Short Description: Canadian regulators intensify crackdown on real estate money laundering as two major brokerages face major fines for failing to detect suspicious transactions.
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Main Article:
Canada’s anti-money laundering watchdog is taking a significantly harder line on real estate, a sector long considered vulnerable to illicit financial flows. In a clear signal of enforcement escalation, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has levied two substantial penalties against Ontario real estate brokerages in quick succession, with both cases now under appeal. The actions underscore a broader crackdown on money laundering within North American real estate compliance.
The most recent penalty, a $111,615 fine against D. & D. Realty Brokerage Inc., follows just two days after FINTRAC announced a similar $148,912.50 fine against Century 21 Heritage Group Ltd. Both cases reveal critical failures in AML regulatory oversight. D. & D. Realty was cited for an overall lack of a compliance program, while Century 21 failed to file a Suspicious Transaction Report (STR) despite numerous red flags. These included a foreign buyer from a high-risk jurisdiction and links to industries associated with human trafficking—a stark reminder of how financial crime surveillance goes beyond simple fraud to combat serious crimes like terrorist financing.
Sarah Paquet, FINTRAC’s Director and CEO, stated the regime is in place to protect Canadians and the economy, emphasizing that while the agency assists businesses with compliance, it will “take appropriate actions when they are needed.” This publicized enforcement push aims to pressure the entire industry into strengthening internal controls. For professionals in the United States finance sector, FINTRAC penalties serve as a crucial case study in cross-border regulatory trends, highlighting the increasing scrutiny on gatekeeper professions and the tangible consequences of neglecting client due diligence and transaction monitoring obligations.
Short Summary:
Canada’s FINTRAC is actively enforcing anti-money laundering laws in real estate, issuing major fines to brokerages for compliance failures. These penalties, including one for missing a suspicious transaction report linked to high-risk indicators, signal a tightening regulatory environment. Finance professionals must note this trend toward stricter oversight and enhanced due diligence requirements to mitigate risks and avoid similar enforcement actions.
