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Sepideh Moazzani, 46, has been unable to trade in real estate since Oct. 17, 2019 after the Real Estate Council of Ontario suspended her registration and filed a proposal to revoke her license.

handout/Handout

The case of a suspended Toronto real estate agent who is undergoing bankruptcy proceedings and facing multiple civil lawsuits and a criminal fraud charge is raising questions about the effectiveness of Ontario’s real estate regulator.

Sepideh Moazzani, 46, has been unable to trade in real estate since Oct. 17, 2019 after the Real Estate Council of Ontario suspended her registration and filed a proposal to revoke her license. “The grounds for the proposal relate to long-standing indebtedness, misappropriation of funds, and breach of a Condition of Registration,” her RECO registry file reads.

As she waited through all of 2020 for a hearing at the License Appeal Tribunal (LAT), which adjudicates license revocations, Ms. Moazzani was further entangled in several legal fights connected to the luxury Shangri-la hotel and condominium tower in downtown Toronto. Two separate Shangri-la apartment owners have made claims of tens of thousands of dollars in unpaid back-rent for units Ms. Moazzani lived in or allegedly sublet as an Airbnb rental. And the condominium corporation has been ordered to provide evidence in a contempt of court action connected to civil and criminal fraud complaints brought against Ms. Moazzani by a Florida-based luxury goods merchant.

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All of this alleged conduct could become part of the decision to renew her license, but her lawyer Symon Zucker is confident Ms. Moazzani will be reinstated.

“There are millions of RECO cases every year … there are significant numbers of complaints by consumers that are dealt with. This isn’t anything that’s overly beyond the pale in terms of what’s handled by RECO,” said Mr. Zucker.

This is not the first time RECO has sought to revoke Ms. Moazzani’s licence. In 2009, it settled a complaint that resulted in a 90-day suspension. But that suspension is not listed in RECO’s registry for Ms. Moazzani. According to Joseph Richer, RECO’s Registrar, the law requires RECO to display disciplinary records for a minimum of five years. “After that, it has been our position to remove those decisions directly from the registry,” he said. As to why RECO only applies the minimum standard, Mr. Richer said: “That’s a good question … it’s the regulator’s discretion. At this point there’s only been a handful – I can’t think of any off-hand – where they have remained for longer.”

There are several complaints in the RECO submission to revoke her license at the LAT. Allegations by Shivom Gautam and his mother, Mahinder Pal Dass deal with Ms. Moazzani’s work as buyer’s representative in their 2018 purchase of a property on Edwalter Avenue in Toronto for $2.75-million. According to RECO’s submission to the LAT, on Nov. 21, 2018, Mr. Gautam began transferring large sums of money for the purchase deposit directly to Ms. Moazzani (deposits are typically only paid to trust accounts of a real estate brokerage, not to sales representatives). Ms. Moazzani in turn gave a $296,000 cheque to Blaney McMurtry LLP (the law firm representing the purchaser) but it was returned due to insufficient funds, forcing Mr. Gautam and his mother to find more money for the deposit. According to RECO, to this day Ms. Moazanni “has not refunded or accounted for the funds that were provided to her.”

“There are defences to all of [the complaints] and our witnesses on her behalf will testify to those issues,” said Mr. Zucker. “We’re for the most part satisfied that the outcome will favour Sepideh.”

Exteriors of the Shangri-la hotel and its residences on July 27, 2020.

Fred Lum/The Globe and Mail

John Lusink, President and Broker of Record for Right at Home Realty Inc., is critical of disciplinary decisions and information-sharing at RECO, which doesn’t allow brokers to see the underlying reasons behind a disciplinary decision when they are reviewing a potential hire or transfer into their practice.

“It’s frustrating for us as realtors,” Mr. Lusink said. “I read those same disciplinary decisions you see and you think, ‘Really, how did that person walk away with still being able to practice real estate?’ Mindboggling in some cases.”

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Ms. Moazzani has also been in bankruptcy proceedings since 2010, an exceptional length of time for a legal process to remain undischarged. Typically such proceedings are resolved in nine to 36 months. Mr. Richer said that while bankruptcy proceedings must be declared to RECO, it does not preclude a person from practising real estate in Ontario, nor does RECO note such proceedings in their public online registry. Contrast that with the Law Society of Ontario, for example, which restricts lawyers who have been declared bankrupt from practising real estate law and places restrictions on receiving or controlling money destined for trust accounts.

