Mortgage Broker Issued Significant Two-Year Suspension, $30,000 Penalty

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BC Financial Services Authority has issued a penalty of $30,000 against mortgage broker Jessica Labonte, suspended her registration as a mortgage broker immediately and barred her from applying for registration for a period of two years for conducting mortgage business in a manner contrary to public interest.

BCFSA began investigating Labonte after an open internet search revealed a news story about a property in Kelowna that was the subject of a BC Civil Forfeiture court action for allegedly being purchased with illicitly derived funds. BCFSA staff determined that Labonte had acted as mortgage broker for the transaction and subsequently opened an investigation into Labonte’s activities. The investigation identified six deals where Labonte’s conduct was of concern and that involved four borrowers with mortgage application dates between March 2017 and March 2019.

Labonte admitted to all of BCFSA’s allegations in the notice of hearing including:

Failing to use reasonable due diligence when verifying the accuracy of income and documentation that she submitted to lenders;
Submitting inaccurate information in support of the borrowers’ income, including altered Notice of Assessments and T1’s where she knew or ought to have known that the documents were altered or did not represent the true income for the borrower;
Providing misleading or false information to lenders; and
Failing to keep books and records necessary for the proper recording of business transactions and financial affairs.

The suspension period issued to Labonte is significant and is intended to serve as a deterrence to others who may engage in similar conduct, while supporting public protection.

In addition to the penalty and a two-year suspension, Labonte must pay investigation costs in the amount of $13,736.49.

On January 12, 2024, Labonte filed an appeal with the Financial Services Tribunal against BCFSA’s decision seeking a reduced suspension period. However, the suspension order remains in force pending the outcome of the appeal.