Money Laundering: "The Vancouver Model"

[whatnext]

Wow, I guess you truly are a world class city when you have a method of money laundering named after you! One can only wonder how long the BC Liberals turned a blind eye to this.

...In his speech, Eby said he will never forget the first briefing he received from members of B.C.’s gaming enforcement branch when he became attorney general last summer.

“One of the members of the public service said, ‘Get ready. I think we are going to blow your mind.’ While I cannot share all of the details, I can advise you that the briefing outlined for me allegations of serious, large-scale, transnational laundering of the proceeds of crime in British Columbia casinos,” Eby said. “And I was advised that the particular style of money laundering in B.C. related to B.C. casinos is being called, quote, ‘the Vancouver model’ in at least one international intelligence community.”...

...Eby suggested that a “lax attitude” towards regulation of B.C. casinos, during a period when the previous government had enjoyed “massive increases in provincial gambling revenue,” seems to have contributed to the problems today in B.C.’s gambling system.

Eby pointed specifically to a decision by the B.C. Liberal government to cancel funding of a police unit that tackled illegal gambling, after the unit identified concerns with organized crime influence in B.C. casinos and proposed changes “to improve the ability of the existing policing team in identifying and prosecuting offenders.”...

...Eby also said that he believes B.C.’s property ownership system — in which true owners of property can hide behind opaque legal mechanisms — could be attracting foreign criminals and corrupt officials seeking to hide wealth in the province. Eby said Finance Minister Carole James is working on reforms to pull back legal veils that cover true ownership of property and corporations.

Eby pointed to a 2016 study by Transparency International that showed real estate buyers in B.C. are using shell companies, trusts and nominee buyers to hide their beneficial interest in property....

http://vancouversun.com/news/local-n...y-general-says

[whatnext]

No comments? I guess nobody is shocked then.

An older story about clients' real estate deposits pilfered from a Richmond lawyer now ties into this after a new conference yesterday:

Richmond real estate lawyer Hong Guo says Chinese police have charged two of her former employees in connection to the disappearance of about $7.5 million that Guo alleges was stolen from her firm’s trust account, laundered through B.C. Lottery Corp. casino accounts, and transferred to China in the form of casino chips.

At a press conference Monday, Guo claimed that through her own investigations in B.C. and China, she has forwarded sufficient evidence to Chinese police authorities in order to secure charges against her former employees.

Guo claimed that through court actions, she has obtained B.C. casino transaction records to support her case.

Postmedia News has reported extensively on Guo’s case since late 2016. However, Guo’s allegation that suspects exploited weaknesses in B.C. Lottery Corp. accounts in order to launder funds stolen in Richmond and to transfer the criminal proceeds to China, will receive heightened scrutiny in the midst of an independent review into allegations of transnational money laundering in B.C. casinos. The first recommendations of Attorney-General David Eby’s reviewer Peter German will be released Tuesday...

http://vancouversun.com/news/local-n...ugh-b-c-casino

[rofina]

I think everyone should be appalled at the level of corruption going on here.

I genuinely feel that people do not have a firm understanding of what the Liberals have allowed to happen to this province.

[retro_orange]

Oh I am. I just don't know what to say anymore.

I say ban foreign ownership for 5 years as a test period. If it is not foreign investment like developers want you to believe then there should be no effect to their business. If it does and causes a crash then we will know who to blame and we must hold them accountable.

I say that there should be a clause in all mortgages that states if it has been found the developer falsified the value of the suite then the remaining value of the mortgage should be paid by the developer if the value of the suite crashes within 10 years of purchase.

We are not talking about a car here.

[whatnext]

Originally Posted by rofina

I think everyone should be appalled at the level of corruption going on here.

I genuinely feel that people do not have a firm understanding of what the Liberals have allowed to happen to this province.

It certainly gives the NDP a very big stick to beat the BC Liberals with. Particularly since one of the leadership candidates was finance minister during the time in question.

This really touches almost every residential project discussed here (what's funding them) and drags them into the fentanyl crisis and a host of other societal ills.

The Money Laundering Scam That Turns Drug Cash into Real Estate

If you've read a headline about Metro Vancouver recently, chances are it was about drug overdose deaths or super-inflated housing costs. Synthetic opioids like fentanyl continue to kill an unprecedented number of people, and speculation in the real estate market has inflated housing costs beyond reason.

These two issues have been plaguing our community for years, and with more than 1,000 overdose deaths so far this year and an average one bedroom renting for more than $2,000 a month, they're not going away anytime soon. As a reporter, I've stopped many times to think about how the two catastrophes are related—how they may somehow make each other worse.

