Money laundering in B.C.: Public inquiry begins in Vancouver
VANCOUVER -- British Columbia's government said money laundering has distorted the economy, fuelled the opioid crisis and overheated the real estate market as a provincial inquiry into the criminal activity began Monday.
Jacqueline Hughes, a lawyer for the province, said in her opening remarks that money laundering is not a victimless crime and has significantly affected ordinary B.C. residents over the past decade.
“The Lower Mainland has, unfortunately, earned an international reputation as a haven for money laundering. This did not happen overnight or without warning signs,” she said.
“The past cannot be undone. But what government can do going forward is learn from the past and take proactive steps to make British Columbia the most difficult jurisdiction in which to launder money.”
B.C.'s NDP government called the independent inquiry last year after three reports revealed that casinos and horse racing as well as the real estate and luxury car markets had become laundromats for the proceeds of crime.
Commissioner Austin Cullen is hearing opening statements this week, with Hughes the first to speak on behalf of the province's Finance Ministry and gaming policy enforcement branch.
Hughes said the accounts of millions of dollars flowing through B.C.'s casinos in shopping bags have become well-known and the public deserves answers to its questions.
“Was there wilful blindness to what was going on in favour of income generated for public or private persons? Are there legislative barriers that prevent prosecution?” she asked.
“Most importantly, what is the true extent of money laundering in the province and what steps can we take to stop it?”
She said the government has taken steps including creating a beneficial ownership registry to prevent real estate buyers from hiding behind corporations and requiring those spending $10,000 or more at casinos to verify their source of funds.
But Hughes said there is still more work to be done and B.C. is looking forward to the inquiry's findings.
The Canadian government is also participating in the inquiry as federal organizations, including the RCMP and the Financial Transactions and Reports Analysis Centre of Canada, or Fintrac, bear significant responsibility for fighting money laundering.
B.C. Attorney General David Eby has said federal resources remain too low to address the problem and has called on Ottawa to provide more funding to both Fintrac and the RCMP.
Judith Hoffman, a lawyer for the federal government, focused her opening remarks on Canada's efforts to fight money laundering and the complex national regime that exists to oversee the issue.
While much of the attention has been focused on B.C., money laundering is a national problem, she said.
The government committed millions to tackle the issue in last year's budget and created a working group with the Federation of Law Societies of Canada to address the risks of money laundering that may arise in the practice of law, Hoffman said.
There is no doubt that criminals will continue to exploit the cracks in the federal regime, but the government is working to make it stronger, she told the inquiry.
Opening arguments are scheduled to continue through Wednesday with statements from more than a dozen participants, including the B.C. Lottery Corp., B.C. Real Estate Association and Law Society of B.C.
The inquiry will reconvene in May for a money laundering overview and to quantify the extent of the problem in B.C., before main hearings are held from September through December to dig into specific industries.
This report by The Canadian Press was first published Feb. 24, 2020.