I swear, I was going to leave FINTRAC alone.
It’s always been on my list of pet peeves, and I’ve always wanted to rant and rave about it. But it’s one of those topics that the public just doesn’t care about. They have no sympathy for us lowely-Realtors, nor are they really interested in the topic to begin with.
But this week, the Toronto Star published an “investigative report” that essentially blamed Realtors for not doing more to stop terrorism, so I can no longer keep my mouth shut.
First, let me start from the beginning…
There are several documents that an individual must fill out and sign when transacting in real estate, as a buyer, seller, tenant, or landlord. For those of you that have been through the process, you know the drill.
If you’re a buyer, you sign a Buyer Representation Agreement, if you’re a seller, you sign a Listing Agreement. You’ll sign a Working With A Realtor document, and a few others will apply depending on the transaction. One form that everybody signs, however, is the FINTRAC Individual Identification Information Record, and this is the form I want to bitch about today.
FINTRAC is the Financial Transactions & Reports Analysis Centre of Canada.
The “Individual Identification Information Record” is an Ontario Real Estate Association Form that Realtors are required to fill out for every real estate transaction, as required by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
The document is four pages long – have a look in case you’re curious: FINTRAC Individual Identification Information Record
In practice, we are only required to fill out the first page, identifying our clients with their name, address, date of birth, occupation, and a piece of government issued identification, ie. passport, driver’s license, etc.
Why, in practice?
Because this form is ridiculous.
It’s government nonsense, a waste of taxpayers money, and a fantastic example of pat-yourself-on-the-back-bureaucracy.
In theory, we Realtors are expected to identify any potential money-laundering and/or terrorist financing, since money flows in and out of real estate all the time. But in reality, why the hell is this thrust upon us?
Now is the part where I lose some of you. “Cry me a river,” you might suggest, or those of you that work in banking or other financial industries will tell me that you have to work with FINTRAC as well, so I should shut up, and deal.
But I’m not complaning about FINTRAC because I don’t want to do it. It’s one form, and it takes ten seconds.
I’m complaining because I hate governmental waste, inefficiency, over-spending, bureaucracy, and make-work projects.
I hate when governments commission studies, start committees, put together panels, investigate, consult, fact-find, and use other action words, together with nouns meaning “groups of people who would otherwise not be working, who will now be paid in excess by the government,” simply to create new jobs, that serve to create more red tape and inefficiency, all at the expense of the taxpayer.
The federal government recently spent $500,000 on adveristing for a logo, name, and branding for a new agency whose goal is to eliminate poverty. Was that necessary? Or is it tragically ironic and hypocritical?
The federal government purchased 631 cars for the G7 summit at a cost of $23 Million, and is now trying to sell them off. Didn’t the government provide billions in bailout money to car companies? Couldn’t they do better than purchasing 631 brand new cars?
Who could forget the smirks on Justin Trudeau and Bill Moreanu’s faces when they mugged for the cameras with copies of the 2017 budget – the cover of which cost $212,000 to design?
Government waste is everywhere, and it shows no signs of stopping.
Of course, it bears mentioning that the federal Liberals stumbled into a $20 Billion windfall, and then when and spent it all. Spending is a whole other topic, and perhaps I’ll leave that for another day.
When it comes to FINTRAC, I see very little impact, and I see an incredible amount of government waste.
I understand the concepts of policing, national security, et al, and I’m not proposing we live in a lawless society. But I am suggesting that to spend a million-dollars to catch a one-dollar thief isn’t efficient, isn’t necessary, and isn’t fair to taxpayers.
If you ask the folks at FINTRAC, they’ll tell you they’re doing God’s work, just one day at a time.
Here is the press release for their self-congratulatory annual report:
I am pleased to share with you the 2017–18 Annual Report of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The report highlights the role that FINTRAC plays as part of Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime in helping police, law enforcement, and national security agencies protect Canada and Canadians.
Canadian businesses play a significant role in the global fight against money laundering and terrorist activity financing, and FINTRAC is responsible for ensuring compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. FINTRAC works closely with businesses and their associations to increase awareness and understanding of their compliance obligations under the Act. FINTRAC is committed to strengthening its support for Canadian businesses through reporting guidance and strategic intelligence assessments. In 2017–18, the Centre delivered 94 outreach presentations, training sessions, and consultations to help businesses understand their compliance obligations.
With the information that the Centre received from Canadian businesses across the country, FINTRAC was able to produce actionable financial intelligence relevant to investigating and prosecuting money laundering and terrorist activity financing. Over the past year, the Centre provided 2,466 disclosures of actionable financial intelligence in support the investigations of police, law enforcement, and national securities agencies, and contributed to 262 project-level investigations across Canada at the municipal, provincial, and federal levels.
The effectiveness of FINTRAC’s financial intelligence can be seen with Projects Protect, Chameleon, and Guardian. These unique and innovative public-private sector initiatives mobilize financial institutions, FINTRAC and Canada’s police and law enforcement to combat against trafficking in the sex trade, romance fraud, and trafficking of illicit fentanyl. These types of public-private sector initiatives are the first of their kind in the world and there has been tremendous interest internationally in understanding and replicating them.
Given the transnational nature of money laundering and terrorism financing, FINTRAC also works with foreign financial intelligence units. Through bilateral agreements, the Centre can disclose financial intelligence to more than 100 financial intelligence units worldwide when the appropriate threshold is met. These units are also able to share their information with FINTRAC, which broadens its analysis of international financial transactions. In the past year, FINTRAC provided 401 disclosures to financial intelligence units to assist investigations of money laundering and terrorist activity financing in their jurisdictions.
The impressive results that FINTRAC achieves for Canadians would not be possible without the tremendous knowledge, expertise, and dedication of FINTRAC’s staff, as well as the dedicated efforts of our partners, stakeholders, and businesses across the country.
That sounds great, right?
It sounds like our government, hard at work, protecting us from those who would do us harm.
But what do they really do? What impact do they really have? And what role do real estate agents serve in all of this?
Not too long ago, I attended a seminar where one of the speakers was, of course, discussing FINTRAC.
Suffice it to say, the speaker did not see any merit in the existence of the government body, did not understand why Realtors were expected to play a role.
Here’s a transcript of the speech, just to put an industry-spin on things…
The dictionary defines “White Elephant” as: “A rare and expensive possession that is of limited usefulness and is financially a burden to maintain”. That neatly sums up FINTRAC. The nice folks at FINTRAC cost Canadians over $50,000,000 a year, while trying to turn hundreds of thousands of us into amateur spies, helping them weed out terrorists and money-launderers.
In order to justify its existence, FINTRAC sends out news releases when its “hard work” has aided in the apprehension of some criminal. I am on their email list, so I receive the releases. Very few come my way, which isn’t surprising. However, occasionally I get one, as I did on May 23rd of this year. Here are the details:
“The Nova Scotia RCMP has charged three Shelburne County men following a 22-month investigation into allegations of LOBSTER THEFT AND FRAUD TOTALLING APPROXIMATELY $3,000,000.00.” The report goes on to say that; “Nova Scotia’s economy and seafood industry could have been negatively impacted.”
