Raffle windfall turns into headache for Vancouver Island mayor

View Royal Mayor David Screech was thrilled when he won the 50/50 draw at a Victoria Royals hockey game in November after years of purchasing tickets.

He deposited the $5,100 cashwindfall into his bank account and joked with the teller at his bank about his good fortune.

But then a few weeks ago, Screechand several members of his family, started getting calls from the bank with questions about the deposit.

• Fintrac's money-laundering penalties in limbo after court ruling

Screech says he was told that as amayor, he was considered to be a"politically exposed person" by FINTRAC, the federal agency that monitors financial transactions. As a result,extra scrutiny had to be applied to his finances.

"I had no idea of that," he said. "It was news to me that my bank would just spring this on me."

The designation ofpolitically exposed personis part of federal rules that went into effect in 2017,meant to detect and deter money laundering and terrorist activity financing.

According to information on the FINTRAC website, a politically exposed personis "a person entrusted with a prominent position that typically comes with the opportunity to influence decisions and the ability to control resources."

Family members of such a person are also flagged for extra financial scrutiny.

'It was intrusive'

However, as the mayor of a small municipality that is home to 10,000 people, Screech says he feels thedesignation is being applied too broadly.

"They actually contacted my wife.They contacted our youngest son to ask questions," he said."It was intrusive.It was invasive and I was surprised that in our country they could do all this with what appears to be no accountability."

Screech said he supports measures to crack down on money laundering in B.C., but he questions whether the proceeds from a 50/50 draw should be enough to be flagged.

• Money laundering watchdog scrutinizes Facebook, social media

And as a small business owner, Screechalso has concerns about how the designation, which he understands only applies to him because he chose to run for mayor, could affect his future financial dealings.

But his bank, CIBC, said it follows the requirements of the federal legislation.

"Canadian financial institutions may be required to seek additional information on various transactions involving some individuals who hold prominent positions," CIBC said in a statement.

"We regularly review our policies to ensure compliance with legal and regulatory obligations."

FINTRAC has not yet responded to a request for comment.

To listen to the full interview from CBC's On The Island with Gregor Craigie, click on the link below: