Alleged gang head laundered cash in Canada: court documents

VANCOUVER -- An accused triad leader from Macau laundered millions of dollars of dirty money in Canada as immigration officials waited over a decade for access to police wiretap information that allowed them to move to have him deported, court documents show.

Lai Tong Sang, the alleged "dragon head" of the Shui Fung gang who fled a bloody turf war by coming to Canada, was the subject of an investigation by the Integrated Proceeds of Crime Unit, according to documents filed with the Federal Court of Canada in Vancouver.

"I was informed that although the subject's financial record and transactions indicate trends of money laundering activity, they did not have sufficient evidence to meet the criminal standard of proof beyond a reasonable doubt," says the December 2011 report by Canada Border Services Agency.

However the standard of proof in an immigration matter is less than in a criminal court, it notes, and immigration officials point to a report from FINTRAC -- Canada's financial intelligence agency -- to contend there are reasonable grounds to believe Lai "was or is" involved in money laundering activities. From Oct. 15, 2002 to Nov. 8, 2006, investigators tracked 49 separate electronic funds transfers.

The transactions amounted to $2.1 million and US$140,000, the report stated.

Lai and his wife, accompanied by their three minor children, arrived at Vancouver airport on Oct. 28, 1996, under a permanent resident visa.

His immigration made headlines, as he was well known in Macau media as the head of the Shui Fung, or Water Room, gang.

But it wasn't until July 2011 that immigration officials completed reports alleging Lai was not admissible to Canada due to his ties to a criminal organization.

In November 2011, Lai filed an application with the Federal Court for a judicial review of the agency's decision to try and have him removed from Canada.

The then-14 year delay was "unreasonable and prejudicial to Mr. Lai and his family," argued his lawyer, Peter Chapman.

"Previous investigations were done and the government apparently decided not to take proceedings to cancel Mr. Lai's permanent resident status," Chapman submitted to the court.

But that was not the case, say documents filed with the court.

"It should be noted that it is extremely difficult to investigate or prosecute members of organized crime, given that they are often sophisticated, very mobile, have access to vast resources and use violence or threats to intimidate witnesses," says a report by Citizenship and Immigration filed in court.

Evidence from wiretaps and police investigations was not able to be released at the time that Lai arrived in Canada and was the target of an assassination attempt by gang rivals, says the report.

During three days of hearings before the Immigration and Refugee Board last week, police witnesses described the intertwined criminal investigations that touched Lai's case.

The assassination plot was linked to Simon Kwok Chow, the purported leader of the rival 14K triad in Vancouver. Chow was convicted of the first-degree murder in February 2001 in an unrelated case and sentenced to life in prison.

Chapman argued there is no allegation that Shui Fung was engaged in activities that constituted indictable offences in Canada. Not so, said immigration officials.

"Information within the disclosure packages indicates that the Shui Fong were involved in various criminal activities, but not limited to, murder, assault, extortion, gang fighting, illegal gambling, and living off the avails of prostitution," says the report.

Lai's membership in the Shui Fung is lifelong, says the report, "even if he is not active in criminality in Canada."

Lai first applied for permanent residence in February 1994, an application that was referred for enhanced criminal checks because of his membership in a triad organization, say the court documents.

With that process stalled, Lai sent a letter March 15, 1996, withdrawing the application in Macau. He had filed an application in Los Angeles two weeks earlier, on March 1.

Lai did not attend his IRB admissibility hearing in person, but called in from Macau. His wife and children do live in Metro Vancouver, and immigration officials are seeking to have them removed on the grounds that material facts were misrepresented in their visa applications.

A decision is not expected in his case for several months.