The investigation involved the RCMP, Fisheries and Oceans Canada, The Canadian Food Inspection Agency, Canada Revenue Agency, FINTRAC, Forensic Accounting Management Group, the Nova Scotia Department of Fisheries and Aquaculture, and the Yarmouth/Clare Street Crime Enforcement Unit comprised of members from Yarmouth Town, Rural and Meteghan RCMP detachments.
You will be glad to know that the three accused lobster fraudsters were released into the community pending trial.
Some questions arise:
1. Did the evil-doers plan to use the lobsters in terrorist attacks?
2. Does boiling a lobster constitute “laundering”?
3. Did the investigation cost more than the alleged $3,000,000.00 in theft and fraud?
4. What was the key role that FINTRAC played in helping detect this nefarious shell game?
In an Operational Brief provided by FINTRAC in November of 2016, it was disclosed that, in the first ten years of FINTRAC’s existence, about 5 Million MLS transactions had occurred in Canada. That is 10 million “ends” in Realtor language. Assuming that each end involved only one consumer, that means that Realtors had to “FINTRAC” 10 Million people during those ten years.
FINTRAC reports that Realtors filed 127 “Suspicious Transaction Reports (STRs)” in those 10 years. That means that one in every 78,740 ends resulted in an STR. The average Realtor does 5 ends per year. Therefore, the average Realtor can expect to file an STR every 15,748 years! (78,740 divided by 5).
Using the same numbers, a salesperson doing 100 deals a year can expect to file an STR every 787 years!
Recognizing that practice is required to master a skill, nobody in the Realtor community gets enough experience in dealing with suspected terrorists and money-launderers to be able to detect them. We have CSIS, the RCMP and a whole lot of other tax-gobbling professional organisations peopled by staff trained in crime detection. Leave the job to professionals and stop trying to turn us into amateur spies.
I raised these issues when I was on the CREA Board of Directors, and asked many times that we lobby for the elimination of FINTRAC rather than simply trying to “improve” it. Unfortunately, I found that CREA is dominated by staff who don’t want to rock the boat. Therefore, the Board of Directors spent lots of time studying “leadership” and “governance” while doing very little that qualifies as leading or governing.
If we are to be respected by others (and ourselves) we need to raise our voices when we see that something is wrong. Unfortunately, our elected representatives, particularly at the national level, prefer to remain silent.
More complaining about FINTRAC from those in the real estate industry, right?
Well as I said, I wasn’t going to blog about this topic, nor share the above thoughts of an industry veteran, until earlier this week when I saw an article in the Toronto Star, that basically took the above statistics, and suggested that Realtors aren’t doing enough to stop crime.
Here’s the article in its entirety:
“Toronto Real Estate Is Vulnerable To Money Laundering”
By: Marco Chown Oved
Investigative Reporter
Toronto Star
Wednesday, November 28th, 2018
Toronto’s booming real estate market is vulnerable to money laundering because real estate agents aren’t notifying authorities of suspicious property transactions, leading the national anti-money laundering agency, FINTRAC, to step up its audits of the industry.
Real estate agents are required by federal law to file “suspicious transaction reports.” From 2013 to 2017, there were more than 2.5 million real estate transactions in Canada, according to the Canadian Real Estate Association. In that same five-year period, real estate agents and developers made only 197 suspicious transactions reports.
I’m sorry, but I can’t read this and not comment.
This might sound like sour grapes, but I can’t handle the idea that “real estate agents aren’t notifying authorities of suspicious property transactions.”
It’s just not that simple.
The idea that “the national anti-money laundering agency will step up its audit” is also not that simple.
And with respect to my dear friend and colleague, John Pasalis, who was quoted in the article above, and for whom I have a tremendous amount of respect (and was compared to by a reader the other day for our penchant for providing free data and analysis, and speaking the truth), this isn’t about agents protecting commissions. That’s a sexy answer, a sound-byte guaranteed to go to press, and exactly what the government wants people to think. For an MP to suggest “We want to stop those using the real estate industry for ulterior motives,” is dangerous, and unprofessional, as it’s based on absolutely zero evidence. It’s Trump-esque, to say the least.
So what are the issues here with respect to the role of agents in all of this, and the idea of stepping up audits?
First and foremost, since when, and why, are real estate agents expected to narc? To run to the neighbourhood Gestapo and tell tales?
This is such a glamorous story in the making, right? A bunch of right-wing or left-wing extremists, or Satanists, or balaclava-wearing bad guys driving a white cube-van with the windows blacked out, are all planning mayhem, and yet all it took was a local Realtor from Sudbury to fill out a piece of paper, and submit it to a government agency who probably wouldn’t do anything with it for months, to thwart a national disaster.
That’s a really lame made-for-tv movie on Lifetime or WTN, starring John Stamos and the mother from Who’s The Boss.
In terms of what is considered “suspicious,” do you realize what age we live in?
Free speech is gone, the lowest-common-denominator rules, and political-correctness has run amok. And yet Realtors are expected to report “suspicious” people? According to what standards and guidelines?
Let me spell it out for you, in 2018 when nobody wants to say boo: a Chinese, Russian, or Middle-Eastern person buys a house with a cheque drawn on a company account. Is that “suspicious?” Or is that racist?
I honestly don’t know.
But by some standards, tens of thousands of transactions are suspicious. And by political-correctness standards, zero are. Everybody is the same, and judgment, generalizing, and type-casting have no place in society.
So who am I to run to the FINTRAC Gestapo with a “suspicion?”
As for the FINTRAC “audits,” I’m about to laugh myself into a coma.
Do you know what the FINTRAC-folk find when they audit our paperwork?
The conversation goes something like this:
Fintrac: “What country did this transaction take place in?”
Us: “Um, Canada. Why?”
Fintrac: “Because it simply states ‘123 Smith Street, Toronto, ON, M4S 1A9,’ but there is no country. We need the country.”
Us: “Sure, no problem.”
That’s a real critique from FINTRAC, folks. I’m not making this up.
Here’s another one from our audit:
Fintrac: “Regarding 123 Smith Street, what type of high school teacher is Mr. Doe?”
Us: “Well, it says there he’s a teacher.”
Fintrac: “Right. We need to know if he’s a public high school teacher, or a private high school teacher?”
Again, not making this up.
This is a FINTRAC audit.
These are not members of C.S.I. Miami digging through boxes with halogen lights and luminol, looking for hair follicles and trace-DNA. These are bureaucrats attempting to justify their existence, and unless somebody lists “Terrorist” as their occupation, these audits serve no purpose.
So I’ll continue to fill out the FINTRAC forms as required by the law.
