buyers of new homes by ensuring that builders abide by provincial legislation, has gotten involved in the matter, saying anyone who believes they may have been affected by this suspected fraud can contact them for assistance.

"Under the Ontario New Home Warranties Plan Act, deposits paid for new residential condominium units are protected up to a maximum of $20,000. Under the Condominium Act, deposit paid for future condominium units being purchased from developers are protected by a trust," said Tarion spokesperson Nilani Logeswaran.


 
"Tarion is committed to conducting a full review of the current situation to see if there are any lessons that can be learned and additional measures put in place to better protect buyers."

One of the victims of the massive condo fraud, Thomas Ma, put down $40,000 for the project on Yonge Street near Finch. 

"We did not doubt this project," he said. "Who could touch trust account money?" Ma said he received a letter saying the project had fallen through.

"This office telephone number and address -- they do dot exist," he said of the letterhead on the notice he received. "I just don't believe this is happening in Canada."

The law society alleges Cho mishandled $15 million of down payments that vanished from the trust accounts. 

Some of the buyers originally gave their money to a major law firm, Brattys LLP, based in Vaughan. It is unclear why that money ended up in Cho's office. 

The law firm says it is preparing a statement. 

May be near impossible to trace the money

"Had the monies been left where they were initially, at that law firm, I don't think we would be having this conversation," condo lawyer Aubrey Loeb said. 

Forensic accountant Al Rosen says it will be next to impossible to trace the money if it has disappeared overseas, as is being alleged. 

"What they tend to do is flip from country to country," Rosen said.

Loeb is optimistic that the people who bought residential units will get some of their money back. She says she hasn't heard of a case like this, where money has disappeared from trust accounts, in 25 years. 

"It's incredibly uncommon," Loeb said. "If they really want protection they should try to insist that the developer provide insurance for their deposits. But you can't do that after you've entered into an agreement. You can only do it while you are entering into an agreement.