REALTORS WARNED OVER FRAUD, GROW-OPS

Criminals Rent Or Buy City Homes, Apartments

Kwinter Calls Them A 'Serious Threat' To Health, Safety

Realtors should be vigilant to scams such as home buyers using
property to make drugs or unscrupulous operators who commit mortgage
fraud, says Monte Kwinter, Ontario minister of community safety and
correctional Services.

"If someone comes up to you and says they don't want to see anything
but the basement and they pay you in cash, you have a problem,"
Kwinter told about 2,000 realtors gathered for the Toronto Real
Estate Board's annual general meeting in Richmond Hill yesterday.

Kwinter called the use of property for the production of drugs like
marijuana or crystal meth a "serious threat to Ontario's safety and
the health of Canadians."

Criminals have been renting homes or apartments, "increasingly in
urban areas, and have become a danger to all of us," Kwinter said.
Some of the marijuana is exported to the United States by gangs in
exchange for guns and harder drugs, he said.

Crystal methamphetamine, a highly addictive drug that can cause brain
damage and other serious health problems, also overburdens the health
system. The drug mixture is also unstable and can cause an explosion.

Grow-ops and mortgage fraud have become major concerns for realtors.
In several highly publicized incidents, homeowners ended up
discovering that they were in danger of losing their properties, or
that they purchased a home that was used as a former drug factory.

Kwinter, who operated a commercial real estate firm before entering
politics, also talked about legislation the province intends to
introduce this fall to protect Ontario property owners from having
the title to their homes stolen. The legislation was prompted by a
series of Toronto Star articles earlier this year.

Measures include increasing fines for those convicted of fraud to a
maximum of $50,000 from the current $1,000. But he warned that the
"government is not able to solve this (real estate fraud) alone.

Police, financial institutions and the public must develop plans to
combat the crime."

Staff Inspector Stephen Harris, of the Toronto police fraud squad, a
panellist on mortgage fraud issues at yesterday's meeting, said
realtors must be careful not to be "blinded by the commission that
they will make on a potential sale.

"Sometimes people don't see red flags and it's just wilful blindness."

Harris said it is important to follow basic procedures such as making
a copy of a property purchaser's identification.

"Even if this is a forged document, at least we have a photo of the
criminal," Harris said.

Chris Mathers, a former RCMP officer who now operates his own crime
and risk consulting firm, said the province's proposed mortgage fraud
legislation is "not perfect, but at least it will make it harder for
these guys, and that's the point."

Some realtors in the audience expressed concern that they might be at
risk from criminals if they informed on them, such as revealing the
location of a suspected drug operation.

"Who is going to protect my family if I report what I see?" asked
HomeLife agent Dan Williamson.

Harris said the identity of informants is protected by police,
adding, "Without someone reporting this, the problems will only continue."

Last month, the provincial government passed a law giving police,
municipalities and electricity providers increased power to crack
down on marijuana grow houses.

The province is also considering a central database of homes once
used to make drugs, where potential purchasers can learn the home was
used as a grow-op. Marijuana grow houses may be structurally
compromised with mould or with faulty electrical wiring from tampered circuits.

Since August, municipal officials in the province have been
responsible for inspecting properties that police have identified as
grow houses to make sure they are safe.