I’ll continue to pay an income tax rate tantamount to state-sponsored larceny, so that the government can continue to spend our money as they see fit.
But don’t write nonsense like what I saw in the Toronto Star the other day.
It’s not my job to catch bad guys.
Carl
at 9:04 am
Speaking of elephants, money-laundering is an elephant in the real-estate room. Some people want to believe that it does not exist. The B.C. government is finally waking up to it. Let’s hope that Ontario will follow. The Globe and The Star are doing a great job bringing it up in the open.
It’s good on John Pasalis to admit that money-laundering in RE is a problem, unlike the claim of “zero evidence” in today’s blog.
Chris
at 9:07 am
“Zero evidence” is a ridiculous assertion.
As Carl mentioned, here’s some evidence:
https://globalnews.ca/news/4658157/fentanyl-vancouver-real-estate-billion-money-laundering-police-study/
Daniel
at 10:19 am
And you guys think that it was the one-pager fintrac doc that realtors fill out that brought down the fentanyl ring???
Chris
at 10:26 am
Please point out where either of us stated anything to that effect, Daniel.
For David to state that there is “zero evidence” of criminals “using the real estate industry for ulterior motives”, when the RCMP report linking fentanyl trafficking, Chinese organized crime, laundered money and Vancouver real estate was reported on only days ago, well frankly, it is absurd.
If anything, FINTRAC should be made tougher and enforced more heavily. Another comment I made (I believe awaiting approval) discussed how Canada is widely seen as an international laggard when it comes to preventing money laundering:
https://www.economist.com/business/2018/01/04/canada-frets-about-anonymously-owned-firms
“With not a palm tree in sight and a reputation for being boringly well-run, Canada is an unlikely haven for crooks and tax avoiders. But it has long had a reputation as a place to snow-wash money. In 2009 the national police force estimated that up to C$15bn ($12bn) was being laundered in the country each year”
Chris
at 9:04 am
Curious, your blog post is on FINTRAC and money laundering through real estate, and yet you chose to omit the other big recent stories on the topic:
https://globalnews.ca/news/4658157/fentanyl-vancouver-real-estate-billion-money-laundering-police-study/
“Both mansions appear on a list of more than $1-billion worth of Vancouver-area property transactions in 2016 that a confidential police intelligence study has linked to Chinese organized crime.
The study of more than 1,200 luxury real estate purchases in B.C.’s Lower Mainland in 2016 found that more than 10 per cent were tied to buyers with criminal records. And 95 per cent of those transactions were believed by police intelligence to be linked to Chinese crime networks.
The study findings, obtained by Global News, are a startling look at what police believe to be the massive money laundering occurring in the Vancouver-area real estate market.”
If anything, I would hope FINTRAC would be strengthened. Canada is an international embarrassment when it comes to preventing money laundering.
https://www.economist.com/business/2018/01/04/canada-frets-about-anonymously-owned-firms
“With not a palm tree in sight and a reputation for being boringly well-run, Canada is an unlikely haven for crooks and tax avoiders. But it has long had a reputation as a place to snow-wash money. In 2009 the national police force estimated that up to C$15bn ($12bn) was being laundered in the country each year”
Jackie
at 10:27 am
“In theory, we Realtors are expected to identify any potential money-laundering and/or terrorist financing, since money flows in and out of real estate all the time. But in reality, why the hell is this thrust upon us?” The cashiers at casinos can say the same thing, which in BC they were apparently thinking the same thing.
Banks have mandatory annual training on AML and terrorist financing for every single employee, regardless of position. It should be a requirement for real estate brokerages to provide this training to their employees so that they can understand why this is done and tips on identifying suspicious transactions, because this is a lack of understanding on David’s part. If this is too cumbersome for brokerages, FINTRAC should just mandate a $ threshold for cash transactions and deposits that MUST be reported like they do for casinos to eliminate accusations of racism or profiling.
Not Harold
at 11:51 am
Banks don’t take money laundering seriously, and they have far more data that would be useful to detect questionable transactions than Real Estate agents.
FINTRAC, as mentioned above, doesn’t make good use of that data that it has. They don’t have the right investigators, they don’t have the right technology, and the penalties in the few prosecutions that do happen are derisory.
What we get is useless box ticking and idiotic questions from mall cop level employees.
But then we have compromised politicians that denounce you for racism when you bring up that they are agents of China’s MSS.
We also have all sorts of brokers that are violating existing laws on dealing with clients, handling money, etc. Not just in Vancouver either – all across GTA from every ethnicity.
You can have smart rules that are well enforced and effective, or you can have lots of dumb rules that make it look like you’re doing something but not dealing with the issue. Right now we have the latter – there’s a very popular trend in politics supported by the last Ontario government and the current Federal government where it matters far more how you pose than what you actually accomplish. Whether it’s rent control, carbon usage, or money laundering, the policies are pose not effective plans.
Alexander
at 6:28 pm
Totally agree, banks are the one that should be doing this job together with CRA and RCMP.
Kyle
at 11:52 am
Totally agree with the above.
Funny thing is the posing and window dressing often does more harm then good. By enforcing mandatory Anti Money Laundering training, the government has basically given criminals and anyone they may be colluding with inside the financial system, a handy “how-to” guide on laundering money and avoiding detection.
anonymous
at 10:50 am
I kind of see where David is going with all this. The problem to be quite honest is in Vancouver, and it’s a Chinese problem. Selling condos in Toronto to kids out of university doesn’t fall into the same category of risk.
Nobody wants to point out that it’s Chinese agents representing Chinese buyers, in a highly Chinese area in B.C. Thankfully I’m posting anonymously with a fake email!
But this goes way beyond real estate agents. I agree with those above that have suggested this is due to our naive and childish federal representatives who act like it’s 1960, and ignore the complex world we live in today.
But I also agree with David when it comes to the narc aspect of all this (Gestapo reference was ballsy) and I wonder if the RCMP and local police in each jurisdiction wouldn’t be more suited to handle this than realtors.
Derek
at 10:54 am
What a can of worms! Do you think there is any role for real estate agents to play in reducing money laundering through real estate?
Chris
at 10:57 am
As Jackie stated above, if casino cashiers and bank tellers are obligated to undergo Anti-Money Laundering training and report suspicious transactions and those above $10,000, I see no compelling reason why real estate agents should be exempt.
David Fleming
at 11:24 am
@ Chris & Jackie
I have never, in 14 years, and through 800 transactions, received CASH as a deposit. Not once.
If I received $100,000 in a gym bag, you’re goddam right I would fill out the FINTRAC form.
But this doesn’t happen, save for cases, and via people, described above…
Chris
at 11:40 am
And yet money laundering is not always as brazen and obvious as what was displayed at the River Rock Casino is BC, with stacks of cash being carted in in hockey bags.
