Not only are thugs and criminals buying high-end cars with dirty money, but they are potentially receiving tax rebates while doing so, according to a report looking into money laundering in B.C.’s luxury car market.

Former RCMP commissioner Peter German’s review of the high-end vehicle market found a surge in the sale of such vehicles. When they are exported, the cars are eligible for a provincial sales tax rebate.

The growth in exports since 2013 is exponential. The report says a straw buyer makes a purchase on behalf of someone else, gets paid a few thousand dollars and when the car is exported, a PST rebate can be claimed.

Attorney General David Eby told reporters Tuesday that fewer than 100 vehicles a year received the refund before 2013. In 2016, that number jumped to 3,674.

"Since 2013, almost $85 million in PST refunds have been paid by government for the export of vehicles," he said. "The source and destination for the buyers and sellers and any income tax reporting by any of these individuals or entities is unknown."

And according to German, it’s likely some of that money went to line the pockets of gangsters. He also noted the ministry has hired extra staff in recent years to deal with increased demand.

Eby, in responding to the report said the finding is shocking to government and the ministry of finance is looking to see what can be done. No one can say exactly how much may have been paid out to criminals.

Officials say they spoke with some auto dealers who were concerned the sale of vehicles was connected to organized crime, but felt helpless while facing potential gangsters. In one instance, German said someone showed up with $240,000 in cash to buy a vehicle. The dealer then took several employees to the bank to deposit the money.

With no requirement for dealers to report large or suspicious transactions to the federal agency FINTRAC, there’s no paper trail. Eby said if Ottawa doesn’t act, B.C. may be able to through some sort of a registry similar to a scrap metal registry created a few years ago.

'Happier news' from horse racing sector

The report also looked into whether money laundering is an issue in the horse racing industry and found no major issues but vulnerabilities. The full report has yet to be released, including section looking into how criminals may be using the real estate industry.

This follows the release of ‘Dirty Money’ which looked at money laundering’s links to lower mainland casinos. It found an uncomfortable link and several astonishing instances of bags of cash being washed through casinos, with apparently no one noticing.

Another report looks at how to stop criminals from using the real estate market to either wash or park their money through regulatory action. It was delivered to the finance minister.

Against a backdrop of increasing calls for a public inquiry into money laundering, the government has said it will wait for the results of the two reports, before making that call. Eby said that decision is with cabinet.