National Post (National Edition)
B.C. orders new probe on money-laundering
Real estate, luxury cars and horse racing
VICTORIA • British Columbia has ordered a new review of the real estate, luxury automobile and horse racing sectors over worries they’ve been used by criminals to launder illegal money.
Attorney-General David Eby said Thursday he’s authorized an independent probe into money-laundering that builds upon a similar investigation done earlier this year into how duffel bags full of dirty cash were allowed to flow improperly through B.C.’s casinos.
The new review will focus on sectors of the economy where criminals could use funds to purchase luxury items, like homes and highend automobiles. In particular, Eby flagged the use of trust accounts by lawyers to mask the source of money used in real-estate transactions and the misuse of builders’ liens in the construction sector.
“We don’t know yet the extent of criminal activity that may be occurring in these sectors, but we have no intent of ignoring the many warning signs,” said Eby. A final report is expected by March 2019.
Representatives from the automotive, legal and real estate industries expressed support, but also some skepticism their sectors are as susceptible to dirty money as Eby may suspect.
“Quite frankly we’re all giving our heads a shake wondering what’s behind all this,” said Blair Qualey, president of the New Car Dealers Association of B.C. “All of our members, whether they are selling Fords or Maseratis are all under the scrutiny of pretty big global vehicle manufacturers who have some pretty darn high standards (and) who expect dealers to conduct themselves and follow all the rules.”
The Law Society of B.C., which regulates lawyers, said it began adopting a no-cash rule for depositing funds into lawyer’s trust accounts as far back as 2004.
“The Law Society’s compliance audit program ensures that all law firms who operate trust accounts are audited at least once within a six-year cycle, and we recently adopted a plan to reaudit law firms in high risk areas and to conduct compliance audits of law firms that practise in the areas of real estate and wills and estates every four years,” said spokesperson David Jordan.
NO INTENT OF IGNORING THE MANY WARNING SIGNS.
It’s unclear what part of horse racing is susceptible to money-laundering, and Eby did not elaborate. Great Canadian Gaming Corporation, which owns Hastings Racecourse in Vancouver, said in a statement it “welcomes the newly announced review of the horse racing industry.”
Real estate firms are required by law to report suspicious transactions and all cash transactions over $10,000, as well as have compliance measures in place, conduct a money-laundering risk assessment and keep proper records.
Canada’s financial intelligence watchdog, the Financial Transactions and Reports Analysis Centre of Canada, or Fintrac, found “significant” and “very significant” deficiencies in the anti-money-laundering controls at 88 per cent of real estate entities examined in B.C. over the last two years, according to data obtained in July by Postmedia News.