British Columbia launches inquiry as over Can$7 billion reportedly laundered through real estate in 2018

By Keith Nuthall, in Ottawa

The Canadian province of British Columbia (BC) has announced a public inquiry [1] into how money laundering has distorted its economy after three independent reports noted how criminal funds have flooded into this Pacific coast region.BC Supreme Court Judge Austin Cullen has been appointed to head the inquiry, which BC attorney general David Eby said would have the power to force cooperation by “people and organisations who refuse to share what they know unless legally compelled to do so”. An interim report will be released within 18 months and a final report by May 2021. There will be many leads to follow. The BC government acted following former Royal Canadian Mounted Police officer Peter German’s 2018 report, ‘Dirty Money’, which alleged that casinos in Vancouver and its surrounding districts were compromised by money laundering and criminal activity. He followed up that paper with new reports released 9 May [2019] on how BC’s luxury car, real estate sectors and horse racing have been similarly subverted.German found that launderers brought bags of money into BC or used small international wire transfers to buy vehicles from dealers, some of which were led by individuals with serious criminal records. On horse racing, while the risk of ML was comparatively low, he suggested charging a proposed independent regulator for gaming in BC to probe and deal with the threat in this sector.A separate report – also released this month by a British Columbia Expert Panel on Money Laundering in Real Estate - estimated more than Can$7 billion (US$5.2 billion) was laundered through BC property in 2018, driving up house prices by around five per cent. German found thousands of properties in BC at “high risk” of use in money laundering, tax evasion or both, with nominee straw buyers “commonplace”. He said 88 houses worth more than Can$10 million (US$7.2 million) are apparently owned by nominees who declare themselves to be students, homemakers or unemployed. German also complained that there was no agency or police force in BC (whether federal or provincial) with adequate oversight or resources to investigate this ML.Announcing the inquiry, the BC government claimed it had acted promptly on the 2018 report, introducing legislation to establish Canada’s first provincial public registry of beneficial owners, for instance, to highlight who owns local properties.Notehttps://news.gov.bc.ca/releases/2019PREM0052-000958; https://news.gov.bc.ca/releases/2019AG0042-000885; and https://news.gov.bc.ca/releases/2019FIN0051-000914