British Columbia’s crusading Attorney General David Eby, who has been leading a campaign against money-laundering in his province, last week urged federal politicians of all parties to commit to fighting it all over Canada.
To demonstrate just how flagrant money laundering has been in the past, he showed delegates of the Union of B.C. Municipalities annual convention a video showing men bringing shopping bags of cash into casinos and pushing large stacks into bill counters. He wondered out loud why no one at the casinos thought to question bringing $500,000 into the casino, in clear violation of provincial law.
Those violations occurred two years ago. Since that time B.C. has clamped down on casino financial practices, such that the government-run casinos saw a decline in gaming revenues. One change now requires regulators to be in attendance at the casinos during their busy times, rather than during typical business hours.
Because of the casino clamp down, money laundering efforts have migrated to real estate and luxury cars, with the money coming from opioid sales.
Eby was joined by Finance Minister Carole James. Although new laws and regulations are arriving to help combat money laundering, it can’t end there, they said. Eby compared stamping out money laundering to the old whack-a-mole game.
One problem, they said, is the difficulty of distinguishing criminals from legitimate business people. The criminals tend to operate in highly prosperous countries such as Canada because it is easier to hide the laundered cash.
According to the report Combating Money Laundering in B.C. Real Estate by Maureen Maloney, $46 billion was laundered in Canada in 2018. One effect was the increase costs for buying real estate. Maloney told the group “We are still coming to terms with how money laundering affects civil society.”
Another complicating factor is determining the country of origin of the funds, according to Maloney. In the case of a country like China, it’s often difficult to get information because there isn’t an information exchange treaty between the two nations.
The problem in a free society is requiring people to explain where they acquired funds without being overly invasive. One suggestion has been made to adopt “unexplained wealth orders.” Eby commented, “I think they’re awesome. I think they could be incredibly challenging. They are incredibly effective for high-profile cases for where police need to explain where money is coming from. They are incredibly invasive.”
Meanwhile, a British Columbia Supreme Court judge has ruled that millions in assets frozen in the province’s biggest-ever money laundering case must be released to the accused launderers, Caixuan Qin and Jian Jun Zhu.
According to the Vancouver Sun, Associate Chief Justice Heather Holmes said the assets were seized improperly because the decision took place without a defense attorney present. She maintained the freeze on physical assets, including a multimillion-dollar home, gift cards, jewelry and casino chips, but ordered $2 million in cash to be released.
Caixan Qin and her spouse Jian Jun Zhu are accused of running an underground bank called Silver International that allegedly laundered as much as $220 million a year. They have denied any wrongdoing and said that search and seizures violated their rights.
In her ruling, the judge wrote, “The court must take the misconduct very seriously, because misleading statements in an ex parte hearing undermine the integrity of the process, and may even obliterate it.”
Matthew Nathanson, Qin’s lawyer, said the ruling “reaffirms the high standard of fairness and candor required of parties to ex parte proceedings where only one side is present. Second, it demonstrates that there will be real consequences where parties do not live up to this standard.”
The civil forfeiture office has 30 days to appeal the decision.
Hope Latham, a spokeswoman for the Solicitor General’s office, said: “The Civil Forfeiture Office will be reviewing this decision and will not be commenting further during the appeal period.”
