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How do we follow the money? Canadian real estate gets ‘abysmal’ anti-money laundering grades – Global News

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An internal report from Canada’s anti-money laundering watchdog found nearly half of the real estate companies audited weren’t complying with key areas of the country’s anti-money laundering regime and experts warn these “serious gaps” can hurt criminal investigations. 

The report prepared by the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) for Finance Minister Bill Morneau included an audit of 172 real estate companies, brokers and developers in 2017-18.


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FinTRAC found a 52 per cent compliance rate when it came to training employees to detect money laundering or suspicious transactions and 53 per cent in the area of client identification – a requirement for real estate agents to verify a person’s identity.

“There is still a misunderstanding across the sector as to how the real estate sector can be used for money laundering and terrorism financing,” read the document obtained by Global News under access to information laws.

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FinTRAC’s on-site examinations targeted large brokerages in Vancouver, B.C.’s Lower Mainland, the Greater Toronto Area and Montreal. B.C. has launched an inquiry into how money laundering distorted housing prices in the province and fuelled the opioid crisis. 

Matt McGuire, a former intelligence officer for FinTRAC, called the compliance rates “abysmal.”

“It’s a significant non-compliance rate,” said McGuire. “How can you expect agents and brokers to detect suspicious transactions if they don’t know what they’re looking for?”


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When it comes to identifying clients, real estate brokers are required to record simple details to confirm a person’s identity, like information on a driver’s licence, according to McGuire.

I can forgive somebody not being able to pick out a suspicious transaction on a real estate deal, given a limited fact scenario, but I can’t forgive the sloppiness of not identifying somebody with a very simple set of rules.

“How are we supposed to follow the money if we don’t know who is involved?”

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Laws against money laundering and terrorist financing require sectors – like banking, casinos and real estate – to identify their clients, keep records and report large cash deals and other suspicious transactions to the federal government.

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FinTRAC warned that the real-estate sector “still has one of the lowest reporting levels” among sectors, but did not offer detailed numbers.

McGuire said Canadian real estate has been “extensively exploited” by the problem of money laundering and all financial sectors need to fight against it.

“It’s important in the first line of defence, the people actually interacting with those who are buying and selling property, pay attention to the potential for suspicious indicators that there might be crime behind the transactions.” 

The report did find the sector performed well in two other areas, including 100 per cent of companies fulfilling the requirement to have an anti-money laundering compliance officer and a 95 per cent pass rate with third-party determination – identifying a person or entity who instructs another person to conduct a financial transaction on their behalf.

McGuire said the 100 per cent compliance rate is misleading, as firms are graded solely on whether a person is identified by the company as a compliance officer.

“I can point and if somebody puts up their hand in the room, you have a compliance officer. One hundred per cent pass,” he said. “There’s no measure of how good you are or how well you know the requirements.”

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The report followed previous years of FinTRAC data from 2012-16 that showed more than 800 real estate companies had “significant” or “very significant” deficiencies with the anti-money laundering and anti-terrorist financing controls.


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Renée Bercier, a spokesperson for FinTRAC, said the real estate sector performed well in some areas, but needed to improve in the areas of training and identifying clients.

“What FINTRAC has found more generally in the real estate sector is that the level of compliance knowledge and resources varies across the sector and is often a function of an entity’s size, capacity and access to resources,” Bercier said in an emailed statement.

Bercier noted that not all 172 examinations assessed training or client identification.

“In order to address these issues, FINTRAC is working with real estate entities and the Canadian Real Estate Association to increase this sector’s understanding of their obligations under [anti-money laundering laws],” Bercier said.

The agency noted that over $172 million was allotted in the 2019 budget for the RCMP, CRA and FinTRAC to help crack down on financial crimes.

Warnings for Ontario and elsewhere

The CN Tower can be seen in the Toronto skyline in Toronto, Ontario. THE CANADIAN PRESS/Cole Burston

The CN Tower can be seen in the Toronto skyline in Toronto, Ontario. THE CANADIAN PRESS/Cole Burston


THE CANADIAN PRESS/Cole Burston

Criminals using Canada’s hot housing markets of Vancouver, Toronto and Montreal to launder illicit cash have grabbed headlines across the country.

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“The more criminal money there is, the more demand there is for property, the higher the prices go,” McGuire said. “That can impact the accessibility of housing.”

Global News first reported on a secret police study in 2018 that roughly $1 billion was laundered through B.C.’s real estate market in 2016 in homes valued above $3 million. Police did not study the non-luxury home market, but believe there is significant money laundering in lower-valued homes as well.

A subsequent report from a panel of B.C. experts on the issue estimated that the problem of money laundering in Canada’s real estate sector was roughly $46.7 billion.


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Denis Meunier, the former deputy director of financial intelligence at FinTRAC from 2008 to 2011, said the real-estate industry needs better training and more accurate record-keeping to help federal agencies tackle the billion-dollar problem.

“These requirements that haven’t been met are serious gaps,” he told Global News. “You’re supposed to find out if the person in front of me are ‘they doing business on behalf of someone else?”

Meunier said FinTRAC findings were particularly galling as real-estate brokers and firms had low compliance rates when it came to identifying clients.

