The monetary penalties called for in the 2008 legislation went into effect on December 30, 2008.
Violations are classified by the Regulations as “Minor”, Serious or “Very Seriousâ€, and carry maximum penalties accordingly. The Administrative Monetary Penalty (AMP) program also has maximum penalties for individuals and entities (e.g. corporations) as follows:
Minor (individual/entity): $1 to $1,000
Serious (individual/entity): $1 to $100,000
Very Serious (individual): $1 to $100,000
Very Serious (entity): $1 to $500,000
Representatives from CREA met again with FINTRAC officials in December to review some of
the ongoing issues raised by REALTORS®. Their responses are indicated in the FAQ
document posted in the Money Laundering compliance centre on REALTOR Link®.
FINTRAC’s 2008 Annual Report also includes a specific real estate related investigation for the first time. The report says a Canadian police unit investigating a series of mortgage frauds provided FINTRAC with information identifying three individuals and two entities suspected of criminal involvement.
In each case, a house would be sold and then immediately resold, sometimes within minutes, at an inflated price. Banks issued mortgages to fictitious buyers based on the inflated prices, and then were left holding the inflated mortgages. The profit was the difference between the funds needed to close the first sale, and the mortgage for the second. FINTRAC identified four additional individuals, including one sentenced to three and a half years in prison for his role in the scheme, which involved fraud totalling $3 million.