'Don't go for the cash,' former mortgage broker warns
Published Wednesday, May 15, 2019 6:31PM PDT
Last Updated Wednesday, May 15, 2019 7:32PM PDT
Lending rules that are nearly half a century-old need to be updated to make sure criminal cash doesn’t enter our financial system, says a former mortgage broker who wishes he’d never been involved in a suspicious transaction.
Bhupinder Dhaliwal told CTV News he still feels guilty about a time he was approached to assist with a mortgage by a fast-talking man who had a lot of cash but didn’t want to put his name on any documents.
"They came and said they’re buying a house. I said congratulations, let’s talk about the mortgage, it will be my pleasure," said Dhaliwal.
He said he had no idea the man – Frederic Wilson – is a career drug trafficker with drug connections as far away as California, according to claims in a court document filed in B.C.
Court documents track a series of offences starting in 1995, including a 14-year sentence for transporting cocaine in Sacramento in 1998. He’s now serving a 10-year sentence for convictions relating to a drug lab bust in White Rock in 2016.
Wilson’s case was highlighted by provincial money laundering investigator Peter German, who said that the property purchase "showcases the role of nominees in combination with several other typologies characteristic of money laundering."
Dhaliwal said Wilson and his wife were polite and charming, and sympathized with him about tough times in his own life. They had mutual friends, who helped Dhaliwal trust Wilson to the point of accepting a cash loan, which Dhaliwal put in an investment.
Wilson wanted to buy a house on 134A Street in Surrey, and was able to produce money from several bank accounts, documents say. But he wanted his money back from Dhaliwal, who couldn't get it quickly.
"I collected all the money, I borrowed from friends, I got driven emotionally," Dhaliwal recalled. "I was under a lot of pressure."
Wilson wanted to substitute his name on the purchase documents for the name of his brother-in-law, Dhaliwal recalled.
"I cannot have the house in my name, I'm having the house in my relative’s name," Dhaliwal recalled.
The sale of the $768,000 home went through in 2011, and Dhaliwal said he never heard from Wilson again.
Court documents say even though Wilson’s brother-in-law was on title, Wilson and his wife lived there. Wilson registered a vehicle and a company there, and he was found by police officers checking on his curfew multiple times.
German says in his report, "Wilson’s brother-in-law took out a $616,000 mortgage with an unregulated lender and two years later obtained a second mortgage against the property with a B.C.-registered numbered company. Though the loans were in the name of Wilson’s brother-in-law, Wilson and his wife allegedly covered the mortgage payments by depositing cash into his bank account."
The property was sold in 2017, after a settlement with the director of civil forfeiture where the province received the money from the sale, German wrote.
It’s about time the provincial law regulating mortgage brokers be updated, as the last time was more than 40 years ago, said Samantha Gale, the CEO of the Canadian Association of Mortgage Brokers in B.C.
One provincial law has been written – but not passed – since 2012, she said.
"We need to do more work investigating how dirty money is going into the market and how to stop it," Gale said.
The federal law that governs how some agencies report suspicious transactions to FinTRAC doesn’t require mortgage brokers to report those transactions, but it’s time they started, said a statement from the Registrar of Mortgage Brokers at their provincial regulator, FICOM.
"The Registrar of Mortgage Brokers has made it clear to BC brokers that he expects them to report to FinTRAC, even though they are not legally required to do so," he said.
As for Dhaliwal, he says anyone in a financial industry should be very careful.
"Never, when someone is talking about cash, don’t go for the cash. It should be a bank," he said.