“It’s not encouraging,” he said. “You’re looking at about half of the population that isn’t meeting the requirements.”

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Canada is a great place to launder money because of our lack of ownership transparency, according to experts.

Houses or condos can act as a kind of bank account for criminals, as they can park large amounts of illicit cash by buying up real estate and hide the purchases behind numbered corporations or shell companies located in offshore tax havens.

Meunier said client identification records can help guide investigators looking into organized crime.

“If you’re not recording, you’re not providing the right kind of information so that records are available when criminal investigations are conducted in [real time].”

Calls for change

Tim Hudak, president of the Ontario Real Estate Association, said he was “very nervous” that Toronto’s housing market could see an influx of dirty cash as B.C. regulators crack down.

“I’m very nervous that the Greater Toronto area will become the epicentre for dirty money in Western democracies,” Hudak told Global News. “For some reason, Canada still seems to be in a bit of the dark ages when it allows drug dealers to hide behind numbered companies and snap up real estate.”


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B.C. announced Canada’s first beneficial ownership registry set to begin in May 2020, aimed at ending the use of trusts, corporations or partnerships to hide transactions from public view. The province has also made a new anti-money laundering course mandatory for all real estate agents.

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Hudak has been calling on Premier Doug Ford’s government to adopt a beneficial ownership registry with harsh penalties for those who break the law. He also supported calls for anti-money mandatory training for people working in real-estate.

“If B.C. closes their door to the flood of laundered money, guess where it’s all going to go? The province of Ontario,” Hudak said.


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A spokesperson for Ontario Finance Minister Rod Philips said the province would not commit to its own registry but said it was in “consultations” on the issue with Ottawa and other provinces.

“The government is also engaging in various actions to address money laundering including collecting certain beneficial ownership information under the Land Transfer Tax Act and working proactively to assist the Canada Revenue Agency in addressing non-compliance in the real estate sector,” Scott Blodgett said in an email. 






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Bill Blair says federal government will assist in B.C. money laundering inquiry


Bill Blair says federal government will assist in B.C. money laundering inquiry

Quebec’s finance minister said the government held a “public consultation a few weeks ago” on corporate transparency and is currently under analysis.

“We are also working on reinforcing enacting stricter rules against tax evasion and are looking into giving more powers to Revenu Québec to reinforce transparency,” spokesperson Fanny Beaudry-Campeau said.

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For Hudak, tackling the issue of money laundering makes the housing markets in major cities a more even playing field.

“Our concern is that a young couple who’ve been scraping every dime together to finally find a place to call their own is left on the sidelines while some drug dealer’s niece snaps up that property.”

© 2020 Global News, a division of Corus Entertainment Inc.

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The ins and outs of real estate – Toronto Sun

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Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page.

Article content

For new homes buyers, specifically, three questions they should ask include:

– Is there an assignment?

– Are there development fees?

– Is it a reputable builder?

When it comes to selling, Padjan suggests the following:

– Get the right prices;
– Manage expectations of the market; and,
– Consider multiple offers or offers anytime.

Finally, the top three tips for investors include:

– Go physically see the property just in case something doesn’t jive.

– It is perfectly okay to do an inspection for mould, asbestos and other potential hazards.

– Investors should be aware of hidden fees such as maintenance bills.

When asked, why are you so proficient in this industry, Padjan states:, “I am honest, and have a very supportive, international brokerage and I always build relationships with other agents.”

For general real estate inquires, reach out to marianne.padjan@exprealty.com,

For more information, reach Nicole at Nicole@prospect2win.com or subscribe to her YouTube channel at www.youtube.com/NicoleAttias. 

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Canada’s fastest-growing region flexes real estate muscle – Business in Vancouver

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The 74-acre Greata Ranch and Butler lands near Summerland are listed for sale as one of the largest waterfront development parcels in the Okanagan | Photo: Colliers International

Kelowna, and with it the Central Okanagan, has the fastest-growing population in Canada, posting a 14 per cent increase from 2021 to 2026, according to Statistics Canada.

With 224,000 people, the city of Kelowna has twice the population of Nanaimo, Kamloops or Prince George as the second-largest B.C. city outside of the Lower Mainland.

The broader Thompson-Okanagan region is currently growing at about 1.6 per cent per year, hitting 620,000 in 2021 and adding roughly 10,000 new residents annually.

Judging by real estate development being launched this spring the regional population will continue to accelerate, providing the current residential downturn proves shallow and brief. It is housing, after all, that is driving the real estate market across the Okanagan, but residential sales have slowed recently.

In May, total Okanagan home sales were down 28.5 per cent from a year earlier, though the average price increased nearly 10 per cent, year-over-year to $785,600, according to the B.C. Real Estate Association (BCREA).

The BCREA is now forecasting that Okanagan home sales will drop 19 per cent this year, from 2021, and fall a further 14.8 per cent in 2023, with home prices eking out just 1.3 per cent increase that year compared to 2022.

May sales across the Okanagan slid down only 1.2 per cent compared to April, noted Lyndi Cruickshank, president of the Association of Interior Realtors, which she said reflects the market’s stability.

