Money Laundering in BC

[rlock]

Well, it's quite sophisticated, but in the end it is all about masking the sources of the income or transaction. Cash is part of that, but as you said, not all of it.

Just like shell companies and bank accounts in dodgy jurisdictions, the whole point is to escape notice. But it's only possible because the politicians who could close these loopholes don;t do so - and they don't do so because their country club buddies also use the weak rules & enforcement to hide their own wealth.

Well, people have noticed now, since there's no way to hide a problem this big - and they are pissed off.

Just to put the 2018 estimate of laundered money in BC into perspective: you could build major infrastructure, like the entire Skytrain expansion, for that kind of money.

 

[badbadboy]

LOL, kept from her? The BC Liberals under Clark (and now Wilkinson) became the party of money laundering; they never saw anything wrong with what was going on until long after the public did. Deep in their hearts, they still want to pretend it is not happening. Witness how much crying their members still do on behalf of the real estate industry, even after it has become clear that the industry is top-to-bottom corrupt.

Half of Metro Vancouver torn down for condo projects in a city where almost nobody earns the kind of income necessary to afford living in it: did anybody think this was in any way economically sustainable; did anyone think the money was actually coming from the legitimate BC economy?

Decisions were made to sacrifice BC and its citizens on the altar of out of province and out of country interests. They knew - they all knew. Take a look at the number of dodgy projects they approved, and you can see the basis of it all was corruption. Scratch the surface of any of them, and the public face of it was always some sort of fakery.


I said for many years already that the only way to get anywhere in BC was to be some petroleum or mining baron, a gangster, or one of the real estate agents, developers, and shady tax lawyers who service them. Or one of the shady politicians who take money from them in order to have a political career.

Until the recent restrictions came in on shady donations, pols were being openly bribed in the form of political contributions, and paid their corporate mentors back in the form of lax laws & tax loopholes, and non-existent police enforcement. Did you notice how many municipal politicians suddenly retired before the last election? If they couldn't take dirty money from developers, they basically had no career. That tells you they were just proxies & shills all along, put there by someone else to pave the way for this corruption.

You cannot ever expect people who declare that greed is a virtue to ever really stop crime. Sure, they sometimes turn loose the cops on street disorder (to defend property), and throw a bone to the moral puritans - but the real crimes always take place at the top and these are the people who make a career out of enabling it.

As the old saying goes, whenever you hear the word "law & order", ask yourself whose law and whose order. The answer tells you how serious they are about actually stopping crime.

It also touched non Liberal hands too.

See Larry Campbell dodge a reporter's questions about money laundering before dashing off to the Red Chamber. As a board member, Larry has benefited greatly through the board and his shares.

I'd love to see this guy being asked some tough questions if and when an enquiry occurs.

https://globalnews.ca/news/4461524/larry-campbell-refuses-answer-questions-great-canadian-gaming/

(Well said, by the way)

 

[appleomac]

Well, it's quite sophisticated, but in the end it is all about masking the sources of the income or transaction. Cash is part of that, but as you said, not all of it.

Just like shell companies and bank accounts in dodgy jurisdictions, the whole point is to escape notice. But it's only possible because the politicians who could close these loopholes don;t do so - and they don't do so because their country club buddies also use the weak rules & enforcement to hide their own wealth.

Well, people have noticed now, since there's no way to hide a problem this big - and they are pissed off.

Just to put the 2018 estimate of laundered money in BC into perspective: you could build major infrastructure, like the entire Skytrain expansion, for that kind of money.

So you're saying if the ill gotten cash was used by the criminals to, I don't know, build a more robust transit system and charge you to use that much better transit system and potentially profit from it that you would be okay with laundered money? If that's the case, your position boils down to "I haven't benefited from the laundered money". If you've owned a property in Greater Vancouver for a period of time, I would argue you have benefited from laundered money. Heck, that report estimates that property values increased 5% as a result of laundered money in BC real estate - if you're a property owner, you've benefited in increased net worth. Now, if the numbers as reported are accurate, and let just say the BC Government could through civil forfeiture confiscate the $5 billion in illicitly purchased BC real estate. What do you think would happen when $5 billion worth of real estate hits the open market? Problems are easy to identify, enacting solutions is a much more complex matter.