My point is that, if cashiers and tellers handling $10,000 (whether cash, cheque, or other) are required to undergo training and report transactions, why would we exempt real estate agents, who facilitate deals of significantly greater values?
I appreciate it’s not your job to catch bad guys, but when criminal gangs are trafficking fentanyl, which is killing thousands of Canadians, and then laundering the proceeds through real estate (as evidenced in BC), I don’t think it’s unfair that a few forms be filled in.
That being said, I do agree that audits and enforcement should be stepped up, so they are more effective. The fact that charges have been stayed in the RCMP case on casino money laundering is disgusting and very discouraging.
Derek
at 1:04 pm
Are there any real estate transactions anywhere that do not exceed $10,000? What would an agent report about every single transaction over $10,000?
Chris
at 1:28 pm
They would presumably fill in the FINTRAC reporting forms, as they’re already supposed to do.
Instead of just asking rhetorical questions left, right and centre, Derek, maybe you could try thinking about if an answer to them is already staring you in the face.
David (Not the David who runs this website)
at 1:12 pm
David, if you’re in a situation where you get $100,000 in a gym bag, don’t you think it would be wise to decline to deal with that client and stay the hell away from them?
Do you think that people who actually have that kind of cash are going to let you fill out a form and send it in with their all their personal details on it? It wouldn’t end well and that’s putting it mildly.
If you work in a financial institution, they have the resources and connections to deal with this sort of thing without putting individuals at risk, where as a real estate brokerage and it’s staff don’t.
Derek
at 1:53 pm
Gee thanks Chris. The host with his experience is claiming the system is broken or nearly useless from the agents’s perspective. I understood you to say that agents should report all transactions over $10,000 through Fintrac, delicately resisting your urge to end with, “you moron!” lol. I was expressing wonder at how that would help anything (because every RE transaction would qualify). You will see that I asked David his opinion on what role agents should have on the issue because I am curious for his views and the answer is not staring me in the face. Feel free to not answer my questions if they bother you. cheers.
David Fleming
at 1:55 pm
@ David (Not the David who runs this website)
You are correct, in that situation, which I have never been in, and would never expect to be in, where the buyer has a $100,000 deposit in cash, in a gym bag, I would advise my clients to stay away. Even in a down market, I would still think the situation reeks.
Something not mentioned: what about if/when crypto-currency comes into play?
Chris
at 2:29 pm
You seem to have incorrectly understood my statements, Derek.
What I said was that, given that even casino cashiers and bank tellers are obligated to report transactions over $10,000, I feel it is eminently reasonable that real estate agents, as licensed professionals, be obligated to fill in the FINTRAC reporting documents, regardless of the transaction value. Yes, every real estate transaction is going to be greater than $10,000; hence why we have this reporting responsibility placed on real estate agents.
While David seems to assert that these do nothing, this is, in my opinion, an argument for strengthening FINTRACT, not abolishing the reporting requirements altogether, because they seem to serve no purpose from his perspective.
Also, how very magnanimous of you to forego calling me a moron on account of your lack of understanding, only to do so in a follow up post.
Chris2
at 10:57 am
I would be interested to know if money laundering through real-estate is facilitated by realtors that are:
A) 100% complicit in the scheme
B) Not directly involved in the scheme, but look the other way at all of the red flags
C) totally unaware that the transaction they just facilitated was for money laundering purposes
If the answer is more A and B then asking realtors to report suspicious transactions is in practice, a waste of time as mentioned in the Toronto Star article.
Chris
at 11:08 am
I suspect it is mostly B and C.
I mean, just look at the incentives; you’re a real estate agent paid on commission. Someone wants to employ you to purchase a home, and there are some red flags around the source of their finances. So you can either judiciously fill in the FINTRAC forms, report them to the authorities, and risk alienating (or worse) your client and earning no commission.
Or you can just keep your head down, not raise a stink, take your commission and move on. Gee, I wonder which one most people are going to go with, especially when the punishments doled out to real estate agents who break the rules are typically so minuscule they may as well be a cost of doing business.
As an aside, thanks for going with the name Chris2; been seeing you post the past little bit and wondering how to differentiate my posts!
Derek
at 11:14 am
By what indicator could a real estate agent know the source of the money backing a deposit cheque or closing cheque? That is, what factors would a real estate agent recognize to give rise to a suspicion that proceeds of crime are being used?
Dave
at 1:03 pm
David – This is not your best post…
1. You are expected to “narc” because you are a licensed professional. People who enjoy the benefits of licensure have certain obligations to the public. Just like doctors and teachers (who have to look out for abuse, etc.), lawyers (who have to look out for money laundering and other crime), licensed businesses, etc.
2. Anti-money laundering rules work in many ways. One important way they work is by discouraging money launderers from using financial systems where they might be caught (i.e., deterrence). In other words, the mob ceases to use real estate to launder money (or launders less money through real estate than they otherwise would) due to the rules. You mock FINTRAC (which is deserving in some respects), but don’t confuse the inadequacy of certain forms and audits with total ineffectiveness.
3. “Free speech is gone, the lowest-common-denominator rules, and political-correctness has run amok.” Really? That’s your actual argument? And how does this relate to FINTRAC, which is simply a regulatory matter? The reactionary components of your blog posts add little to nothing to anyone’s understanding of the actual issues you write about. They are also, in my view, usually pretty silly.
I think the main criticism of FINTRAC that can be made is that it doesn’t work well enough, and to detail the reasons why that is the case. This post misses the mark, although some commentators have hit the mark.
Chris
at 1:33 pm
100% agree with all of your points. As I stated in a previous post, FINTRAC and related enforcement should be toughened, rather than scrapped as this blog post seems to be suggesting.
Glad to see so many others taking issue with this blog post as well. Money laundering is a serious issue.
Lauren
at 8:22 pm
I disagree. I think David’s best posts are the ones that result in the most engagement. Just because you disagree with David doesn’t make it a bad post, otherwise everybody would be reading your blog. And if David was simply trying to write content that the most people agree with then it would be boring, unauthentic, and everything TRB is not.
Chris
at 10:38 pm
I didn’t state it was a bad post; Perhaps you meant to reply to Dave?
I stated that I was glad others took issue with the overarching tone of “forget FINTRAC”. Combatting money laundering and organized crime is worth while.
Professional Shanker
at 1:04 pm
David, simple question then, if you are an MP and your task is to stop those using real estate for ulterior motives, how do you go about this spending little to no money and not “creating” waste as you state.
First, I hope would be to gather data on if it’s happening in order to determine if it is an issue – that will cost money though. Who can you trust to provide this data – the Real estate industry independently knowing where their bias may lie?
I get your beef but to me basically you are saying the government should do nothing in all instances – that is really the only way to cut the waste as you state. Anything above nothing will be a costly affair which I am sure you can appreciate.
J
at 2:19 pm
“But I am suggesting that to spend a million-dollars to catch a one-dollar thief isn’t efficient, isn’t necessary, and isn’t fair to taxpayers.”
