Banks offer little on how B.C. man with criminal record could allegedly launder money in real estate

Banks offer little on how B.C. man with criminal record could allegedly launder money in real estate

B.C.’s civil forfeiture office is suing to seize a house and an apartment in Vancouver.

B.C.s civil forfeiture office wants to seize this East 5th Ave house in Vancouver. PNG

A pair of financial institutions, named in a B.C. civil forfeiture suit that alleges a Richmond man laundered money in real estate, would not answer questions about how a man with a lengthy criminal record and no “legitimate” income could obtain mortgages and a home equity line of credit.

In a civil claim filed on Jan. 4, Stephen Hai Peng Chen, also known as Hoy Pang Chan, is accused of using money obtained from drug trafficking to pay for properties in Vancouver and Richmond.

The B.C. civil forfeiture office lawsuit lists two transactions that involved TD bank mortgages and and a separate National Bank home equity line of credit, known as a HELOC, used to purchase a Vancouver property.

Chan has not responded to the lawsuit. The civil claim contains allegations not proven in court.

The TD bank said it could not, for privacy reasons, comment on any specific customer relationship or specific regulatory reports.

TD spokesman Jeff Meerman pointed to information stated by the civil forfeiture office in the claim, repeating that TD, as mortgagee, “did not participate in or know of or have reason to know of the unlawful activity.”

National Bank offered some comment on the case, saying the home equity credit line was based on the three borrowers’ net worth: their equity and investments. Chan’s parents – Xiong Guang Chen and Jue Ming Chen – were involved in the transactions, according to the court records.

In response to Postmedia questions, National Bank did not specifically address Chan’s criminal record, which dates back to 1990 and includes convictions for assault with a weapon; assault causing bodily harm; possession of property obtained by crime; making, having or dealing in instruments of counterfeiting; and extortion.

Neither bank would say whether it filed a suspicious-transaction report to Fintrac, the financial transaction and reports analysis centre of Canada, which gathers, analyzes and, in some cases, discloses financial intelligence.

“National Bank has an AML (anti-money-laundering) regime in place and complies with all applicable laws but will not provide specific information about its internal procedures,” National Bank spokesman Jean-Francois Cadieux said in a written statement.

TD also said it has an anti-money-laundering system in place. “We operate in full compliance with applicable anti-money laundering, anti-terrorist financing, sanctions and anti-bribery legal and regulatory requirements, as well as our own internal risk policies,” Meerman said in a written statement.

Fintrac, headquartered in Ottawa, did not respond to questions about whether it received a suspicious-transaction report from either bank and how it would respond. In a written statement, spokesman Dino Roberge said Fintrac was precluded, under federal law, from speaking on information it may have received or financial intelligence that it may have disclosed to police about suspicions of money laundering or terrorist activity financing.