Earlier police investigations into money laundering suggested that in the west coast province, the practice was a multi-billion dollar operation, with estimates as high as $7 billion in 2018.
Yesterday the public inquiry heard that Canada’s highly regulated banking system was in fact very popular for ‘cleaning’ illicit money.
The Cullen Commission of Inquiry into Money Laundering yesterday heard that while criminals and groups have traditionally tried to launder money, it’s now become an industry in the metro Vancouver area with a professional industry to facilitate the movement of money across borders and laundering cash.
Criminologist Stephen Schneider, a professor at St. Mary’s University in Halifax was the first expert witness at this overview session of the inquiry, scheduled for the next three and half weeks.
He said that the idea is to convert illegal or dirty money into an apparently legal form in an effort to hide its origins.
- RCI: Jan 18/19: Huge money laundering operation in B.C. alleged
- RCI: May 9/19: Money laundering in B.C.- first casinos, now exotic cars
- RCI: May 10/19: Money laundering and real estate in B.C. and across Canada
The commission heard that casinos, exotic car and luxury property purchases are methods to ‘clean’ cash. Student enrollment at universities is another whereby a student pays thousands of dollars in tuition in cash, then withdraws getting the money back in a cheque from the reputable institution.
Canada’s six big banks offer a number of services that are attractive to launderers, including automatic bank machines and a variety of online services that avoid the potential of raising suspicions during in-person transactions. The variety of investments and mortgage opportunities also help turn suspicious money into legitimate products.
Schneider says the illicit funds come from drugs, human trafficking, prostitution and fraud from domestic and international gangs. He also said that while China has a $50,000 limit on personal investments abroad, vast amounts of money, in the many billion has been sent into Canada. While that money may not have been earned through crime, the vast sums have likely added to the rapidly increased costs of property but also fuelled the creation of the underground money laundering business co-mingling with the illicit money.
The inquiry was called almost exactly one year ago after reports of hockey bags of cash brought to casinos, and how vast sums were allegedly being laundered through purchase of exotic cars and expensive properties.
The hearings began in February and after this session will continue in September with a final report in May next year. The public inquire cannot convict or determine liability, but rather find out why and how the practice is occuring and how it may be prevented
additional information – sources
- CBC: B.Lindsay: May 25/20: Canadian banks offer ‘one stop shopping’ for money launderers, B.C. inquiry hears
- CBC:P Woodward: Jul 1/18: How CBC journalists laundered $24K at B.C. casinos
- Canadian Press (via The Province) May 25/20: ‘Vancouver Model’ marries dirty money with Chinese capital flight, inquiry hears.
- Global News: J. Hua: May 25/20: Money laundering in Vancouver appears to be ‘cottage industry’ inquiry hears.
- CBC: B.LindsayMay 8/19: Money laundering funded $5.3 billion in B.C. real estate purchases in 2018, report reveals
- CBC: P.Woodward: May 10/19: B,C. colleges vulnerable to money laundering, report finds