An Ontario real estate agent has been ordered to pay a $50,000 fine after a discipline panel found she engaged in a “systematic plan” to misappropriate approximately $100,000 from her own client. The Real Estate Council of Ontario, or RECO, found that Mona Mohseni-Khalesi participated in a scheme with her spouse to sell an investment property without the knowledge or consent of her client, who was a 50 percent owner, and then lied to both the client and the regulator to conceal her actions. The panel described her misconduct as being at the “most serious end of the spectrum.”
The case dates back to an investment opportunity presented by Mohseni-Khalesi and her spouse to the client, identified in the proceedings as Complainant A. In October 2018, Mohseni-Khalesi acted as the real estate agent for a transaction in which her spouse and Complainant A agreed to purchase an investment property together, with each holding a 50 percent interest. However, Mohseni-Khalesi and her spouse later convinced Complainant A that his name needed to be removed from the Agreement of Purchase and Sale to secure mortgage financing. Complainant A agreed to this amendment, but only after being assured his stake would be protected by a Trust Agreement. This legal document, prepared by a lawyer recommended by Mohseni-Khalesi, explicitly stated that Complainant A retained a 50 percent beneficial interest and that the property could not be sold or otherwise disposed of without his written consent. The panel noted that Mohseni-Khalesi was fully aware of this agreement and its terms.
Following the purchase, to which Complainant A contributed his half of the closing costs, the partners agreed to renovate the property. Complainant A paid for half of the renovation expenses, as well as his share of the mortgage, property taxes, and other carrying costs. During this period, Mohseni-Khalesi and her spouse proposed moving into the property themselves while the renovations were underway, establishing an informal tenancy but refusing to sign a formal lease agreement when Complainant A suggested it. The evidence presented to the discipline panel included photographs showing Mohseni-Khalesi at the property during the renovations, confirming her knowledge of the work being done and the financial contributions made by her client.
In November 2017, after discussions between all three partners, Mohseni-Khalesi listed the property for sale. Despite listing it multiple times, she repeatedly told Complainant A there was no interest from potential buyers. Complainant A’s inquiries about the status of the listing were consistently met with negative responses or a lack of information, leading him to believe the property remained unsold. Eventually, communication broke down completely. After numerous unsuccessful attempts to contact Mohseni-Khalesi and her spouse by phone and text, Complainant A grew suspicious and took it upon himself to visit the local Land Registry Office to investigate the property’s status. There, he discovered the truth: the property had been sold in May 2018 without his knowledge or consent, in direct violation of the Trust Agreement. He later learned that he was owed more than $100,000 from the proceeds of the sale, which he never received.
After uncovering the sale, Complainant A filed a complaint with RECO. The regulator’s investigator found it difficult to schedule a meeting with Mohseni-Khalesi and ultimately requested a written response. In her May 2021 email to RECO, Mohseni-Khalesi made several statements that the discipline panel later determined to be false. She claimed she was not aware of the renovations, despite photographic evidence to the contrary. She also falsely stated that she had kept Complainant A fully informed during the sale process and had provided him with a copy of the final Agreement of Purchase and Sale. The panel found no evidence to support these claims. Mohseni-Khalesi did not attend the discipline hearing held on May 1, 2023, which proceeded in her absence.
In its decision released on June 19, 2023, the RECO panel found Mohseni-Khalesi had breached numerous sections of its Code of Ethics. The panel concluded she failed to treat her client fairly, honestly, and with integrity; failed to protect her client’s best interests; failed to provide conscientious and competent service; and failed to convey offers to her client. Furthermore, she was found to have knowingly made inaccurate representations to her client about the sale and used her position to participate in an unethical practice. The panel also found she made false and misleading statements directly to RECO during its investigation. Cumulatively, her actions were deemed to be disgraceful, dishonorable, and unprofessional conduct. The panel stated that Mohseni-Khalesi was instrumental in a scheme to deceive her client, starting with the amendment that removed his name from the title and culminating in the secret sale and misappropriation of funds.
Following the finding of misconduct, the panel convened again to determine an appropriate penalty. RECO’s legal counsel argued for a significant penalty, referencing a set of nine factors used to guide such decisions. These factors include the gravity of the breaches, the agent’s role, whether the agent gained financially, the impact on the complainant, and the need for both specific and general deterrence to protect the public and maintain confidence in the profession. The panel agreed with RECO’s submissions, noting that Mohseni-Khalesi had not provided any submissions of her own for the penalty phase.
In its final decision released on December 15, 2023, the panel methodically applied the nine factors to Mohseni-Khalesi’s conduct. It affirmed that the breaches were of the most serious nature, involving a deliberate and active scheme to mislead a client and misappropriate a large sum of money. The panel found her role was central, not peripheral, and that her actions were purposeful, not negligent. It concluded that she gained financially by keeping approximately $100,000 of her client’s money, causing him significant financial harm and forcing him to pursue separate legal action to recover the funds. The panel emphasized the need for a penalty that would serve as a strong deterrent, stating that Mohseni-Khalesi had taken no responsibility for her actions and had provided false information to avoid accountability. The penalty, it wrote, must be more than merely “the cost of doing business.” The panel also found her conduct to be “exceptional,” stating it was unaware of any other cases involving such premeditated and dishonest behavior by an agent against their own client.
Ultimately, the panel ordered Mona Mohseni-Khalesi to pay a fine of $50,000 to RECO within 90 days. She was also ordered to successfully complete, at her own expense, a course on ethics and business practices within 180 days. The panel did not make an order for costs. In its reasons, the panel stated that integrity is crucial and that it wished to send a strong message that the conduct displayed fell far below the acceptable standard and would not be tolerated.
Read more cases about proceedings in regulated professions here.
