It took 10 months of media scrutiny and public outrage before Canadians learned Manulife Bank of Canada was the mysterious financial institution behind a $1.2-million fine for money-laundering violations.

The same day Manulife’s identity was kept secret last April, a handful of much smaller companies — facing far less severe fines — were publicly named by FINTRAC, the country’s money-laundering and terrorist funding watchdog.

That confusing double standard has triggered a review of FINTRAC’s disclosure policy amid an ongoing Toronto Star/National Observer investigation.

“In exercising my discretion to withhold the name of the bank, I understand that it may not have met public expectations in relation to openness and transparency,” wrote Gérald Cossette, FINTRAC director, in a statement.

“We are going to look to work with Finance Canada to review the legislation in relation to our penalty program. We are also examining our administrative monetary penalty policies to ensure, among other things, that they strike an appropriate balance between the need for transparency and the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.”

The carefully worded statement still makes no reference to the bank at the centre of the controversy — an expression of the agency’s puzzling transparency criteria since its birth in 2008.

Over the past eight years, FINTRAC has named 40 companies for violating the law while keeping secret another 55.

“It’s very unfair to name someone and not name someone else,” says Michael Baumbach, director with The Diamond Exchange, a jewelry store in downtown Toronto with three sales staff that was publicly fined $12,750 by FINTRAC the same day as Manulife.

“Regardless of the money involved, it’s about the principle. They were out to make a point: Don’t mess with FINTRAC . . . . Why would you damage the reputation of a small company — which is the backbone of the country — and not a bank which was, as I understand, engaged in transactions deemed to be suspicious?”

As part of a Toronto Star/National Observer investigation over the past two months, reporters attempted to identify the bank fined by FINTRAC by surveying all 32 Schedule I banks in Canada, asking them to clearly state whether they were involved.

While almost all the banks responded unequivocally, Manulife wrote last Wednesday: “We do not comment on any matters regarding our regulators, whether they are rumour, speculation or fact.”

On Monday, Manulife issued a public statement confirming it was the mystery bank in question.

“The penalty essentially related to administrative lapses in reporting to FINTRAC,” the bank said in a written statement. “Although we operate at the highest ethical standard, we are capable of administrative errors. They were remedied in the first half of 2014 . . . . Manulife did not enable or facilitate money-laundering and media reports to the contrary are inaccurate.”

When the Diamond Exchange was publicly named on April 5, 2016, FINTRAC issued a press release detailing the offences and the company’s conduct. It did the same for two other companies named that day — a Toronto securities dealer fined $28,500 and a Regina jewelry story fined $13,500.

Manulife was fined 20 times more than the other three companies combined. But the bank’s name appeared nowhere on FINTRAC’s website (and still does not).

The only hint of FINTRAC’s first-ever action against a bank was an inconspicuous line added to a penalty chart referring only to an anonymous “bank.”

Over the last three months, the Star and the National Observer have published exclusive details, based on access to information documents, about the offences behind the fine.

Among those findings:

Manulife’s fine, which was reduced twice from an initial $1.8 million, was for five different types of violations of anti-money laundering and anti-terrorism financing law, involving a failure to report transfers totalling at least $12.2 million.

The bank failed to report one suspicious transaction to FINTRAC — labelled a “very serious” violation that experts say undermines Canada’s system to detect financial crimes and trace dirty money.

Manulife also failed to report 1,174 outgoing international electronic transfers of $10,000 or more, 45 deposits of $10,000 or more in cash and four incoming international electronic transfers of $10,000 or more.

The bank was also fined for failing to “develop and apply compliance policies and procedures.”

Based on public records, court documents and public statements, the Star and the Observer also reported the identity of the Manulife client behind the offences: Andrew Strempler, a convicted Winnipeg-based felon and pharmacist who made tens of millions of dollars selling counterfeit medication to Americans over the Internet.

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Strempler was arrested in Panama in June 2012, and extradited back to the U.S. where he was convicted for mail fraud in October of that year and sentenced to four years in prison.

Manulife’s written statement says the bank “proactively worked with law enforcement in both Canada and the United States in relation to the matter underlying the one suspicious transaction report (STR) violation, including advising law enforcement prior to the failure to file this one STR.”

Strempler returned to Canada and appears to have opened a small consultancy business outside Winnipeg.

In recent years, Canadian banks have been named by American regulators for breaching money-laundering regulations. BMO Harris Bank, a subsidiary based in Chicago, was ordered by the U.S. Federal Reserve to reinforce its anti-money laundering policies in 2013. Two years later, Scotiabank was ordered by the New York Reserve to correct deficiencies in their internal oversight.

Even though neither bank was fined, both were named publically as a matter of course.

“Canadians want more transparency, but because of our lax policies we’re going to see more controversies until we get the policies fixed,” said James Cohen, head of Transparency International — Canada. “It has caused confusion among regulators and the public.”

“FINTRAC needs to repeal this idea of discretion and publish public standards for how and when to name (a fined institution).”

The Diamond Exchange’s Baumbach says FINTRAC’s public shaming continues to tarnish his company’s reputation over administrative paperwork requirements.

FINTRAC’s penalties against The Diamond Exchange include: “Failure to develop and apply written compliance policies and procedures; failure to assess and document the risks related to money laundering and terrorist financing; and failure to develop and maintain a written, ongoing compliance training program.”

Baumbach says the company has training manuals and compliance policies in place. If they were insufficient in some way, he says FINTRAC could have advised them on improvements. Instead, they fined and publicly named the company without question.

Mahdi Al-Saady, CEO of Altaif Inc., an Ottawa-based money exchange and transfer company, was hit with a $42,600 FINTRAC fine — and publicly named — in 2014.

The violations for which Altaif was fined included failing to report the sending and receipt of money transfers of more than $10,000 — two of the same violations the unnamed bank was found to have committed.

“I can give you one word for that — unfair,” Al-Saady said in an interview. “When you search our name on Google, you’ll find our name on a list. How are we going to get rid of this?”

For a smaller business like Altaif, the FINTRAC penalty is a one-two punch, he said: the fine itself, plus the long-term damage of having the company’s name listed online as a violator of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Business has suffered since the fine in 2014, he said: “I’ve been rejected from many institutions. Even suppliers, like for currencies, as soon as they see our name, they just refuse to deal with us.”