 

[licks2nite]

Yes, but that's still an exercise in trying to connect cash to a crime. Tracing cash back to a crime is extremely difficult to do - probably even harder than trying to stop the initial crime to begin with. Once cash has been layered several times and washed, it's an exceedingly hard uphill fight to trace the chain of cash back to the crime.

So, you figure that a narrative that shines sunlight on anonymous real estate owners behind shell companies is better than a law that would prosecute?

 

[appleomac]

So, you figure that a narrative that shines sunlight on anonymous real estate owners behind shell companies is better than a law that would prosecute?

It might be hard for to believe, but owners of real estate are not anonymous. If you wanted to, you can go to land titles, pay the fee and find out who owns what property. Now, can corporations own property: yes they can. I own property through numbered companies, many people do. If you believe that makes me an "anonymous real estate owner", that's simply incorrect. Just like anyone can pull title on properties, anyone who is motivated can (with very little effort) find out who owns a Canadian corporation. "Shell corporations" exist for many reasons, and often, it has nothing to do with hiding one's identity.

 

[AMG-GTR]

It might be hard for to believe, but owners of real estate are not anonymous. If you wanted to, you can go to land titles, pay the fee and find out who owns what property. Now, can corporations own property: yes they can. I own property through numbered companies, many people do. If you believe that makes me an "anonymous real estate owner", that's simply incorrect. Just like anyone can pull title on properties, anyone who is motivated can (with very little effort) find out who owns a Canadian corporation. "Shell corporations" exist for many reasons, and often, it has nothing to do with hiding one's identity.

You probably already know this as you stated above, but for others;

I have a similar setup with “Property Co.” owning some commercial space. The thing is that I also have International Co. that is a bit difficult to locate for a Canadian due to privacy laws in Int. Co’s Jurisdiction.

My reason was originally for tax purposes (I’m still a Canadian resident) but having my name incredibly hidden is an advantage when it comes to keeping a low profile.

 

[AMG-GTR]

So you're saying if the ill gotten cash was used by the criminals to, I don't know, build a more robust transit system and charge you to use that much better transit system and potentially profit from it that you would be okay with laundered money? If that's the case, your position boils down to "I haven't benefited from the laundered money". If you've owned a property in Greater Vancouver for a period of time, I would argue you have benefited from laundered money. Heck, that report estimates that property values increased 5% as a result of laundered money in BC real estate - if you're a property owner, you've benefited in increased net worth. Now, if the numbers as reported are accurate, and let just say the BC Government could through civil forfeiture confiscate the $5 billion in illicitly purchased BC real estate. What do you think would happen when $5 billion worth of real estate hits the open market? Problems are easy to identify, enacting solutions is a much more complex matter.

I am not pleased with money laundering however every single dollar that we have, at some level, has been involved in some sort of activity that could be classified as criminal or “dirty”.

As for the future of real estate in Vancouver, this is just the beginning. This is why I have virtually no holdings in Canada at the moment. Hell, I even rent my place now and it’s amazing to see that my rent payments are a fraction of how much the value of the property is dropping.

Time will tell I guess?

 

[mclaren99]

So true. Many young people will never be able to buy a house in their hometown because of the distorted markets.

So what if you get a million for your house? You still need a place to live, and maybe you want to live near your kids/grandkids. Whatever premium you make on the inflated sale price goes towards the inflated price of your new place.

So very true ! .... many homeowners get excited that their property is now worth a million or two, but if you sell the place you still need a new place to live in ! Whatever you get for your property will go towards buying a new property. Maybe if you own a house in Vancouver, sell it and move to Abbotsford or Chilliwack you’ll actually be left with a profit !

 

[appleomac]

So very true ! .... many homeowners get excited that their property is now worth a million or two, but if you sell the place you still need a new place to live in ! Whatever you get for your property will go towards buying a new property. Maybe if you own a house in Vancouver, sell it and move to Abbotsford or Chilliwack you’ll actually be left with a profit !

