Industry Reports

Dr. Peter German Second Report Reveals B.C. Laundered CA$7B over Past 12 Months

Money laundering allegations and discoveries in British Columbia appear to be emerging on a regular basis and every piece of information is even more baffling than the previous. Another part of former Mountie Peter German’s second report was recently issued, highlighting that over CA$7 billion might have been laundered over the span of the past 12 months only. This has increased the housing market prices and decreased the levels of trust in British Columbia’s government.

The gambling field was where money laundering was first indicated in the first report issued by former Mountie Peter German last summer. In the Dirty Money report, he pointed out that the field provided the perfect conditions for the washing of copious amounts of cash, often the proceeds of criminal activity abroad. Chinese high rollers were frequenting the casino locations in Lower Mainland joined by the so-called loan sharks with duffel bags filled with CA$20 bills. Flaws in the regulation enabled this practice to take place for years.

Washing Crime Proceeds via B.C. Economy

The report submitted at the beginning of April to the British Columbia government used only publicly accessible information and still managed to reveal the shocking scale of money laundering actions across the province. But the local gambling field is not the sole area where criminals have laundered, as the housing market also provided favorable conditions for this.

According to the information featured in this second report, Vancouver’s housing market saw skyrocketing prices because of the cash washing that took place within it. B.C. Finance Minister Carole James recently pointed out that locals are the ones paying the price for previous injustice. Law professor Maureen Maloney, the chair of B.C.’s expert panel on money laundering in real estate, also issued a report on the subject, focusing on the housing market.

As it became clear, Ontario, Alberta, and the Prairies might have an even bigger issue when it comes to washing the proceeds of criminal activities. Focusing on British Columbia solely, estimations show that the real-estate field might have seen some CA$5 billion laundered over 2018 solely. However, it is a criminal practice we are talking about and the real scope of the issue could be hard to pinpoint.

CA$40 Million Laundered across Canada

If we have to take into account the bigger picture, estimations done by the report of Prof. Maloney show that more than CA$40 billion were laundered in Canada over the last 12 months. In the meantime, Dr. German points out in his report that the housing market is also particularly vulnerable, as it does not have the source of cash requirement that is now mandatory in the gambling field.

FinTRAC should be notified about larger cash transactions surpassing the CA$10,000. However, in his second report, Dr. German confirms that existing regulations make it impossible for law enforcement officials to gain access to the database amassed by FinTRAC, essentially preventing the efficient flow of intelligence. The Financial Transactions and Reports Analysis Centre of Canada considers the federal privacy law effective.

One of the first steps in the right direction was the introduction of the Land Owner Transparency Act that would make ownership clear. In response to recently renewed calls for a public inquiry, Attorney-General David Eby said that he is considering the move. Port Coquitlam Mayor Brad West was quick to react to the information that some CA$7 million have been laundered in British Columbia over the past 12 months solely.