If the enforcement only catches one one-dollar thief, but deters a million other one-dollar thieves, then it can be deemed worthwhile. I’m not saying there isn’t any room for improving waste or inefficiency, but the deterrent aspect of enforcement has some value.
Jackie
at 3:46 pm
I wish there was a like or thumbs up button. This is similar to police patrols (which is also controversial). Police maintaining a presence in a community is a deterrent for crimes, even if the only people they arrest are shoplifters.
Condodweller
at 11:10 am
This is a very good point. While I was reading this blog all I could think as while we are at it why don’t we just get rid of the police. They are costing us billions. That’s more than they’re worth right? Wrong. It’s all about the value of deterring.
Kyle
at 3:11 pm
“The common link among them is an underground banking scheme in which Chinese VIP gamblers and gangster associates secretly transfer money between China and Richmond, B.C., in order to fund fentanyl imports and trafficking in Canada.”
Here’s where they should stick their FINTRAC.
Yes, criminals buy stuff with dirty money, but if you actually want to know where the dirty money came from, then instead of asking everyone when they try to spend it (and naively hoping they’ll be honest), doesn’t it make more sense to you know….see where the dirty money actually came from?
Chris
at 3:26 pm
http://www.fintrac-canafe.gc.ca/reporting-declaration/rpt-eng.asp
See the sections on Electronic Fund Transfers and Cross-border Currency or Monetary Instruments Reports. FINTRAC already requires reporting of money coming into Canada. If you bring more than $10,000 into Canada on your person, it already must be declared to the CBSA.
The RCMP and Bill Blair have already been directed by Prime Minister Trudeau, to investigate illicit currency flows and money laundering. Hopefully enforcement of this will become tighter, and prevent or at least reduce dirty money entering our country. China’s crackdown on capital outflows certainly won’t hurt either.
Further, FINTRAC isn’t asking criminals to provide their information in the naive hope they’ll be honest. It is asking those facilitating the transaction, particularly in licensed and regulated professions (accountants, real estate agents, financial institutions, notaries, etc.) to report on these activities, should they encounter them. Follow the link above to the “reporting entity” section to see the full list.
Maybe the criminals will lie to the reporting entity? Maybe the reporting entity will lie on their behalf? But again, this is a reason to tighten enforcement, rather than discard the entire system. Plus, as Dave argues above, there is a deterrence factor to this reporting obligation.
Derek
at 3:40 pm
Chris, I was making a joke, commending you for resisting the urge to call me a moron; I was not calling you a moron. No need to call me a magnum ass. Peace.
Chris
at 3:50 pm
That’s my mistake; I incorrectly interpreted your comment as you resisted the urge to call me a moron.
I apologize. I was curt with you because of how I read your comment. That was unfair of me.
daniel b
at 10:03 am
this is the internet chris, no place for apologies or reasoned arguments…
Kyle
at 4:21 pm
I’m well aware of how Fintrac works. The question is, is it effective?
To my mind, it is not. And it is not because it is not being applied too weakly or without enough zeal. It is because they fundamentally are focusing on the wrong transactions. At some point dirty money needs to enter the system (i.e. it needs to be converted from cash to electronic funds – that’s what laundering is). That’s where you need to be catching it. Like David said people aren’t shopping for houses with gym bags full of cash, except maybe in Richmond B.C. But if it’s a Richmond BC problem, where the RCMP apparently also know “The common link among them is an underground banking scheme”, then how is toughening FINTRAC rules on every single property transaction across Canada, a more effective solution, than say, busting down said underground banking scheme?
Do we seriously think that the Fintrac rules act as a deterrent to criminals? Do we seriously believe criminals are dishonest enough to do crimes, but too honest to lie about the sources of their funds? Do we seriously think criminals who are smart enough to run rackets are too dumb to move money in amounts less than 10K, or too dumb to find ways to allay suspicions.
Once dirty money it is in the system it’s too late, anything they do after that is nothing more than window dressing.
Jackie
at 3:54 pm
Oh my, this comment is why anyone handling large dollar transactions should be required to take AML training.
One method of passing detection is to break up large dollar deposits into medium ones and have several different people deposit the money at different institutions. Now imagine there were several banking institutions in another country that already assisted people in doing this to get money out of the country on a regular basis. Where they are actually charging fees for this. Do you think that service is not prime for organized crime to manipulate and use to funnel money in and out of that country?
Kyle
at 4:46 pm
Honest question, a baddie has an account with $1M that was accumulated through a bunch of much smaller deposits. He then writes a certified deposit cheque on a house. How exactly is AML training supposed to help the Realtor know this was dirty money?
Kyle
at 4:22 pm
I’m well aware of how Fintrac works. The question is, is it effective?
To my mind, it is not. And it is not because it is not being applied too weakly or without enough zeal. It is because they fundamentally are focusing on the wrong transactions. At some point dirty money needs to enter the system (i.e. it needs to be converted from cash to electronic funds – that’s what laundering is). That’s where you need to be catching it. Like David said people aren’t shopping for houses with gym bags full of cash, except maybe in Richmond B.C. But if it’s a Richmond BC problem, where the RCMP apparently also know “The common link among them is an underground banking scheme”, then how is toughening FINTRAC rules on every single property transaction across Canada, a more effective solution, than say, busting down said underground banking scheme?
Do we seriously think that the Fintrac rules act as a deterrent to criminals? Do we seriously believe criminals are dishonest enough to do crimes, but too honest to lie about the sources of their funds? Do we seriously think criminals who are smart enough to run rackets are too dumb to move money in amounts less than 10K, or too dumb to find ways to allay suspicions.
Once dirty money it is in the system it’s too late, anything they do after that is nothing more than window dressing.
Chris
at 4:41 pm
I will readily admit that I am not intimately familiar with FINTRAC; yet Jackie seems to be, and she is questioning your knowledge on the subject, Kyle.
Yes, dirty money should be stopped at the source, and it seems as though the government is working on this. But steps should also be taken to identify illicitly obtained money at other points in the system. We shouldn’t focus exclusively on the entry point or underground banks, and neglect all other possible avenues. This isn’t an either-or proposition; we can target multiple areas at once.
An additional small side point, money laundering is not exclusively the practice of turning cash into electronic funds. It is converting illegally obtained money into ostensibly legitimately acquired assets. Taking the BC River Rock Casino example, turning duffel bags of cash into casino “winnings”. Whether in hard currency, or in a bank account, the criminal can now say that this money was not illicitly obtained, but was won through gambling at the casino, all because it was not reported when it was brought into the casino. Yes, I’m nitpicking, but oh well, you should expect that by now.
You seem to once again be asserting that FINTRAC is entirely reliant on criminals being honest. It is not. It is placing an onus on professionals who facilitate transactions to report, which may then trigger further investigation of their client.