Your statement about profit is, in my opinion, one of the anomalies of the Vancouver housing market. People buy a property expecting/wanting to profit. Historically the home ownership model was about buying a property, hopefully the value will at least keep up with inflation, pay off the property, live it in and downsize when you're older. Now people want, dare I say, believe that they are entitled to higher than "normal" profits. Combine that with the fact that many Vancouverites have an unrealistic sense of entitlement about their supposed "right" to live in Vancouver, and you get this odd environment where people complain about high property values (even when some of those complaining have benefited from the high values), yet at the same time steadfastly refuse to live anywhere but Vancouver and complain about potentially having to downsize or move to the likes of Maple Ridge or wherever.

 

[storm rider]

So very true ! .... many homeowners get excited that their property is now worth a million or two, but if you sell the place you still need a new place to live in ! Whatever you get for your property will go towards buying a new property. Maybe if you own a house in Vancouver, sell it and move to Abbotsford or Chilliwack you’ll actually be left with a profit !

A 3 bedroom house in Kitsilano say 60 years ago for under $40,000 is now worth north of 4 million depending on the size of the lot.

If I were in that position and just about to retire I would sell the place and move to either Costa Rica or Thailand and live like a king with the money in a trust in the Cook Islands.

With regards to the money laundering,well red flags should have been raised immediately when hockey bags full of cash showed up at casinos.

SR

 

[nightswhisper]

There are two types of dirty money.

1. Blood Money - Drugs, Guns, Racketeering, War Profiteering, Smuggling, etc.

2. Gray Money - Corruption, Bribery, High-Interest Loans, etc.

This article is flawed because it doesn't actually talk about the source of the funding, but the methods by which investments are made. Money laundering are complicated and elaborate schemes, to the point that using Real Estate OR Luxury Purchases to launder money is ineffective and stupid. Same with any sort of single-exchange of money between two parties. This grossly understates how money laundering is really done.

What the RE market see is a large number of cash buyers inflating housing prices through velocity of exchange. It does not imply that actual dirty money is involved in its exchanges.

I take issue with a % figure or data on something that's intangible as money laundering simply because that number could either be significantly lower, or astronomically higher.

There are many facts that can't be quantitatively proved and this is one of them. Hell, most of the time you couldn't even pin the money to the crime if there were one.

 

[AMG-GTR]

An interesting story.

Eliminating money laundering or proceeds of crime is a great vision but reality is far different.

I can give many examples but one recent one that came up for me personally was traveling to Africa. I was there to potentially purchase a mine for the use of batteries for a contract we had with a well known electric car manufacturer.

It was my first time in this part of the world and what I witnessed shocked me. I won’t get into all the details but the amount of damage being done to the world both environmentally and from a humanitarian point of view made me sick. This is coming from someone who’s experienced in military, diamond mining, and business dealings in some pretty rough Middle Eastern countries.

Luckily the deal wasn’t a good one so I wasn’t caught in the middle of my own personal ethics vs. Fulfilling a business goal but it highlighted a point. My iPhone, my laptop, the many Tesla’s I see driving around, all use a product that, at the source, is disgusting.

We turn a blind eye to it. We think it doesn’t effect us nor that we are responsible, Especially the current generation. I applaud the genuine care for wanting to be more ethical and altruistic than the previous generations and yet, they, like me, have a hand in it.

The diamond industry is a disgusting one as well. Manipulated, controlled, and forced is the way it works and yet, I too in the past spent a huge amount of money to get a precious symbol of my undying love with an engagement ring.

Anyway. My point is that many things that we do daily has a hand, at some form or another, in actions that may be considered less than ideal.

Also where do we draw the line? Is it fair for a company to test a potentially cancer curing drug on animals or criminals? Or what if a genuinely good product to save the lives of others provides bribes to be moved to the front of the line in FDA approvals?

Isn’t that an example of where corruption is actually a good thing?

