Charges of money laundering involving what police are calling an underground bank in Richmond may have fallen apart, but the federal government appears to be taking another approach.
Documents filed in Federal Court show the Canada Revenue Agency is auditing five years of tax returns for the director of Silver International, an alleged money laundering hub that police say took in $80 million in cash over just a few months.
The CRA "had an interest in the seized items because it was conducting an investigation into potential criminal tax offences committed" by the director of Silver International, according to a notice of application that director filed.
And in January 2019, the CRA asked for details of her financial transactions.
David Duffs, a professor of tax law at UBC's Allard School of Law, says anyone earning money from a business – even something allegedly criminal – has to pay taxes.
"The fact that a business is illegal doesn't mean people don't have to pay tax on it," he said. "That's long established in Canadian law."
American law too – gangster Al Capone famously avoided responsibility for his crimes, but was jailed for tax evasion, he said.
"It's just as with the Al Capone story," Duff said.
Video obtained by W5 shows two people unloading a suitcase of cash in the Richmond company shortly before police executed search warrants, seizing millions.
The RCMP investigation resulted in charges of money laundering and proceeds of crime against Silver International, the director and her husband. Court documents linked that operation to bags of $20 bills that had been brought in by high rollers to B.C. casinos for years.
Those charges were dropped last year.
The director of Silver International filed an application in February to try and keep the CRA from accessing banking records.
The director's criminal lawyer declined to comment, and her tax lawyer didn't return messages from CTV News.
The tax investigation isn't the only way authorities are continuing to pursue people connected to Silver International: the province's Director of Civil Forfeiture is trying to keep the cash and other assets that were seized.
B.C.'s Attorney General, David Eby, said he wasn't aware of a CRA investigation, but welcomed it.
"It makes that the CRA is looking at B.C. generally. We have a serious issue," he said.
The CRA's record isn't perfect. After trying to prosecute the UN gang in a similar way, procedural problems led to a judge ordering the taxman to pay the gangsters $200,000.
A report by former RCMP officer Peter German is expected in the coming weeks that examines the role of horse racing, luxury vehicles, and real estate in possible money laundering in B.C.