It may be more difficult to catch dirty money once it’s in the system, but that does not mean we should throw our hands up and capitulate. Tighten scrutiny of money coming into the country, tighten scrutiny of suspected money laundering methods, and tighten reporting and audits of suspicious transactions. Then perhaps “snow-washing” will become less common a practice.
Kyle
at 4:55 pm
I’m not entirely asserting that it relies on criminal honesty. If you re-read my comment, you’ll see it also relies on an inconceivable amount of criminal stupidity.
But again i ask the question, is it effective? If it isn’t effective (which as far as i’m concerned no one has provided any solid evidence that it is), then it absolutely is an either or situation, because to David’s point if you have a limited amount of money to spend (which i think we can all agree describe taxes) then you should be spending money doing what is effective (i.e. catching it before it enters the system) and stop wasting time and money on the window dressing.
Chris
at 5:29 pm
https://www.cbabc.org/Sections-and-Community/Business-Law/Business-Law-Quarterly/Business-Law-Quarterly-Archives/Q2-Current-Issues-in-Anti-Corruption-and-Money-Lau/On-our-doorsteps-Money-laundering-in-Canadian-real
We should increase scrutiny and enforcement on all fronts, eliminate opaque ownership structures, and conduct more audits of suspicious transactions. Not only will this help catch criminals, it will deter others. This multilayered approach is put forward by Transparency International Canada as the way to fight snow washing.
Kyle
at 9:46 pm
This article offers zero evidence that AML and Fintrac are effective tools at preventing money laundering. Lots of assertions, but the example they use of Kenny Gu wasn’t even a case of money laundering.
Chris
at 10:34 pm
Transparency International Canada is a reputable source and well placed to make suggestions to effectively fight money laundering.
If their report states that FINTRAC compliance from real estate agents will ameliorate the situation, I’m inclined to believe them.
Angela
at 7:21 pm
Well, David was right about one thing: he knew he would take flak for this post!
Carl
at 8:27 pm
I am greatly puzzled by the excited arguments. John Pasalis says that RE professionals are not motivated to participate in catching money launderers. David Fleming says it’s not his job to catch bad guys. So the two of them essentially agree.
I also don’t understand the objections to the OREA Form 630. Surely the least the RE brokers can do, as their contribution to the rule of law, is to verify that their clients are who they say they are, and to document that they have done it.
You cannot say at the same time that money laundering in RE is a fiction, and that FINTRAC doesn’t work. If FINTRAC doesn’t work, it means that it’s missing a lot of criminals out there. To make it work better in the RE space, the investigators have to know the identity of the buyers and sellers to begin with. That’s what the Form 630 is for.
Cyber
at 9:07 am
David, are you suggesting that the issue is the paperwork and waste of time and resources? And that MOST real estate agents, especially in Vancouver and Toronto, would not mind at all if cash purchases of real estate were subject to bank grade KYC / AML?
So if there was a new “regtech” solution that does this quickly, digitally and at a fraction of the cost, including beneficial ownership search for your “company cheque” example, it would be welcomed with open arms by the real estate agents?
While I can see how you personally could welcome it, I am not so sure about industry at large.
Fools Errand
at 5:28 pm
I can’t believe that so-called “political correctness” (i.e. liberals/progressives acting like idiots, according to conservatives/rednecks) has had such a long shelf life. Guess it’s not only “Faux News” that’s keeping angry white guy issues alive.
By the way, THE WAR ON CHRISTMAS !!!
Oh Please!
at 6:31 pm
Is political correctness a myth?
This is by far the worst comment on here. Downright scary.
The world we live in today. Yeesh.
Bubble wrapped and gagged at the mouth.
I’d hate to be in a Realtor’s shoes trying to justify why you reported Akmed Mohamed or Xing Xu to FINTRAC.
See how PC is a myth then.
Whaaa?
at 9:08 pm
War is scary. Famine is scary. Fascism is scary. Earthquakes are scary. Many, many, many things are genuinely scary. Get a grip, man.
Joe Btfsplk
at 9:21 pm
Hey, Oh Please, do you live in Soweto? The Gaza Strip? Haiti, perhaps? Syria? Sudan? East Timor? No, of course you don’t. You’re a comfortable Canadian bitching about bull**** that means less than nothing to people who know what real suffering is.
Alexander
at 6:22 pm
“and unless somebody lists “Terrorist” as their occupation, these audits serve no purpose”
Hilarious and priceless! Monty Python time!
2Cents
at 7:55 pm
Why is it that all the naysayers here chose to ignore the details of the FINTRAC audit as described by the author? Flexing government muscle by suggesting a comma should go here, and a name is misspelled here; this is a reasonable discussion point, no?
But people chose to skip over the ONE point in this story that describes actual interaction with FINTRAC on the issue at hand.
My experiences with government oversight are similar. I’m my industry I find they are always reactive, never provide any true leadership, and simply show up with a clipboard looking to tick boxes, flex some muscle, and move on. I tend to take this author here at his word and that should change the overall tone of this debate.
Kyle
at 6:37 am
Great observation. The reason is because they don’t have any good counter-arguments to make on that point, so instead are trying to make it about – crime is bad, if you don’t support this than you are bad.
David’s questioning the value of Fintrac for real estate transactions in its current form. And i’ve yet to see any good counter arguments to that either. Instead i simply see lots of people bashing him for being on the “wrong side”.
As for AML training, anyone who has ever had to watch one of those videos can tell you they are a far better training guide for criminals and their associates than they are for training everyday folks how to prevent money laundering.
Chris
at 10:07 am
That is incorrect, Kyle. Many posters have presented counter-arguments beyond just “crime is bad”.
David questions the value of FINTRAC based on his perception of it. He claims their audits do nothing and cites two examples of them following up on some incomplete information of questionable importance. Are we truly to believe this is the full extent of their investigative efforts? And that David, a real estate agent, has a complete picture of the work that FINTRAC and related organizations do?
He then claims that increasing enforcement, such as through stepped up audits is not so simple, and that catching criminals is not his job. The implication is clear and indicated by the title of the blog post; forget FINTRAC, stop making real estate agents fill in paperwork about transactions. David is not just questioning it, he’s proposing abolishing it.
