Banks granted mortgages to Vancouver grow-op

Banks granted mortgages to Vancouver grow-op

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. 

20 Comments
  • Scott 2010-06-16 2:21:20 AM
    Unfortunatley in this article what stands out to me most is the use of "allegedly" and "claims". I think before any strong opinions are made in regards to this matter more actual evidence and knowledge base is required. This is almost a what if they knew this man was gonna do this story. Which I dont believe the banks would knowlingly launder money for this sort of man, but hey who knows, its not like I have any Evidence to prove either way.
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  • Joe 2010-06-16 4:59:54 AM
    "The writ claims that both times, Le couldn't prove a legitimate means of income to make the mortgage payments"

    Can you not think that the writer has to say "claim" as not to be sued. The writer himself/herself doesn't have privy to actual filings/evidence.

    Since the case is filed, the banks/broker will have to show they had evidence of 'proper' means of income to suppport the Mortgage. Work backwards to find out how much Mr Le has to obtain a mortgage at max 74% LTV.
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  • mortgage needs 2010-06-16 5:05:06 AM
    This reads like RBC's $70 k is a 2nd behind a BMO 1st. Am I reading this correctly ?
    Guess there was no appraisal report done or the appraisal was a drive-by ?
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