B.C. vows crackdown after Globe investigation reveals money-laundering scheme
Not really new as it's been going on for a while but interesting to see it recapped. I've seen a lot of businesses dealing with customers who are money launderers either locally from BC or China. Government employees asleep at the wheel again....now they vow to do something after the story was published.
Full story at this link:
https://www.theglobeandmail.com/news...ticle38004840/
B.C. vows crackdown after Globe investigation reveals money-laundering scheme
Through millions of dollars in private lending and mortgages, people connected to the fentanyl trade are parking their illicit gains in the Vancouver-area property market – and using alleged threats, extortion and deception to make sure they get their money back.
It was dirty money – stuffed in the trunk of their Mercedes and behind a seat in their Range Rover. The rest was squirrelled away in a safe and a night table, at a condo they were using.
Small bills – $660,970 in all – covered with traces of deadly fentanyl and other street drugs. Police seized the cash in the spring of 2016, when they arrested Ying Zhang, Zhi Guang Zhang and Wei Zhang, after putting them under surveillance and watching them conduct business in parking lots in and around Vancouver.
They weren't charged with any crimes, despite the evidence that they were peddling opioids that kill people. It's not unusual in B.C. for police to forgo pursuing charges when they find dealers in possession of drug money, but not holding actual drugs. The Zhangs did lose their cash, though, for good: A judge ordered it forfeited to the provincial government as "proceeds of crime."
It's a big headache for any drug trafficker: trying to protect illicit profits from being stolen or confiscated. They can't walk into a bank with bags of cash, because staff would be required to report that to authorities as suspicious. And so the money piles up. Until they find a way to launder it.
A Globe and Mail investigation has discovered that the Zhangs and other local residents associated with drug-related crime are effectively parking their riches in Vancouver-area real estate, where it is rendered clean and secure, without actually owning any of the properties.
Just hours after The Globe's investigation was published, B.C.'s attorney-general responded by calling it "very serious and deeply troubling."
"This story confirms our government's commitment to taking action to crack down on money laundering and criminal activity in B.C.," David Eby said.
The Zhangs and others call themselves private lenders – issuing millions of dollars in registered mortgages and short-term loans.
Just as a bank does, they grant a loan, then register a land-title charge against the borrower's real estate, equal to the value of the debt, plus interest. The charge, which gives them a stake in the real estate, remains in place until the debt is cleared. If the property is sold, the loan gets paid out from the sale proceeds, in clean money, all seemingly legal.
Except these financiers are unregulated and unlicensed and the loans they grant are in cash, which is likely dirty money derived from drug deals or other crimes. The Zhangs charge interest rates of up to 39.6 per cent, with some private lenders demanding up to 120 per cent. Court records show that one of the Zhangs' associates is among those allegedly charging that extortionate level of interest, which is double the maximum legal rate.