Nobody has drawn a more direct and surprising line between them than Postmedia reporter Sam Cooper. He's spent the better part of two years on an investigative series uncovering the way organized crime groups use casinos to launder drug money and invest in lucrative Lower Mainland property(bold mine)...

https://www.vice.com/en_ca/article/p...to-real-estate

[WarrenC12]

Massive increase in property tax and make it an eligible income tax credit. 1% of property value would be good.

[Doug]

Originally Posted by rofina

I think everyone should be appalled at the level of corruption going on here.

I genuinely feel that people do not have a firm understanding of what the Liberals have allowed to happen to this province.

And the current government will be no different. Many people are living off of housing appreciation which covers up overall economic weakness brought on by excessive regulation (ex. over the top environmentalism, restrictive land use, high taxes).

[whatnext]

Originally Posted by Doug

And the current government will be no different. Many people are living off of housing appreciation which covers up overall economic weakness brought on by excessive regulation (ex. over the top environmentalism, restrictive land use, high taxes).

Incomes have been stagnant for years, under both Conservative and Liberal governments, it is incorrect to try and pin it on environmentalism or anything specifically done by the current government. You are correct that both Tories and Liberals were content to allow house price inflation to cover up wage growth weakness.

[Doug]

Originally Posted by whatnext

Incomes have been stagnant for years, under both Conservative and Liberal governments, it is incorrect to try and pin it on environmentalism or anything specifically done by the current government. You are correct that both Tories and Liberals were content to allow house price inflation to cover up wage growth weakness.

I'm pinning it on governments going back decades, pretty much all that came after Bennett (although Campbell was so we at better). BC is extremely unfriendly to business investment.

[whatnext]

BC casinos will be required to verify where high rollers are getting their money. Curious to know how rigorous enforcement will be.

New restrictions aimed at money laundering in B.C. casinos were imposed on Wednesday, almost two years after similar recommendations were rejected by the BC Lottery Corporation.

The changes, brought in to disrupt the flow of suspicious transactions, had first been proposed in 2015 by regulators, and the province's gambling and enforcement branch renewed calls for a clampdown the following year, documents show.

"The rule changes are not glamorous or innovative," Attorney-General David Eby said Wednesday in an interview. Under the new regime, high rollers must verify the source of their funds if they seek to buy $10,000 or more in chips within a 24-hour period at a casino in B.C. – whether they use cash, bank drafts or certified cheques – before they are allowed to gamble...
https://www.theglobeandmail.com/news...ticle37570414/

[trofirhen]

Originally Posted by rofina

I think everyone should be appalled at the level of corruption going on here.

I genuinely feel that people do not have a firm understanding of what the Liberals have allowed to happen to this province.

I think you are right, and I think it's apalling. Case closed.

[CanSpice]

n/m

[djmk]

Originally Posted by trofirhen

I think you are right, and I think it's apalling. Case closed.

The article does say that the amount of cash has decreased since 2015 from "increased enforcement".

[djmk]

I am curious how they are going to verify a source of funds coming in from another country. Sure, I understand cash because you have declare everything over $10,000 coming into the country anyway. However, bank drafts? Are they going to ask for tax returns from Chinese high rolling tourists?

[whatnext]

Originally Posted by djmk

I am curious how they are going to verify a source of funds coming in from another country. Sure, I understand cash because you have declare everything over $10,000 coming into the country anyway. However, bank drafts? Are they going to ask for tax returns from Chinese high rolling tourists?

That's just it. In the article I posted about the squabbling Chinese owners of the three properties, it's clear there's a sizable demographic that has no compunction about lying on such forms. Canadians are so naive when it come to trusting everyone to act in a law abiding manner.

[GMasterAres]

I know quite a few conveyancers who are fairly open to me that they see foreign investors put on their applications that they are residents when they aren't. In some cases they have agents actually write down they are residents.

They bank on not getting caught but if they get caught, it is just the cost of doing business because any fines either aren't enforced or are low enough that the reward is greater than the risk.

I think you're spot on that we're extremely naive as a society. The truth is most other countries are riddled with corruption and people that make it a daily task to lie to as many people as you can. Just start going through countries that operate with this mentality. Greece, Italy, Spain, Brazil, Colombia, China, Russia, Saudi Arabia, UAE, the list goes on. If you start going through all the countries of the world you'll be hard pressed to find one whose society isn't based largely on corruption and bribes.

It's simply human nature to lie to get ahead.

This is also why EVERY SINGLE regulation that has been put in place country wide that requires either some sort of voluntary disclosure or self policing has failed and failed in "fire and fury."

When you go to Richmond to a medical clinic people that need social assistance and you see two "patients" drive up in brand new 2018 Mercedes wearing designer clothes, it just underlines this naivety that we have as a society.

