Humber/Ontario Real Estate Course 3 Exam Practice

Salesperson Freeman is suspicious of a $12,000 deposit due to potential money laundering. What should Salesperson Freeman do?

1. Report the matter to FINTRAC as a suspicious transaction.

2. Submit the $12,000 deposit to FINTRAC as a large cash transaction.

3. Report the matter under terrorist property reporting to FINTRAC.

4. Notify FINTRAC through a 'Confirmation of Money Laundering Report.'

5. Inform the Real Estate Council of Ontario about the transaction.

6. Consult with legal counsel before reporting the transaction.

The correct answer is: Report the matter to FINTRAC as a suspicious transaction.

Salesperson Freeman should report the matter to FINTRAC as a suspicious transaction because this action aligns with the legal and regulatory obligations in place to combat money laundering and terrorist financing. Under Canadian law, when a financial professional, like a real estate salesperson, has reasonable grounds to suspect that a transaction is related to the proceeds of crime, they must report it to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). This reporting is crucial as it enables proper scrutiny and investigation by the authorities into potentially illicit activities. Reporting a suspicious transaction helps protect the integrity of the real estate market and ensures compliance with anti-money laundering regulations. Maintaining vigilance in such situations is essential, and reporting assists in preventing the misuse of the financial system for illegal objectives. While the other options mention various reporting mechanisms or legal consultations, they do not specifically address the immediate obligation to report suspicious activities to FINTRAC, which is the most critical response in this scenario.