VANCOUVER (NEWS 1130) – Criminals are using the province’s luxury car sector to launder dirty money. That’s the new finding of an independent review done by former senior Mountie Peter German.
Eby says no action being taken today. This information collected by Peter German has been forwarded to #RCMP. As for concerns about horse racing, little evidence of #moneylaundering found in that sector, but report finds it is 'vulnerable' and need support from #Ottawa to track.
— Marcella Bernardo (@Bernardo1130) May 7, 2019
“This report is disturbing confirmation that money laundering in B.C. is a problem that certainly goes beyond casinos. In the luxury car market, there’s no financial reporting of large cash purchases, no oversight of international bank wire transfers, and no apparent investigation or enforcement,” said B.C. Attorney General David Eby.
“Individuals with high-level criminal records are alleged to be principals in several used luxury car dealerships in the provinces,” Eby added, noting the report also found a “complicated” luxury vehicle export scheme involving PST refunds.
“Before 2013, fewer than 100 vehicles a year received the refund, in 2016, the PST was rebated on 3,674 vehicles. Since 2013, almost $85 million dollars in PST refunds have been paid by government for the export of vehicles,” Eby added.
The source and destination of funds for the buyers and sellers are unknown, said Eby.
Eby says year by year chart shows massive growth of #PST rebates dating back to 2013. As for whether any of this disturbing information was flagged by finance ministry staff, German says staff 'not terribly pleased they had to help straw buyers work through refunds.' #bcpoli
— Marcella Bernardo (@Bernardo1130) May 7, 2019
“Our ports most be crowded with containers containing luxury vehicles,” he said, noting the report found ports do not have a dedicated police presence.
Eby says he believes most luxury car sellers support stronger regulations, noting changes are in the workd to better track any cash transactions higher than $10,000.
“This report is disturbing confirmation that money laundering in B.C. is a problem that certainly goes beyond our casinos.”
The province has forwarded allegations made in the report to police, and the finance ministry is reviewing them.
“A number of changes are in the works that should, I hope, make prosecutions more possible and investigations more fruitful.”
The report also looked at horse racing but found no significant evidence of money laundering. However, Greman’s report did note that the sector remains vulnerable.
Last June, German estimated money laundering in B.C. amounted to more than $100 million in his government-commissioned Dirty Money report into activities at provincial casinos.
‘Organized criminals don’t drive smart cars’
German says it’s no secret why ‘flashy’ cars appeal to gangsters.
“Organized criminals don’t drive smart cars. There’s an interest in luxury items. It’s boats, it’s jewellery and so forth,” he added. “The other side of it, however, is luxury vehicles today are worth so much money, so there are a lot of different opportunities for money laundering.”
German compared this to a game of whack-a-mole at an amusement park because criminals have been quick to move on to other ‘grey’ markets since the government cracked down on casinos last year.
He said ‘straw’ buyers, often claiming to be students, show up with shopping bags full of dirty cash to purchase a car destined for China where it can be re-sold for more money.
“There’s nothing suspicious because there’s no reporting involved and there’s no visibility on that point of sale.”
He added finance ministry staff helped flag some of the suspicious tax refunds linked to luxury car sales.
“We then spoke with the sales tax people with the province and they were very forthcoming. They themselves were very concerned by what they had been dealing with over the years,” German added. “I got the impression the staff weren’t terribly pleased that they had to help these straw buyers work through their refund situation.”
Since German initially uncovered evidence of money laundering at BC casinos last year, demand has grown for a public inquiry.
Eby says no decision has been made yet on whether that’s necessary.
New Car Dealers Association of BC
Meanwhile, the New Car Dealers Association of BC issued a statement following German’s report applauding German on his latest report.
“We agree that this review is important for British Columbians, and should there be regulatory changes to any reporting requirements with respect to new car sales, we certainly will comply as our members always do,” read the statement. “Our members also fully report on qualifying transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), an independent government agency that works to detect, prevent and deter money laundering.”
The association represents almost 400 new car and truck dealers throughout the province.