Conservative MP proposes examination of RBC's purchase of HSBC Canada
Ottawa's Finance Committee notified of motion stemming from The Bureau's investigation of fake Chinese income mortgage allegations
Conservative MP Adam Chambers has notified Parliament of his proposal to examine circumstances of Royal Bank of Canada’s purchase of HSBC Canada and to have at least $100-million set aside to cover the possibility of fines from “any current or future investigations by regulators.”
The notice of motion to Ottawa’s Finance Committee is in response to The Bureau’s investigation of an HSBC Canada whistleblower’s allegations of surging mortgage fraud and money laundering concerns in Toronto-area HSBC branches during the Covid-19 pandemic.
The whistleblower, who left HSBC Canada after making internal complaints in April 2022, believed bank staff were complicit in a fraud that enabled Chinese diaspora real estate investors to secure at least $500-million in questionable mortgages since 2015, by claiming faked or exaggerated incomes in China.
The whistleblower informed his bosses the fraud was sophisticated and likely involved HSBC Canada staff and scam centres in China that verified fake banking and employment records, according to bank records reviewed by The Bureau.
These records suggest questionable mortgages discovered by the whistleblower match with broader Canadian banking vulnerabilities identified by Fintrac’s 2023 examination of evolving Chinese diaspora money laundering schemes, according toThe Bureau’s journalistic investigation.
Finance Minister Chrystia Freeland approved RBC’s $13.5-Billion purchase of HSBC Canada in December 2023.
“The deal is conditional on RBC establishing a global banking hub in Vancouver, waiving fees associated with the transfer of mortgages from HSBC to RBC and protecting HSBC's Canadian workforce,” Reuters reported in December.
Parliament’s Standing Committee on Finance is mandated to study issues related to Ottawa’s Department of Finance, Fintrac and Canadian Revenue Agency.
A transcript of the notice of motion from Chambers says:
“With respect of Royal Bank of Canada’s purchase of HSBC Canada, the Committee call on the government to require an amount equal to no less than $100M be set aside in escrow for a period of 18 months to cover any fines, penalties or levies that may potentially be against HSBC Canada in connection with any current or future investigations by regulators or authorities under relevant legislation or regulations, including the Proceeds of Crime and Money Laundering Terrorist Financing Act.”
In one response toThe Bureau’s investigative questions, HSBC Canada said it “is at the forefront of efforts to identify, prevent and deter financial crime … We will not do business with individuals or entities we believe are engaged in illicit conduct.”
In 2023 Chambers, MP for Simcoe North, unsuccessfully introduced a private members bill to shore up Canada’s weak regulation of money laundering.
“The scale of money laundering in Canada is staggering, and impacts Canada by laundering proceeds of illicit activities and driving up real estate prices for all Canadians,” a statement from Chambers on the bill said.
“Under our currently weak investment rules, banks and other financial agents are required to collect and verify the identity of their clients … the legislation if adopted, would make it a criminal offence for individuals or businesses to provide false information to financial institutions to conceal the illegal sources of the money or the identity of the account holders.”
Meanwhile, the Finance Committee has fallen behind on its mandated review of Canada’s Proceeds of Crime and Money Laundering Terrorist Financing Act.
An October 2023 letter from Deputy Prime Minister Freeland to Liberal MP Peter Fonseca, the committee’s chair, says the Act’s last review was in November 2018, and “I [Freeland] suggest the review be initiated this fall and completed by winter 2023-2024.”
The Bureau asked the Department of Finance whether the belated review has been scheduled yet.
“A parliamentary committee is to conduct a review of the Act’s administration and operation every five years,” a spokesperson wrote, “we are awaiting an announcement from the Committee undertaking the Review.”
The Bureau also asked whether “mortgage loan fraud is a predicate offence in Canada, and therefore known mortgage fraud cases stemming from bank lending that results in home purchases, should be reported as Suspicious Transaction Reports to Fintrac?”
“Regarding mortgage fraud, the government has taken important steps to address money laundering risks in the real estate sector,” a spokesperson responded.
“In Budget 2022, the government announced its intention to extend [Anti-Money Laundering] requirements to all businesses conducting mortgage lending in Canada to limit the exploitation of the real estate market by criminals,” they wrote.
sam@thebureau.news
Where were the checks and balances here????? "I see nothing" not good enough!!!...follow the money!!!!
Your the best Sam.
Thank you!
At a provincial level, it is unclear if BC NDP are moving forward on recommendations from the money laundering enquiry.
Seems that isn’t a priority for Mr Eby anymore, or if it is, it is happening in the background.