Two of Canada's biggest banks have been accused of being "wilfully blind" in giving huge mortgages to a Vancouver man who allegedly used the property as a marijuana grow operation, reported the Financial Post yesterday.
In this civil case before the B.C. Supreme Court, the Victoria-based Civil Forfeiture Office (CFO) is asking for full or partial forfeit of Bank of Montreal's and Royal Bank of Canada's interest in the mortgages on the million-dollar Vancouver home.
The writ filed by the CFO suggests the banks were aware that approving the mortgages would allow Hai Le to launder money through the property and their respective institutions.
"All or part of Mr. Le's income is derived from unauthorized production of cannabis marijuana," the writ claims. "BMO and RBC...had actual knowledge, were recklessly indifferent towards, or were wilfully blind to the fact that the approval of funding of the BMO Mortgage and RBC Mortgage permitted the...property to be used as an instrument to launder the proceeds of crime."
In August 2009, according to the writ, two days after Vancouver police raided Le's home and uncovered a massive marijuana grow-up, Le received a $70,000 mortgage from RBC for the property. Ten months prior to the raid, BMO refinanced Le's mortgage for $976,000 after buying the house for $980,000.
The writ claims that both times, Le couldn't prove a legitimate means of income to make the mortgage payments.
Both banks have filed statements denying all allegations, and the representing lawyers have refused to comment.