And yet, a 2016 operational brief by FINTRAC explains clearly that real estate is a “large and susceptible market” to money laundering, and that “the exploitation of real estate by criminals for money laundering purposes is well recognized internationally and underscores the importance of quality reporting on relevant suspicious transactions.”
http://www.fintrac-canafe.gc.ca/intel/operation/real-eng.asp
A 2015 Assessment of Inherent Risks of Money Laundering and Terrorist Financing in Canada by the Department of Finance found that “The products and services offered by real estate agents and developers provide opportunities to criminals and money launderers.” Real estate agents and developers were ranked as highly vulnerable to being used to “conceal beneficial ownership, therefore facilitating the disguise and conversion of illicit proceeds.” The Real Estate Sector as a whole was also ranked as highly vulnerable to money laundering and terrorism financing.
https://www.fin.gc.ca/pub/mltf-rpcfat/index-eng.asp
An additional 2018 Department of Finance document Reviewing Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime re-affirmed this, stating that “The Assessment of Inherent Risks of Money Laundering and Terrorist Financing in Canada identified four commonly employed methods to launder the proceeds of crime through real estate transactions: purchasing or selling properties; accessing financial institutions through gatekeepers; assisting the purchase or sale of property; and using mortgage and loan schemes. These activities were assessed as presenting a high risk for money laundering in Canada”.
https://www.fin.gc.ca/activty/consult/amlatfr-rpcfat-eng.asp
As I linked to in a previous post, Transparency International Canada clearly explains, “Real estate professionals are well positioned to ask questions about their clients and the provenance of funds used for property purchases. They should be obligated to conduct due diligence on buyers and sellers, including efforts to identify beneficial owners.”
Despite this, compliance in the real estate sector seems to be quite poor. From 2012 to 2016, FINTRAC examined 823 companies in the real estate sector, and found significant deficiencies with anti-money laundering controls at 468, and very significant deficiencies at an additional 28. Another 324 had limited deficiencies. However, only nine monetary penalties were issued, such as $11,440 for six violations including incomplete record keeping and failing to identify clients, and $6,770 for four violations, including failing to develop and apply policies and procedures to detect money laundering. As I said in previous posts, enforcement needs to be stepped up, and punishments increased for those who flaunt the rules. These fines are simply a cost of doing business, and no real deterrent.
https://www.cbc.ca/news/business/fintrac-real-estate-money-laundering-1.3761343
The article also quotes an anti-money laundering adviser, who states that “The low levels of compliance in the sector are problematic because real estate is highly vulnerable to money laundering”.
So, on the one side, we have FINTRAC, the Department of Finance, and Transparency International Canada all explaining that reporting by real estate agents is important in helping to identify suspicious activities, which can be further investigated. On the other side, we have David saying that their audits are useless, and that the reporting should be discarded. As I stated previously, I am not an expert in the field, and thus defer to the assessment of experts. In this case, the experts are clearly in favour of the reporting. David is not an expert on preventing money laundering, so I do not place nearly as much weight in his opinion.
Finally, yes, crime is bad, and it is our civic duty to help reduce and prevent it. If I see a suspicious activity, I will gladly report it to the police and fill in whatever paperwork is necessary. I would not just brush it off as “not my job to catch criminals”, or too time consuming to report; if you think and act like this, you are on the wrong side.
Kyle
at 3:42 pm
So Fintrac says Fintrac is important. Bravo!!
How many criminals have actually been found laundering money and succesfully prosecuted as a result of Fintrac and AML training?
Chris
at 4:31 pm
The disclosures on this file have been instrumental in the drafting and granting of Production Orders on various MSBs. The details provided in FINTRAC disclosures related to this file have been associated to a US investigation for similar matters with similar participants. Of note, the details from the transactions obtained from the MSBs, namely identification papers used for EFTs, have been extremely beneficial in connecting persons’ activities between various countries.
— Royal Canadian Mounted Police
Outstanding support that is much appreciated by the FBI, particularly the creation of a link chart to show the relationships between the actors and bank accounts in multiple countries.
— FBI via FinCEN
Thanks very much for providing this disclosure – it certainly helps in substantiating charges of fraud over $5,000. It was relevant and it was received in a timely manner. Very clear and concise reports.
— Ontario Provincial Police
The disclosure provided new information on targets the Financial Investigations Division (FID) was aware were involved in the lottery scam. Additionally, it revealed an international slant that was previously unknown. It therefore means that the focus and scope of the current investigation/analysis will have to be widened. The FID appreciates the receipt of this new information.
— FIU Jamaica
FINTRAC provided timely and relevant information that greatly assisted with the investigation and prosecution of several individuals associated with Project CARTELLA.
— Peel Regional Police
This disclosure was received subsequent to an urgent VIR related to a live market manipulation scheme. The information contained in the disclosure was extremely well researched, analyzed and presented. It provided details on the involvement of subjects that we were not aware of, while also corroborating information that we previously had from unreliable sources.
— Alberta Securities Commission
Excellent disclosure, offshore information very helpful, new banking information very relevant.
— Canada Revenue Agency
The information you provided is highly relevant to our investigation in that it supports anecdotal information we received from other third party witnesses strengthening grounds for search warrants we are currently seeking to get authorized.
— Canada Border Services Agency
In numerous instances, FINTRAC’s analysis enabled investigators to identify new persons of interest and suspects, identify complicit businesses and establish links between principal suspects as well as suspects and persons of interest. This information significantly aided the course of the criminal investigation and inestimably augmented investigators’ understanding of the social and financial component of the organized criminality under investigation. The role of FINTRAC in the Project Royal investigation and in others, is indispensable in guaranteeing a successful, comprehensive conclusion, including criminal prosecution.
— Toronto Police Service Financial Crimes Unit – Strategic Partnership Operational Liaison
http://www.fintrac-canafe.gc.ca/publications/ar/2018/1-eng.asp
If your only takeaway from that entire previous post was that FINTRAC thinks FINTRAC is useful (which isn’t what they said – rather they discussed the vulnerabilities of the real estate sector, not to mention the other entities I raised who echoed this view), I think I’m wasting my time in responding to you.
Carl
at 4:49 pm
@Chris: If this were only for Kyle, then yes you would be wasting your time. For the rest of us, this is good information, so thank you.
Chris
at 5:03 pm
Thanks, Carl! Appreciate that, and glad you found the info interesting.
Kyle
at 11:04 am
“How many criminals have actually been found laundering money and successfully prosecuted as a result of Fintrac and AML training?”
So the answer is that you can’t actually tell from their “Annual Report” (which amounts to not much more than their own self-curated version of YELP reviews), because unlike an actual Annual Report, it is woefully devoid of any KPIs or metrics of how they performed relative to any kind of objective.
Instead, it’s very obvious from reading their “Annual Report”, that they basically sent out a survey to Law Enforcement departments, and cherry-picked the best responses. Kind of like a business being able to delete all their negative YELP reviews and only show their most glowing. And considering that they obviously chose the best of the best quotes, i find the praise to actually be rather luke-warm at best. When it comes to actually catching criminals, the quotes describe FINTRAC’s contribution as “support”, “helps”, “corroborating information we already had”, “aided”. You don’t hear Law Enforcement saying their contribution was “critical”, “pivotal”, “instrumental”, “key”, or “essential”.
This “Annual Report” to my mind is a bigger indictment to their actual effectiveness than anything. Add to that the real world experiences of them pushing paper and tick boxes, and David’s description is very appropriate. And considering their annual $56M in expenses (this doesn’t even include the mandatory costs to private businesses), it should be obvious that there are far more effective ways and far better channels to direct $56M to fighting crime and money laundering than whatever is that they are doing.
