A Greater Toronto Area (GTA) developer is in some seriously hot water -- and many buyers could be out of a future home.  

Earlier this week, rumours began swirling on Twitter and Reddit that mid-size Woodbridge-based home developer StateView Homes was running a fraudulent operation with its Markham townhomes. An anonymous Twitter account -- which has since been deleted but whose content still lives on Reddit -- tore into the developer with some seriously damming claims. 

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“A builder with a presold site for almost 150 homes in York Region is now confidentially selling the site & all 150 homebuyers will get deposits refunded & agreements cancelled,” reads the Reddit post. “Pretty sure they were ‘reservation agreements’ so they have zero legal value.”

The anonymous account claimed that the builder was “spending deposits like they were going out of style" and is now selling four or five sites, each with 150-300 pre-sold/reserved homes. 

At this point, it was just a rumour. However, the claims were proven true, when TD Bank filed a $37M lawsuit against StateView Homes -- including its former chief financial officer -- and associated corporations alleging that they operated a cheque-kiting scheme, calling the operation “highly sophisticated.” The bank alleges that this all went down between April 2022 and March 2023. 

Sophisticated or not, they were bound to get caught eventually. 

StateView was founded in 2010 by brothers Dino and Carlo Taurasi with (presumably former) friend and ousted chief financial officer Daniel Ciccone.

And now, in shocking allegations, TD claims that the developers wrote thousands of bad cheques for large amounts of money from 22 corporate and personal accounts at other banks, cashed the cheques into the TD account, then withdrew the funds before cancelling the cheque. So, the money wasn’t ever actually transferred into the TD account, resulting in the bank being left high and dry for a cool $37,028,055.73, plus interest.

STOREYS reached out to StateView for comment but did not receive a response. The company did, however, release a statement yesterday denying that the company was facing bankruptcy. The statement pointed fingers at StateView's former chief financial officer. "Upon the discovery, the chief financial officer was promptly relieved of his position with StateView Homes," it reads. The company says it was unable to comment until now.

"The investigation into these issues is ongoing and StateView Homes is working closely with affected parties to address it," the statement continues. "This has led to rumours and speculation around the solvency of the organization. At this time, StateView Homes is not declaring bankruptcy."

Still, things aren't looking promising. Toronto mortgage broker and real estate commentator Ron Butler says that some 1400 pre-sold units are at risk.

 “It’s bad for the homebuyers, but this wasn’t a big developer,” Butler tells STOREYS of the operation’s impact. “They should receive some Tarion coverage, but only to $100K.” Leading up to the now-public lawsuit, Butler says the purchasers likely just thought that their homes were delayed. “But so are some legitimate development projects.” 

In the meantime, StateView is trying to reassure its buyers. "Rest assured, StateView intends to complete all projects currently under construction and is actively working with our partners to move forward with as many projects as possible while also recognizing the position of our lenders," it says.

None of the allegations have been tested in court.

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