How about the pharmaceutical companies that legally overcharge customers and block competitors cheaper and more effective products?

Its easy to get on the money laundering bandwagon but how many plumbers, electricians, realtors, mortgage brokers, bankers, lawyers, administrators, clerks etc enjoyed the benefits of the increased capital.

Yes, many people benefitted and also, many people did not.

My general point is that we all benefit from it as much as it harms us and eliminating it, while possible, is much deeper than the media likes to promote.

Public outrage is always good for media though.

 

[rlock]

Yeah, Africa's pretty fucked up. It wasn't always that way, of course, but there's just something about economics that promotes dirty money and therefore empowers corrupt leaders.

It's not like the "legit" economy of the world is so legit after all. It's also not like Canada isn't wired into this, or have nefarious examples of this we can look at domestically. Our "glamour" economy is high-end casinos, luxury cars and clothes, the latest tech... and casinos of course. Add up all the social harm and everything else it causes: are we really ahead or have we fucked ourselves by trading a gain today for a bigger loss tomorrow?

Third world leaders are not much different than ours - just more desperate and dealing with the bleeding edge of how these struggles play out. They could demand the sovereign right to keep all that mineral wealth in their own country, instead of shipping it off cheaply to foreign corporations, with workers earning near-slavery wages until they die young. Of course, some leaders do demand that - but an assassination or coup or invasion awaits them, courtesy of 1st world governments that arrange that they be replaced be some strongman that is likely to line their own pockets. Bottom line is it's our own elite who give them the ultimatum "Betray your people yourself, or we'll get someone else who will." Our supposedly respectable foreign & trade & military policy is not very different than the Mexican cartels telling people to choose between "silver or lead".

Our citizens have to only scratch the surface to see how our cel-phones, t-shirts, cars, bananas (etc.) are brought to us courtesy of dead people and ruined ecosystems. But we also didn't design the system we live in, and can only react to its absurdities. What little input we actually get it is always distorted, narrowed down between competing networks of elites that use most of us as cannon fodder.

 

[JimDandy]

https://globalnews.ca/news/5278174/bc-government-public-inquiry-money-laundering-decision/

Hopefully this means that some time in the near future BC residents will not have to compete with criminals when trying to purchase the already too expensive real estate in this province.

JD

 

[appleomac]

Yeah, Africa's pretty fucked up. It wasn't always that way, of course, but there's just something about economics that promotes dirty money and therefore empowers corrupt leaders.

It's not like the "legit" economy of the world is so legit after all. It's also not like Canada isn't wired into this, or have nefarious examples of this we can look at domestically. Our "glamour" economy is high-end casinos, luxury cars and clothes, the latest tech... and casinos of course. Add up all the social harm and everything else it causes: are we really ahead or have we fucked ourselves by trading a gain today for a bigger loss tomorrow?

Third world leaders are not much different than ours - just more desperate and dealing with the bleeding edge of how these struggles play out. They could demand the sovereign right to keep all that mineral wealth in their own country, instead of shipping it off cheaply to foreign corporations, with workers earning near-slavery wages until they die young. Of course, some leaders do demand that - but an assassination or coup or invasion awaits them, courtesy of 1st world governments that arrange that they be replaced be some strongman that is likely to line their own pockets. Bottom line is it's our own elite who give them the ultimatum "Betray your people yourself, or we'll get someone else who will." Our supposedly respectable foreign & trade & military policy is not very different than the Mexican cartels telling people to choose between "silver or lead".

Our citizens have to only scratch the surface to see how our cel-phones, t-shirts, cars, bananas (etc.) are brought to us courtesy of dead people and ruined ecosystems. But we also didn't design the system we live in, and can only react to its absurdities. What little input we actually get it is always distorted, narrowed down between competing networks of elites that use most of us as cannon fodder.

