FINTRAC sanctions three firms

Federal anti-money laundering agency, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), is sanctioning three firms — a small bank, a real estate broker and a precious metals dealer — for alleged compliance violations.

FINTRAC announced an administrative penalty against London, Ont.-based VersaBank, alleging that it committed two “serious” violations of the anti-money laundering (AML) requirements.

Specifically, it alleged that VersaBank had inadequate policies for the ongoing monitoring of higher risk clients. It alleged that the bank failed to correctly identify “elevated” and “high-risk” clients in at least seven cases — including three instances where clients should have been identified as “elevated” risk due to factors, such as negative media reports, and with three clients that triggered multiple alerts of its internal controls, and should have triggered additional monitoring.

The bank has paid its $42,075 penalty, and the case is closed.

At the same time, FINTRAC also announced an enforcement action against Birks Group Inc., the jewelry retailer and dealer in precious metals and stones, alleging that it committed three “serious” violations of the AML rules.

Specifically, it alleged that the firm’s policies and procedures failed to document key regulatory requirements, followed inadequate risk assessment procedures, and didn’t review and test its AML policies and procedures within two years, as required.

The agency imposed a $51,562.50 penalty against Birks — however, the firm is appealing the agency’s ruling to the Federal Court.

Finally, a real estate brokerage based in Kitchener, Ont., RE/MAX Twin City Realty Inc., was fined $24,750 for one alleged violation of the rules, involving weaknesses in its risk assessment procedures.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.