That’s what BC’s Civil Forfeiture Office calls Royal Bank (RBC) and Bank of Montreal (BMO), according to the Vancouver Province.
The charge results from RBC and BMO allegedly taking a blind eye to mortgage approval standards in the following case.
The two banks reportedly lent a total of $1 million+ to a suspected Vancouver criminal. The security for their mortgages was a grow-op.
BMO reportedly approved the man for $976,000 on the property—which was bought for $980,000. RBC then supposedly lent him $70,000 two days after the house was raided by police.
In both cases, the man couldn’t prove his income and had zero or little equity. The house had also been established as a known grow-op before the mortgages.
This is obviously a PR “disappointment” for the big banks (see Canada’s Biggest Mortgage Fraud for the prior one). If true, it reinforces the point that non-bank channels are not the only occasional facilitators of mortgage fraud. Despite all their supposed checks and balances and trained underwriters, banks also make “mistakes.” Fortunately, these kinds of egregious oversights are far from commonplace.
For the record, both banks appear to have denied these allegations according to the Vancouver Province. We’ll follow up on the outcome when more is known.
Sidebar: BC’s Civil Forfeiture Office launched in 2006, and works with law enforcement agencies to seek the forfeiture of assets obtained through criminal activity.