Over $7 billion laundered in B.C. last year: report

VICTORIA (NEWS 1130) – There has been a lot of speculation about just how much money is being laundered in B.C. Two new reports done for the government are giving us the bottom line.

$7.4 billion was laundered in this province last year, including $5 billion in real estate — resulting in a five per cent increase in home prices.

That $7.4-billion figure is a conservative estimate.

Five per cent might not seem like a lot, but former senior RCMP officer Peter German said, “If you’re looking at a concentrated area — where there’s been a lot of flipping, a lot of movement, a lot of unusual sales, a lot of over-market sales, a lot of private mortgages — then you start to wonder. One can only imagine the impact on residential housing in that area.”

This is some of the information in 538 pages of reports from German and Maureen Maloney, who have conducted investigations for the attorney general.

They describe their findings as shocking.

“Equally disturbing to me is the ease with which Dr. German and a very small team with very limited time and no access to confidential law enforcement records found literally thousands of specific properties and transactions that are high risk for money laundering, tax evasion, or both. One can only imagine what his team would have uncovered with access CPIC or PRIME-BC, law enforcement databases of criminal records and organized crime affiliated individuals,” B.C. Attorney General David Eby said.

“His team identified a student with a registered address at a rented office outside B.C. who purchased 15 properties in the same condo building for $29 million, a homemaker who bought more than a dozen downtown rowhouses over three years for $4.1 million, another homemaker who over three years bought five luxury homes worth a total of $21 million,” he said.

The province out with latest money laundering report. Shocking.
7.4 billion in bc last year – 5 billion in real estate accounting for a 5% increase in prices.#bcpoli #vanre pic.twitter.com/tEWNPacf8J

— LizaYuzda (@LizaYuzda) May 9, 2019

Eby also said German’s team found a luxury car reseller who owns three homes in Metro Vancouver worth $8.6 million with multiple mortgages “With each new mortgage layer offering a lower rate of interest than the previous layer of mortgages.”

“They found a $3.5-million Gulf Island property, acquired with funds allegedly embezzled from a $90-million loan fraud in India, owned through a company registered in a high-risk jurisdiction, using a post office box address for service,” he said.

“They found 494 different properties with four to 29 mortgages, registered and repaid in rapid succession — a red flag for money laundering.”

Eby says the findings are “stark evidence” of what can happen when there is “an absence of oversight” and a “weakness of data collection.”

He calls it a “malignant cancer” on the economy and society.”

Maloney is recommending 29 changes, which include more transparency for cash transactions and sharing information between agencies and provinces.

Overall, they found money laundering in Canada totalled $48 billion last year.

This $7.4 billion in bc and $48 billion across Canada last year are conservative German and Maloney say the range is 5.6-14 billion in bc – 43-106 Canada. Both say bc can take steps to plug gaps/loopholes but Canada should act as well. #bcpoli #vanre

— LizaYuzda (@LizaYuzda) May 9, 2019

“Our housing market should be used for housing people, not for laundering the proceeds of crime,” said Finance Minister Carole James. “The amount of money being laundered in B.C. and through real estate is much more than anyone predicted.”

RELATED: ‘Pissed off and angry’: Port Coquitlam’s mayor demands accountability after dirty money report

The red flags Peter German lists that what’s being sold isn’t being bought legally #bcpoli #vanre pic.twitter.com/9l5eeIeONj

— LizaYuzda (@LizaYuzda) May 9, 2019

“Wealthy criminals and those attempting to evade taxes have had the run of our province for too long, to the point that they are now distorting our economy, hurting families looking for housing and impacting those who have lost loved ones due to opioid overdose,” said Eby.

FULL REPORT: Expert Panel on Money Laundering in Real Estate:

[pdf-embedder url=”https://www.citynews1130.com/wp-content/blogs.dir/sites/9/2019/05/09/Combatting_Money_Laundering_Report.pdf”]

Peter German’s report:

[pdf-embedder url=”https://www.citynews1130.com/wp-content/blogs.dir/sites/9/2019/05/09/Dirty_Money_Report_Part_2.pdf”]

 

Re working with feds and tightening up fintrac (mandating all large cash transactions are reported as is done in the US) @Dave_Eby says there’s some indication feds are on side – but noting its “taken us a long time to get Ottawa’s attention on this” #bcpoli #vanre

— LizaYuzda (@LizaYuzda) May 9, 2019

German had already told British Columbians how organized crime laundered millions of dollars worth of ill-gotten gains through B.C. casinos, as well as through the luxury car market.

On Tuesday, Eby called German’s luxury car-related report “disturbing confirmation that money laundering in B.C. is a problem that certainly goes beyond casinos.”

Eby said, “In the luxury car market, there’s no financial reporting of large cash purchases, no oversight of international bank wire transfers, and no apparent investigation or enforcement. Individuals with high-level criminal records are alleged to be principals in several used luxury car dealerships in the provinces.”

RELATED: B.C. minister fears money laundering involves billions of dollars, cites reports

He added that he believes most luxury car sellers support stronger regulations, noting changes are in the works to better track any cash transactions higher than $10,000.

Last June, German estimated money laundering in B.C. amounted to more than $100 million in his government-commissioned Dirty Money report into activities at provincial casinos.

 – With files from Marcella Bernardo, Estefania Duran, Martin MacMahon, Hana Mae Nassar, Dean Recksiedler