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The licensees, managing brokers, and brokerage failed to do their due diligence in connection with a suspicious real estate transaction.
BCFSA has ordered two real estate representative licensees, two managing brokers, and a brokerage to pay discipline penalties and enforcement expenses totalling $302,000. The penalties follow an investigation that uncovered professional misconduct relating to the real estate services these parties provided to individuals who fraudulently sold a residential property in Richmond, B.C., in 2019 without the homeowner‘s consent.
At least two actors orchestrated the fraudulent transaction – one posed as the true owner and used a fake drivers’ licence to obtain a notarized power of attorney, and one posed as the attorney authorized to conduct the transaction. The fraud is the subject of separate civil proceedings.
The actors engaged the services of Pacific Evergreen Realty Ltd., a licensed real estate brokerage, to sell the property. Licensee Tracy Li was retained to sell the property and licensee David Yang, also of Pacific Evergreen Realty Ltd., represented the buyer. Managing brokers Annie Fong and Lo-Ming Lee at Pacific Evergreen Realty were responsible for supervising Li and Yang and addressing concerns and suspicions as they became aware of them.
While BCFSA determined that the licensees, managing brokers, and brokerage were not complicit in any fraud, BCFSA found that they failed to take reasonable measures at multiple points in the transaction. Li did not carefully verify identification documents, refrain from providing trading services until she received an executed power of attorney, or verify the validity of the power of attorney when suspicions of fraud arose, such as the rushed nature of the sale of the property. Li also backdated disclosure documents and a fee agreement, which obscured the actual order of events.
Yang failed to take steps to investigate the suspicious circumstances surrounding the transaction and advise his buyer client of all the suspicious circumstances known to him and the brokerage. Fong and Lee, as managing brokers, failed to properly supervise Li and Yang and to take sufficient steps to address the situation once it came to their attention.
“Licensees must uphold their professional obligations, even if they are under pressure from their clients. Those who neglect their professional responsibilities will face discipline, especially where there is consumer harm,” said Jonathan Vandall, Vice President Compliance and Enforcement at BCFSA. “The penalties reflect the severity of the licensees’ failure to meet their core responsibilities, including know-your-client obligations and duties to act honestly and with reasonable care and skill.”
The licensees, managing brokers, and brokerage are subject to the following penalties:
- Tracy Xiaomei Li and Tracy Li Personal Real Estate Corporation – must pay a discipline penalty of $100,000 and $7,000 in enforcement expenses. Li and Li’s Personal Real Estate Corporation licences require enhanced managing broker supervision for six months.
- David Chian Wei Yang and David C.W. Yang Personal Real Estate Corporation – must pay a $50,000 discipline penalty and $5,000 in enforcement expenses. Conditions are also placed on Yang and Yang’s Personal Real Estate Corporation licences, requiring enhanced managing broker supervision for one year.
- Lok Chi Annie Fong and Annie Fong Personal Real Estate Corporation – must pay a $50,000 discipline penalty and $5,000 in enforcement expenses, and are prohibited from being managing broker at any brokerage for six months.
- Lo-Ming Lee – ordered to pay a $50,000 discipline penalty and $5,000 in enforcement expenses. Lee is prohibited from being the sole managing broker at any brokerage for one year.
- Pacific Evergreen Realty Ltd. – ordered to pay a $25,000 discipline penalty and $5,000 in enforcement expenses, and to submit a compliance plan detailing its staff and licensees’ expected responses to suspicious or potentially fraudulent transactions.
In addition to penalties, enforcement expenses, and licence conditions, Li, Yang, Fong, and Lee must complete remedial education courses.
Find full details in the Consent Orders:
- Tracy Li & Tracy Li Personal Real Estate Corporation
- David Yang & David C.W. Yang Personal Real Estate Corporation
- Annie Fong & Annie Fong Personal Real Estate Corporation
- Lo-Ming Lee
- Pacific Evergreen Realty Ltd
Communications Manager, (778) 783-4057