Unscrupulous lending and Illicit fund transfers from China to Canada were major factors in Canada’s real estate bubble.

Offshore income scams orchestrated to obtain loans from local banks, along with the massive transfer of illegal funds from China to Canada, have caused significant harm to the Canadian real estate market, a recent investigative report has indicated.

On Feb. 6, The Bureau, a Canadian investigative news site, published the results of an investigation prompted by a whistleblower at the Hong Kong and Shanghai Banking Corporation (HSBC) of Canada. The whistleblower, whom The Bureau identified as “D.M.,” alleged that Toronto-area HSBC branches had issued millions in home loans to Chinese diaspora buyers claiming improbable incomes or non-existent jobs in China. The Bureau published a follow-up report on Feb. 16.

In one instance, the whistleblower alleged that a Chinese immigrant falsified her income to the tune of $763,689 in Canadian dollars. Using forged Chinese employment records, she secured HSBC mortgages, increasing her real estate portfolio to at least five properties in the Greater Toronto area. The woman, whom The Bureau called “Ms. D.” variously described herself as a realtor, a homemaker, a schoolteacher, and a medical technology company executive.