People want money; whether it be a doctor, hockey player or a drug lord: we all want money. That doesn't mean money is the problem. What we want is simply what we want - how we go about getting what we want is often the problem. As an example, Canada has relatively quickly become a big diamond producer. Most people know the issues of blood diamonds in other parts of the world. Diamonds aren't the problem however; the means that some use to extract the diamonds are the problem. Focus you disdain on the appropriate things, would be my opinion. You suggest countries should keep all mineral wealth in-country. How is that even possible? That's like suggesting stopping the problem of money laundering in Vancouver real estate by forcing people to not sell their houses. No houses/real estate for sale, no money laundered through real estate. Did you really solve a problem, or just create a new problem? Stopping everyone from doing something perfectly legitimate (selling their home), in an effort to stop some people who do illegitimate things (launder money through real estate) almost always never works.

 

[BobbyMcgee]

Everyone closed their eyes. Do you think homeowners care why the house they bought 10, 15, 20 years ago care why they are now worth millions (at least on paper)? "Real estate" is one of the biggest industry sector in BC right now: do you think all the construction, development companies and their employees care why "real estate" has been booming for the past decades? Do you think all the city councils care that some "student" buys 12 condos at a time, as long as the property tax bill is paid? The "indignation" has only surfaced in the last what, 6 or 8 years - politicians talking about Vancouver housing affordability is a relatively recent phenomenon. Do criminals with money to launder benefit, sure: but so have many other non-criminals benefited greatly, if you've been a homeowner for the last 5, 10, 20 years, you've also benefited. Many who now display "indignation" over money laundering can't admit to themselves that they too have benefited.

100% and do you think even one law abiding Canadian parent cares for a single second that they can vacation in a Mexican all inclusive for peanuts thinking that it was built with honest hard earned money by some Mexican Billionaire not named Slim? 20% Mexico GDP is Cartel money and so it is here as well I guess as the true CDN laundering figure might be as high as $150B.

 

[Cock Throppled]

Nobody is ever going to stop corruption.

Human greed is too ingrained in our DNA.

What we can, and should go after, however is the blatant distortion in ethics that broke even the minimal laws we have in place.

Bags of cash in casinos, multiple property purchases by people with no visible source of income, luxury cars purchased with cash transactions, failure to pay taxes - those are the obvious, and highly visible transactions that everyone knows are suspect, but greed and ineptitude had every politician, cop, bureacrat and regulator ignore.

We should at minimum require people to prove legitimate sources of capital if challenged. Can't or won't prove your money was legitimate - you don't get that car, house, condo or diamond.

 

[licks2nite]

Corruption is the result of centralization. As the population numbers increase the corruption can only increase. See me discuss the annulment of the Eurozone, as well as the U.S. and Canadian constitutions for an antidote.

 

[nightswhisper]

Corruption is the result of centralization. As the population numbers increase the corruption can only increase. See me discuss the annulment of the Eurozone, as well as the U.S. and Canadian constitutions for an antidote.

There are plenty of centralized regimes that aren't corrupt (Japan, Rwanda and Singapore), and plenty of corrupt regimes that aren't centralized (Italy, France, Albania)

Corruption is a result of culture, social class, education, history, and type of government.

Countries like China, Russia, Iran etc. are corrupt because they eliminated their intelligentsia and moderate upper class through revolutions. The people with moral compasses are killed and now you have uneducated peasants running the country. Of course they're gonna be corrupt.

 

[licks2nite]

There are plenty of centralized regimes that aren't corrupt (Japan, Rwanda and Singapore), and plenty of corrupt regimes that aren't centralized (Italy, France, Albania)

Corruption is a result of culture, social class, education, history, and type of government.

Countries like China, Russia, Iran etc. are corrupt because they eliminated their intelligentsia and moderate upper class through revolutions. The people with moral compasses are killed and now you have uneducated peasants running the country. Of course they're gonna be corrupt.

From Google:

Findings suggest that the central authority should establish a centralization policy confined to only one sector because cross-sectoral centralization always results in higher corruption.

Moreover, looking within the United States, a positive relationship between the proportion of a state's reliance on federal transfers and corruption, as measured by the number of abuse of public office convictions of government employees.

Consistent with principal-agent theories of corruption, decentralization in expenditures may be problematic unless accompanied by decentralization in revenue generation.