Developers could possess information about money launderers

Developers could possess information about money launderers

Developers could possess information about money launderers

Could the government forcing real estate developers to divulge buyer information become a key cog in the fight against money laundering?

“Where they need to start first, if they’re going to get information on this, is with developers because this problem isn’t as pronounced in the resale market as it is in preconstruction,” said Tom Storey, team leader with Royal LePage Signature Realty. “Nobody knows who’s buying these preconstruction units other than the builders, but without the government going to them and asking for information they’re not going to openly give it up.”

However, as real estate lawyer Bob Aaron previously told, the provincial government seems to have a very close relationship with the developer community.

“How many developers purchase tables at Conservative Party fundraisers? I was at one years ago when John Tory was the head and it seemed to me half the tables in the room had placards with developer names, so these people are big contributors,” said Aaron.

Whether or not the Ontario government decides to enlist the help of the developer community in the fight against money laundering—although the government, having recently stated it is merely monitoring the situation, seems aloof—the CEO of the Ontario Real Estate Association—himself an erstwhile leader of the Progressive Conservative Party of Ontario who’s known Premier Doug Ford for a couple of decades—has a suggestion he believes will curtail the proliferation of dirty money in the province’s real estate market.

“We’ve called for a searchable public database to find out who the beneficial owners are of the numbered companies or numbered trusts,” said Tim Hudak. “If money is coming from a corrupt politician in China and they need to get the money out because a corrupt politician higher up the chain might take it from them, they layer it through numbered companies and eventually purchase property in Western jurisdictions like Canada, the U.S. or England, and they never attach their name to it—it’s usually a son or daughter, brother, sister or someone higher up in organized crime.”

Hudak added that a beneficial ownership registry would help authorities tackle transnational crime, too.

“Police overseas can also identify that the politician’s daughter, let’s say, owns this property in Toronto, Vancouver or Montreal and will notify the RCMP,” said Hudak. “Similarly, the RCMP can connect a person, who has little income but is buying up many properties, to the original crime in, say, South America or an Asian jurisdiction.”