Chris
at 12:25 pm
FINTRAC doesn’t catch or prosecute criminals. They collect and disclose pertinent information to other organizations, such as police forces and the CRA, who then use that information to act or strengthen a case. In the report, they state “In 2017–18, FINTRAC provided 2,466 disclosures of actionable financial intelligence to its regime partners”.
The comments are from very well-known organizations, not at all analogous to curated anonymous yelp reviews. As for luke-warm, you have omitted those quotes describing FINTRAC as “instrumental”, “extremely beneficial”, “outstanding support”, “greatly assisted”, “extremely well researched, analyzed and presented”, “excellent”, “highly relevant”, and “indispensable”.
So, on the one side, we have the RCMP, FBI, OPP, ASC, CRA, CBSA, TPS, Department of Finance, Transparency International, and individual experts, asserting either that FINTRAC is beneficial and/or that real estate is vulnerable to money laundering and thus professional in the field should be subject to reporting responsibilities. On the other side, we have David and a couple of other posters who are claiming FINTRAC is useless because of their handful of interactions with the centre. I would again submit that if they feel audits are ineffectual, this would be an argument for strengthening audits, enforcement, and penalties, rather than abolishing them altogether.
But at the end of the day, it doesn’t really matter what you or I think. FINTAC, AML, etc. will almost certainly remain because it would appear that the public wants it to, and our elected officials are acting accordingly. 76 per cent supported a public inquiry into money laundering in British Columbia. Trudeau recently tasked Bill Blair with “cutting off money laundering”. I highly doubt that this will translate into reducing FINTRAC or decreased reporting responsibilities for real estate agents, a profession that is perceived more negatively than lawyers by Canadians (Insights West 2018).
Finzi
at 1:05 pm
Sorry, Kyle. Chris wins this one.
Kyle
at 9:27 am
“So, on the one side, we have the RCMP, FBI, OPP, ASC, CRA, CBSA, TPS, Department of Finance, Transparency International, and individual experts, asserting either that FINTRAC is beneficial”
The question isn’t whether Fintrac is beneficial. if money is no object. then sure they’re beneficial, the question here is value. The fact that they need to cook up their own version of YELP reviews and publish them as an “Annual Report”, is clear indication that they are trying to justify their value. Why are they trying to justify their value one might ask? Because simply put – their value is questionable.
If you look at all those organizations you named,: CMP, FBI, OPP, ASC, CRA, CBSA, TPS, none of them publish an “Annual Report”, dedicated solely to self-congratulations. Instead those organizations publish stats which are available to the public, many through an open data portal (e.g. http://data.torontopolice.on.ca/ ). One should ask themselves why Fintrac uniquely feels the need to put out such a report. And why they uniquely do not provide any hard stats or metrics on the work they are doing.
Chris
at 10:18 am
“Because simply put – their value is questionable.”
That’s your opinion, which you’re entitled to. I disagree, and have provided ample evidence as to why.
Condodweller
at 11:28 am
A bit late to the party again. I agree with above comments that RE agents should be subject to AML training given then nature of their transaction. Frankly, I’m surprised to find out that they are not already. As the saying goes, if you are not part of the solution, you are part of the problem. So start being part of the solution.
The fact David hasn’t done a deal where gym bags full of money is involved, I seem to recall him writing in the past about foreign buyers using briefcases full of cash not for a downpayment but as a full cash transaction. I don’t recall if he was involved in this type of a transaction or he witnessed/heard about it but that for sure would be worthy of an STR.
Also, just because David hasn’t been involved in such as transaction doesn’t mean other haven’t been nor that he will never be. Millions of people have not won the lottery, yet millions keep buying tickets. I wonder why? I guess they don’t subscribe to David’s logic. We might as well get rid of the insurance industry while we are at it.
I liken AML to the war on drugs. You can’t eliminate it but anything you can do to reduce it is beneficial.
Bftsplk
at 3:25 pm
@Kyle
“Because simply put – their value is questionable.”
You usually provide evidence, but not this time. Therefore, just an opinion, aka worthless. Not to mention that “questionable” is kind of a weasel word when all one has done is “question” something. Arguably, anything is “questionable.”
Kyle
at 3:33 pm
Then help me out here… Please answer this for me:
“If you look at all those organizations you named,: CMP, FBI, OPP, ASC, CRA, CBSA, TPS, none of them publish an “Annual Report”, dedicated solely to self-congratulations. Instead those organizations publish stats which are available to the public, many through an open data portal (e.g. http://data.torontopolice.on.ca/ ). One should ask themselves why Fintrac uniquely feels the need to put out such a report. And why they uniquely do not provide any hard stats or metrics on the work they are doing.”
Kyle
at 4:06 pm
I disagree that questioning is weaselly. Questioning is the basis of all science.
Once upon a time everyone simply agreed that the Sun revolved around the Earth. Some people questioned that, they said, “well if that hot thing in the sky revolves around us, then why do we have different seasons?” At the time there wasn’t any conclusive evidence (i.e. the kind i think you’re expecting instead of unanswerable questions) that proved the Earth in fact revolves around the Sun, until centuries later.
Frances
at 10:56 pm
I have read David’s post and all the replies and found it very interesting but I am puzzled as to how the agent is supposed to detect money laundering.
One of the references that I looked at says “Real estate professionals are well positioned to ask questions about their clients and the provenance of funds used for property purchases. They should be obligated to conduct due diligence on buyers and sellers, including efforts to identify beneficial owners. ”
How does an agent identify the beneficial owner? How does an agent discover the provenance of the funds? “Please sir, where did you get this money?” “Well, my mother died and left it to me.” How does the agent confirm or disprove this? Ditto with the beneficial ownership. How does the agent prove or disprove who the real owner is? It seems to me that all he can do is report the transaction and leave the investigation to others.
And I’m also curious as to how you launder money through a casino. Gambling is a game of chance and chance does not favour the gambler in a casino. You might win a large amount but you probably won’t. So, once the casino has the money, how does it get funneled back to the launderer? As far as I know, casino operation and owners are strictly vetted by the government and I would expect that the expenses and profits would have to be strictly accounted for. So how does this work?
arnold macmillan
at 8:01 pm
Agree with your comments whole heartedly. FINTRAC is nothing more than another Federal Government Boondoggle disguised as a socially needed entity. I am 90 years old and despair for the Canada’s Governments failure to resolve any matters except those involving our politicians and bureaucrats immediate needs. No one at any level of government seems to have any competence. Speaking of which i must now deal with a Revenue Canada reassessment [ harassment] over a deduction for a lower plate on my false teeth .I assume that getting a refit after 55 years, wearing the same uppers and lowers, falls under the heading of tax fraud .”. once more into the breach. ‘” before they defang me completely.