Real Estate Firm LeHomes Realty Fined $282K for AML Compliance Failure
Real Estate Firm LeHomes Realty has been fined $282K for AML compliance failure. The brokerage couldn’t establish ongoing staff training for addressing financial crime.
LeHomes Realty, a real estate brokerage firm, has been fined $282,397 for failing to comply with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
The firm couldn’t ensure the appointment of a responsible person to implement a compliance program. The brokerage failed to apply the required compliance policies for its regulatory obligations regarding a third-party determination and receipts of the records of funds and current monitoring. The firm also failed to consider the AML/CFT risk of its services and delivery channels, business and client relationships, and geographic location.
According to FINTRAC, LeHomes also failed to establish and maintain the AML training program for staff and couldn’t show any means to test the effectiveness of the policies. The firm that has offices in Richmond, Burnaby, and Vancouver also failed to keep complete identification records of clients.
In 2016, the Globe and Mail examined LeHomes Realty and mentioned a shadow-flipping activity. BCFSA determined in August 2018, following a complete investigation giving and analysis, there is insufficient evidence to warrant disciplinary action against New Coast Realty in connection to allegations that training provided by the owner and practices at the brokerage put consumers at risk.”
With no findings against the brokerage as an entity, the council issued five suspensions and ten fines against individuals licensed or formerly licensed at the firm.
According to the Commission of Inquiry into Money Laundering in B.C., the firm didn’t have sufficient protocols to fight financial crimes. Commissioner Austin Cullen made 101 recommendations in the final report, and 40 out of them were directly related to real estate.
In addition, several other recommendations, such as proposals to establish vigorous AML policies within financial institutions, were ancillary directions.
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