She was caught providing false information to lenders
The Financial Services Tribunal has dismissed an appeal by a Kelowna mortgage broker, upholding a two-year suspension and $30,000 penalty imposed on her for providing false information to lenders on behalf of a client later charged with fentanyl trafficking.
The investigation into Jessica LaBonte began after authorities moved to seize the home of one of her former clients as proceeds of crime. The probe uncovered misconduct in six mortgage deals involving four borrowers between 2017 and 2019.
The most serious case involved LaBonte submitting false income statements for Michelle Collins, a client whose home was later raided by police and found to contain significant amounts of drugs and cash.
While charges against Collins were dropped, her co-accused, Nigel Byrne, pleaded guilty to drug trafficking charges. The BC Civil Forfeiture Office is still pursuing the seizure of the property, which Collins contests, claiming she earns legitimate income through a cleaning business and house flipping.
Read next: Former Mortgage Architects agent fined for unlicensed dealings
The tribunal found LaBonte knowingly submitted inflated income and rental income information, along with altered tax forms, to lenders. She also failed to properly verify Collins’ income in a previous mortgage application.
LaBonte admitted to storing her mortgage records in a friend’s garage, which later caught fire, putting clients’ private information at risk.
In her appeal in January, LaBonte argued that the two-year suspension was excessive and sought to introduce new evidence regarding the impact of the sanctions on her.
However, tribunal panel chair Mona Muker dismissed the attempt, stating: “I find that the appellant’s application to admit new evidence was largely an attempt to reargue her cause on appeal.”
The tribunal concluded that the penalties were consistent with similar cases and not unduly harsh or unreasonable.
In addition to the suspension and $30,000 penalty, LaBonte was ordered to pay $13,736.49 in investigation costs.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
