Toronto condo fraud: Embezzlement, kickbacks and bid-rigging
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Two condo owners in downtown Toronto became fraud detectives when they learned that the contractor their condo corporation paid $142,000 for low-flow toilets had disappeared with the cash.
In North York, a new condo board president uncovered his property manager’s $1-million embezzlement.
Meanwhile, contractors Metro spoke to say fees in some condos are high because the bid rigging and kickbacks in their industry inflate the cost of maintenance and repairs.
“Condo owners in Ontario lose millions of dollars a year, because of bid rigging and fraud,” alleges Anne-Marie Ambert, a retired York University sociology professor who was recently on the expert panel of the Ministry of Consumer Service’s review of the Condominium Act.
The ministry is planning to update the legislation that governs condo corporations, for the first time in 15 years. Recommendations are expected this fall.
Ambert represented the interests of condo owners on the panel. She also runs the online Condo Information Centre.
Over four years, she’s received 2,800 letters from condo owners, managers, board members, contractors and lawyers. Over half of them alleged financial problems, including rigged contract bidding, kickbacks, fraud and outright theft.
“It’s plaguing condo owners,” she said. “We’re aware of it when there’s a big scandal that goes into the news, but how widespread? I think it’s much more widespread than one would like to believe.”
Financial Crimes Unit Det. Sgt. Cam Field agrees, and said the unit has ongoing investigations into major condo fraud.
“Right now in Toronto there are condo corporations that have lost almost their entire reserve funds and other funds because criminal behaviour on the part of their board or the property manager,” said Field.
Field said the frauds his unit has investigated have left owners devastated and their condo funds bankrupt.
“That’s bad enough on its own, but taking that another step, if you want to sell your condo, a diligent buyer is going to look at the health of that condo corporation, look at the books and say this condo corporation is in a world of hurt and I’m not buying this unit,” he said.
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