Penny Torontow (source: Facebook)
The Real Estate Council of Ontario (RECO) is seeking to revoke the licence of a former Ottawa Real Estate Board president and her brokerage, following allegations she misappropriated sums totalling six figures from a trust account, including funds she later said were lost in an investment scam.
In a notice of proposal, the regulator alleges broker Penny Torontow and her firm, 1st Options Realty Ltd., carried out a series of improper disbursements totalling $161,000 in 2023 that created significant trust account shortfalls.
According to the notice, Torontow told a RECO investigator that funds from two of the three disbursements were directed to herself and lost as part of a financial investment scam she had personally fallen victim to.
Torontow, a longtime figure in the Ottawa real estate community who served as board president in 2022, has worked in the industry for nearly 25 years.
Three separate incidents
According to the notice, a RECO inspection launched in November 2023 identified three separate instances in which funds were improperly withdrawn from the brokerage’s real estate trust account.
The first occurred on or around March 31, 2023, when $70,000 was disbursed for purposes unrelated to a real estate transaction. The funds were transferred into the brokerage’s general account and withdrawn by bank draft, creating a shortfall that was not immediately replaced.
A second disbursement of $31,000 took place on or about April 21, 2023, prior to the scheduled completion date of a transaction. The notice alleges the funds were subsequently transferred and spent from the brokerage’s general account, contributing to a combined shortfall of $101,000. That shortfall was later replenished in May using funds transferred from an account not associated with the brokerage. No explanation was provided for this disbursement, the notice states.
The third incident, on or around Oct. 23, 2023, involved a $60,000 disbursement that was also unrelated to a real estate trade. The funds were transferred to the general account and largely withdrawn through a bank draft and other payments, leaving only a small balance. The notice further alleges the transaction was inaccurately recorded as a “transfer error” in internal reconciliation documents.
RECO alleges Torontow, as broker of record, authorized and facilitated all three disbursements.
Additional compliance issues, charges laid
The RECO inspection also identified other compliance deficiencies related to trust account management and record-keeping.
According to the notice, 1st Options failed to prepare required monthly trust account reconciliations in March and April 2023. As broker of record, Torontow was responsible for reviewing, signing and dating those reconciliations within 30 days, which did not occur.
The regulator also noted a $10,000 overpayment into the trust account that remained uncorrected for several months. Internal records for September and October 2023 listed the amount as a “miscellaneous outstanding” credit memo dating back to July, with the funds only transferred out of the trust account in late November.
Separately, RECO has laid provincial offences charges in connection with the findings of its inspection. The brokerage faces two counts under the Real Estate and Business Brokers Act, while Torontow faces one count. Provincial offences are non-criminal regulatory matters under provincial statutes and bylaws that are prosecuted in provincial court.
The charges were sworn on Nov. 10, 2025, and have not been proven in court.
Next steps
RECO says the alleged conduct gives it reasonable grounds to believe Torontow will not carry on business in accordance with the law and with integrity and honesty. The regulator is also seeking to revoke the registration of 1st Options Realty Ltd.
A notice of proposal is not a final decision. Torontow and the brokerage have the right to appeal to the Licence Appeal Tribunal within 15 days of being served and request a hearing.
“A hearing has been requested. As this matter is ongoing, I am unable to provide any further comment,” Torontow said in an email to Real Estate Magazine.
Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.