The mantra in the Okanagan real estate community is that a lack of supply has helped to stifle sales and keep prices rising. This year should test that theory, if all the current projects proceed.

One of the largest is Greata Ranch, a 46-acre lakefront parcel near Summerland between Kelowna and Penticton along Highway 97. On the development radar for more than a decade, the property has now been extended with the addition of 28 adjacent waterfront acres, the Butler family lands.

The entire 74 acres is now being marketed as a single parcel for mixed-use with a residential emphasis, according to Stephen Webber, associate vice-president of Colliers International.

The price will be decided by bids submitted by potential buyers on the vendor’s “form of offer.”

The City of Kelowna voted unanimously on May 31 to approve a 425-home development at the Tower Ranch area in east Kelowna. Also in Kelowna, a 1,000-home development was approved in late May that includes 16 buildings, up to 17 storeys high, on Lakeshore Road. North Kelowna is the focus of major mixed-use development plans on two former industrial sites, including 40 acres of lakefront that was once a sawmill.

In downtown Kelowna, the University of British Columbia Okanagan (UCBO) is pushing to build a 46-storey residential and administration tower. Nearby, the 26-storey Savant condo tower is now pre-selling at an average of $1,000 per square foot, according to Shane Styles, president of Epic Real Estate Solutions of Kelowna.

Styles, who was born and raised in the Okanagan, estimates that investors account for 60 per cent to 70 per cent of new condominiums buyers.

There are user investors, like parents buying an apartment for their children to use while attending UBCO or using it themselves as a vacation home and renting it out seasonally; and what he calls “pure investors” who count on rental income and appreciation.

The May benchmark price for condominiums in the Okanagan increased 31 per cent to $342,500, compared to a year earlier. The rental vacancy rate in Kelowna is 0.6 per cent, the lowest level in Canada.

At least a score of new developments are planned in West Kelowna, including the next phases of Kind Development’s Lakeview Village, where 120 homes in the first two phases sold out and a retail village is already complete.

In Penticton, the largest residential development in years was granted regulatory approval in May for a 219-unit market-housing project on a 6.6-acre site. The development is now awaiting provincial highways approval and a bylaw amendment. An even larger Penticton development, for nearly 700 new homes in the North Witse Block area received approval to proceed to public hearings on June 20.

On Shuswap Lake, the Old Town Bay development has been refreshed for 2022, with a trio of developments, including a 32-lot single-detached subdivision, new strata units, a hotel and a large recreational vehicle park where lots will be sold as strata.

A market to watch, according to Styles, is Vernon and the North Okanagan, which he sees hosting the next wave of real estate investment.

Styles believes the entire Okanagan economy will be booming this summer, the first in two years with no pandemic restrictions.

“It will be nuts,” Styles predicts, which could also prove an accurate forecast for the entire Thompson-Okanagan real estate market.

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David Wallach Discusses Calgary's Business and Real Estate Opportunities – GlobeNewswire

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Beverly Hills , June 30, 2022 (GLOBE NEWSWIRE) — With more than 20 years of leadership experience, real estate executive David Wallach says his aim is to educate people to make the right choices.

Listen to the full interview of David Wallach with Adam Torres on the Mission Matters Money Podcast.

How did you get started in Real Estate?

Wallach’s career began in Israel, where he worked as a broker for an insurance agency, eventually working his way up to a supervisory role at a life insurance company. Over time, he grew dissatisfied with his career path and pivoted to start his own brokerage company in April 1990.

When he moved with his family to Canada in 1999, he realized while awaiting immigration clearance that Calgary’s real estate industry was on the verge of a big boom. He decided to focus on commercial real estate instead of residential, and as of Valentine’s Day 2000, he was officially in business in Canada.

Tell us about your book, “Desire, Discipline & Determination: Lessons from Bold Thought Leaders.’

Writing a book was challenging, Wallach says, because his first language is Hebrew, and he found it tough to write well in English. However, with help and support, he completed his first book and says he’s ready for the next challenge. The book, Desire, Discipline & Determination: Lessons from Bold Thought Leaders discusses leadership mistakes he’s made and the lessons he’s learned from them, inviting emerging entrepreneurs to learn from them as well and avoid those missteps for themselves.

Tell us about your radio show, “Calgary Next.”

Building on several years of experience with a previous radio program, Wallach approached a friend at a local radio station in the first year of the pandemic when everything was shut down, requesting help with a new show where he could talk to businesspeople and let people know about business prospects in Calgary. Over the past year, the show has hosted interviews with local entrepreneurs across a broad range of sectors from entertainment to health to information technology. One of the Calgary Next’s goals, he says, is to support local businesses to help with their brand visibility.

What’s next for you and your ventures?

Wallach says the plan for Barclay Real Estate is to increase its market share, and he’s looking for more people to engage with Triumph Real Estate Investment Fund. The radio show, Calgary Next, will continue producing new content, and he plans to start another radio show in the future.

To learn more, visit www.barclaystreet.com or www.triumphref.com. To contact David directly, email dwallach@barclaystreet.com or dwallach@triumphref.com.

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