And if it isn't naivety then it is pure and simple corruption by our own politicians and regulators. BC Lottery Corp doesn't give two craps about money laundering. They make money off corruption and that's all that matters. The only reason they are changing is because it is all over the news. But if it wasn't, they would not change, so I can't give them a naive pass, they are just corrupt themselves.

[rofina]

Originally Posted by whatnext

That's just it. In the article I posted about the squabbling Chinese owners of the three properties, it's clear there's a sizable demographic that has no compunction about lying on such forms. Canadians are so naive when it come to trusting everyone to act in a law abiding manner.

This.

Were being taken advantage of, often in the name of political correctness.

The irony of it is - what has made Canada a tolerant and inclusive place is the rule of law.

A law with values that we commonly share, regardless of race, color or creed.

These people obviously do not have the same regard for the rules and law that make this country a great place to be.

[GMasterAres]

Originally Posted by djmk

I am curious how they are going to verify a source of funds coming in from another country. Sure, I understand cash because you have declare everything over $10,000 coming into the country anyway. However, bank drafts? Are they going to ask for tax returns from Chinese high rolling tourists?

Only way they can curb it is to change the policy that Casinos only accept cash. Then when cash is put down, the money is grouped and kept flagged against the individual that provided it. That way if they win they first get back the money they put in then any extra is paid out. If they lose or cash out, they get back the exact dollar bills they put in (same serial numbers).

Unfortunately that's a lot of work and would only have an impact if you applied it to everyone not just foreigners because if you made an exception for permanent residents or Canadian citizens, then the foreigners using it to launder would just get someone to do it on their behalf just exactly how they get around the foreign buyer's tax on real estate these days.

I dunno, honestly I don't think you completely ever get rid of money laundering but there is a hell of a lot more that the BCLC can do to reduce the impact. if Las Vegas can't get rid of money laundering with their size and experience, we will never do it, but we shouldn't turn a blind eye because that is what BCLC has been doing quite frankly.

[casper]

Originally Posted by jhausner

Only way they can curb it is to change the policy that Casinos only accept cash. Then when cash is put down, the money is grouped and kept flagged against the individual that provided it. That way if they win they first get back the money they put in then any extra is paid out. If they lose or cash out, they get back the exact dollar bills they put in (same serial numbers).

Unfortunately that's a lot of work and would only have an impact if you applied it to everyone not just foreigners because if you made an exception for permanent residents or Canadian citizens, then the foreigners using it to launder would just get someone to do it on their behalf just exactly how they get around the foreign buyer's tax on real estate these days.

I dunno, honestly I don't think you completely ever get rid of money laundering but there is a hell of a lot more that the BCLC can do to reduce the impact. if Las Vegas can't get rid of money laundering with their size and experience, we will never do it, but we shouldn't turn a blind eye because that is what BCLC has been doing quite frankly.

I think one of the "features" of Canadian business culture and Canadian consumers that helps reduce the likelihood of money laundering and bribery is the fact we are generally not a cash society. Cash transactions are much harder to trace. Canadian consumers use cash far less than other countries.

People paying and using cash is far more common in the US and other parts of the world. In Canada cheques, money drafts, electronic funds transfer is generally how Canadian business move larger sums of money around. It generates an audit trail.

As for asking people to fill out a form that is filled away declaring the money they bring into a casino is clean. Good luck with that having any impact.

[Cypherus]

Originally Posted by retro_orange

Oh I am. I just don't know what to say anymore.

I say ban foreign ownership for 5 years as a test period. If it is not foreign investment like developers want you to believe then there should be no effect to their business. If it does and causes a crash then we will know who to blame and we must hold them accountable.

I say that there should be a clause in all mortgages that states if it has been found the developer falsified the value of the suite then the remaining value of the mortgage should be paid by the developer if the value of the suite crashes within 10 years of purchase.

We are not talking about a car here.

Foreign ownership? You're buying into false mainstream media narrative. No, it's always been permanent residents who use "foreign capital" to buy up real estate. This means that, for example, a Chinese student attending UBC (and featured on Global News), can buy a $20 million plus property near Jericho Beach with CIBC lending a 7 million mortgage to cover the shortfall. He is a permanent resident, but the money comes from his corporate executive parents in China. No, foreign ownership of the house is never registered, but in the name of, for example, Mr. Ling instead - 21 year old student of UCB wanting to become dentist. The money comes from overseas registered in the name of a Permanent resident in Canada. It protects the family wealth from Communist China authorities at the cost of affordability of Canadian residents, while saving on foreign buyers tax too. The condo and housing market of Vancouver can forever go up based on this reality. It has been since 1991. Get it?