Signs You Should File a Suspicious Transaction Report
CATEGORY: Practice Tips
TAGS: Anti-Money Laundering Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) Suspicious Transaction Report
Filing a Suspicious Transaction Report (STR) can seem like a tough call – what’s considered suspicious? And how do they help anyways? The truth is STRs are an easy and important way for REALTORS® to help protect BC’s economy from money laundering. They also play a key role in helping law enforcement identify money launderers and bring them to justice. If you experience any of these signs during a transaction, it’s time to file one.
Know thy client
Anytime a client uses a name other than their own (or a spouse’s) on documents or uses different names on offers to purchase, closing documents or deposit receipts, you need to file an STR. Likewise, if your client remains anonymous and all your dealings are with a lawyer and cheques drawn on a lawyer’s trust account, that’s a sign something might be wrong.
Caginess about using their own name isn’t the only sign something might be wrong. If your client is conducting a transaction on behalf of someone who doesn’t seem like they could afford it (like someone who is underage) or is painting their own financial situation in a way that seems unrealistic, then it’s time to submit an STR.
And while BC has lots of out-of-country buyers, if your client is a non-resident for tax purposes and is buying a property as an investment with no intention of living in it, it’s worth considering an STR, especially if there are other indicators that something’s off.
Easy come, easy go
If a client seems unconcerned about the financial risks (like losing a deposit) or costs of a transaction, warning bells should go off. Another warning sign is when a client seems unconcerned about the value of the property itself. For example, they’re planning to build a luxury house in a non-prime location; they resell the property shortly after buying it at a significantly different price although local market values haven’t changed; or they buy multiple properties in a short period of time and seem unconcerned about the location, condition or any future repair costs.
Follow the money
Any unusual ways of paying a deposit is a clear sign something’s not quite right. This could include your client asking for the deposit to be divided into smaller parts with a short interval between them or even paying the deposit with a cheque from a third-party other than a spouse or parent. Another telltale warning sign is when a client pays a substantial down payment in cash and the balance is financed by an unusual source or offshore bank.
So I filed an STR. What happens next?
From your perspective as a Realtor, not much. The transaction completes and most likely you will never know how that information was used. Identifying and prosecuting money launderers is a long process and often takes years of law enforcement officers piecing together a complex puzzle of financial and other data. But by submitting an STR, Realtors can contribute a piece of the puzzle – and it just might be the piece that helps bring a criminal to justice.
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