Real estate, horse racing, luxury cars: Fight against money laundering in B.C. expands

VICTORIA (NEWS 1130) – First casinos, now real estate, horse racing and luxury cars.

The fight against money laundering in B.C. has expanded to include two more reviews ordered by the provincial government.

Next steps include a panel examining vulnerabilities across the economy.

Finance Minister Carole James says the focus is to find gaps and close them, as well as identifying market manipulation and abuse.

“Regardless of the amount of money, I think it’s important for us as government to say we aren’t going to accept that illegal activity,” she says. “The issue of regulations, the issue of structure in real estate. Also, financial institutions — B.C. securities commission.”

Attorney General David Eby adds former RCMP deputy commissioner Peter German is in charge of the fact-finding review of real estate, horse racing and luxury cars.

“There was a significant correlation between when people filled out the anti-money laundering forms who are bringing in the cash. They listed their occupations as being involved in the real estate sector. That red flag suggests to us that we should follow up,” Eby says.

“Certainly if any evidence is uncovered during the course of any of these reviews that suggests that there is an issue of criminal activity or ongoing criminal activity, it will be referred to police.”

German’s first report –which was released in June– linked crime groups, primarily from Asia, to cash laundered by casinos in the Vancouver area.

Eby ordered German’s first review last year, shortly after learning someone at Richmond’s River Rock casino accepted $13.5 million worth of 20-dollar bills from a single gambler during July of 2015.

“We have a list of individuals –who are walking bulk cash into casinos in the hundreds of thousands of dollars– filling out forms that listed their occupations as being involved in the real estate market. We can’t ignore that red flag.”

James says the banking industry is also going under the microscope because she wants the expert panel to find out what’s working elsewhere.

“Money launderers don’t know borders and so, if we can learn from experts who have looked at money laundering in other jurisdictions and doors that they closed, so that didn’t happen, the more –the better.”

Both reviews must be completed by the end of March.

Industry stakeholders react

When it comes to real estate, the president of the Real Estate Board of Greater Vancouver, says he’ll be surprised if any agents in his organization are linked to money laundering.

“Realtors are law-abiding citizens and we want to do our part to help the police to prevent this from happening,” President Phil Moore tells NEWS 1130. “We’ve heard it now for a couple of years. We haven’t seen any direct evidence with regards to prosecuting realtors or realtors’ offices, but we’d like to get through this and we’d like to do our part.”

Moore welcomes the reviews, saying he believes they will vindicate realtors that do follow the rules.

“It’s been a cloud over our industry for a number of years and it certainly would be exciting to get to the bottom of it,” he says. “If there’s evidence of money-laundering in our community, which includes the real estate market, we think that those should be identified and those involved should be prosecuted.”

Meantime, the New Car Dealers Association of B.C. also suspects the only sales vulnerable to untraceable cash transactions are likely independent listings.

“It could be that independent car dealers and others doing private sales might fall into some of those traps that are out there for taking cash, but I don’t think our folks would want to be anywhere near that kind of thing,” that organization’s president, Blair Qualey, says.

Qualey also says it’s extremely difficult for members of his organization to break the rules without getting caught, but that may not be the case when it comes to owner-based or independent sales.

The Great Canadian Gaming Corporation says in a statement it welcomes the review of the horse racing industry, and that it will support German’s efforts “as was the case during the review of lower mainland casino operations.”

“As the regulator for horse racing in the province, we would encourage you to contact the Ministry of the Attorney General or the Gaming Policy Enforcement Branch for further clarity on the issue and next steps with this review,” Terrance Doyle, the chief operating officer of the corporation adds.