FINTRAC sanctions real estate broker

Federal anti-money laundering authorities hit an Ontario real estate brokerage with a monetary penalty in connection with a transaction that allegedly carried numerous red flags for illicit financial activity.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imposed an administrative monetary penalty of $148,912.50 on Century 21 Heritage Group Ltd. for an alleged violation that it uncovered in a compliance review.

Specifically, FINTRAC said it found that the firm failed to report a real estate purchase that bore several hallmarks of money laundering and terrorist financing. These included the presence of a foreign buyer from a jurisdiction under economic sanctions (or with weak anti-money laundering controls), frequent changes of control between related parties and the involvement of an individual with possible connections to sex trafficking, “as the owner, operator or employee of an entity in an industry that could be used as a venue for human trafficking for sexual purposes.” 

“These indicators demonstrate that Century 21 Heritage Group Ltd. had reasonable grounds to suspect that the transaction conducted by the client it represented were in line with those related to the commission or attempted commission of a money laundering or terrorist financing offence,” the agency said in a notice, which characterized the violation as “very serious.”

The brokerage has appealed the decision to the Federal Court, FINTRAC noted.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.