“Conditions [of practice for retaining a license] that are entered into voluntarily are not a matter of public record,” said Mr. Richer. “It’s the only sector I’ve seen that has that kind of provision in the legislation … that’s a bit unusual.”

According to RECO, in 2016 Ms. Moazzani agreed to conditions, including that she would make her best efforts to pay off her debts, in order to renew her license. Ms. Moazzani had also accumulated several garnishment orders for her income from different creditors, including the Canada Revenue Agency, Royal Bank of Canada and Access Easy Funds Ltd.

“Ms. Moazzani did not use her best efforts … rather [Ms.] Moazzani has avoided payment of monies under the garnishment orders,” states RECO’s revocation proposal, which alleges Ms. Moazzani was able to avoid these garnishments through an arrangement with her brother Peter Moazzani (also a real estate agent with her former employer Chestnut Park). RECO alleges that, the siblings would co-list on home transactions, but only Peter Moazzani would collect the commission and then share it with Ms. Moazzani informally.

“To pay your debts you’ve got to be earning money – we don’t have debtor prisons,” said Mr. Zucker. “We don’t take people’s license away because they don’t earn enough money to pay their debts, and I think RECO understands that as well.”

One of the ways Ms. Moazzani has tried to make money is through the trading of high-end luxury goods, though Mr. Zucker doesn’t believe that has been her primary source of income.

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On August 17, 2020, Ms. Moazzani and an associate, Seyed-Houman Mirmoghtadaei were sued by Florida-based Maison Prive LLC and its principals Jeffrey and Michelle Berk, who are seeking to recover three Hermes handbags worth US$61,000 and $176,035 in cash.

Maison Prive’s statement of claim asserts Ms. Moazzani and “Prince Ali” visited the Berks in their Florida home and in July, 2020, and proposed to sell them several high-end Rolex and Patek Phillippe watches worth more than $200,000 and also offered to trade a $55,000 Chanel handbag. The Berks allege they forwarded the cash and bags, but the watches and bag Ms. Moazzani promised were never produced.

In her counterclaim, Ms. Moazzani disputes the terms of the deal and describes a business relationship gone sour. Ms. Berk, formerly Michelle Braun, was convicted in a Florida investment scheme in 2013, and in 2009 pled guilty to federal money laundering and prostitution charges connected to the infamous Los Angeles “Nici’s Girls” escort service. She has also been barred from using social media to talk about the case as part of a defamation lawsuit brought by Ms. Moazzani.

Separately, in 2019, luxury retailer Birks Group Inc. brought a civil claim against Ms. Moazzani seeking $148,863 for breaching a contract to purchase a ring and borrow some earrings in 2018.

The condominium corporation at the Shangri-La (TSSC 2258) has become involved in this case because Mr. Berk’s Canadian lawyers allege that on August 22, 2020, former officers of the corporation interfered with a court officer’s attempt to serve an Anton Piller order (a type of search warrant for civil cases). The order was to search for and secure the property the Berks allege was being held in Ms. Moazzani’s apartment. On January 11, 2021, as part of contempt of court motion, Justice Jana Steele ordered TSSC 2258 to provide any video records or documents connected to the 12-hour delay in serving the order.

Ms. Berk lodged a criminal fraud complaint with Toronto Police against Ms. Moazzani and Mr. Mirmoghtadaei and, according to Mr. Zucker, Ms. Moazzani surrendered herself to police for booking but was not held in custody, and no trial date has been set. None of the allegations have been proven in court.

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Mr. Lusink notes that RECO may ultimately fail to get Ms. Moazzani’s license permanently revoked, and worries that stories of alleged fraud or unethical behaviour can tarnish the entire industry.

“We aren’t held to a high standard often enough,” said Mr. Lusink. “I think that’s where the real estate council of Ontario could do a much better job of enforcing the rules. [None] of these situations gets dealt with consistently on the RECO side. Some are issued a reprimand, some they say there isn’t enough here to go any further.”

Editor’s note: An earlier version of this article incorrectly referred to a six-month suspension. This version has been corrected.

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