Civil forfeiture suit alleges drug money bought houses
A Richmond man targeted in B.C.’s largest money-laundering investigation has been accused in a B.C. civil forfeiture suit of washing money in Lower Mainland real estate.
In a civil claim filed Jan. 4, Stephen Hai Peng Chen, also known as Hoy Pang Chan, is accused of using money obtained from drug trafficking to purchase and pay off properties in Vancouver and Richmond. No response has been filed by Chan, and the civil claim contains allegations not proven in court.
The civil forfeiture filing provides one of the few explicit examples of how, allegedly, drug trafficking money is being laundered in real estate. The effects of money laundering on the B.C. economy is a heated issue of public concern.
In June 2018, Attorney General David Eby released a damning independent report that found certain Lower Mainland casinos had served as laundromats for the proceeds of organized crime. Eby has ordered a followup investigation on money laundering in real estate due in March.
In the Chan case, the civil forfeiture office is suing to seize an East 5th house and West 42nd apartment in Vancouver whose combined assessed value is $2.7 million — and more than $67,000 in cash. Chan’s parents, Xiong Guang Chen and Jue Ming Chen, are also owners of the properties and named in the suit.
“As a means to launder the proceeds from his drug-trafficking activities, Mr. Chan, at times with his parents, purchased real property and registered mortgages against title to these properties,” says the claim by the B.C. civil forfeiture office.
During the RCMP’s E-Pirate investigation in 2015, Chan was identified among a number of customers of the illegal money services business Silver International in Richmond that allegedly laundered as much as $220 million a year. Court documents say a police analysis of ledgers seized at Silver International show Chan deposited $5.31 million and withdrew $2.27 million between June 1 to Oct. 1, 2015 at the illegal money services business.
An analysis of Chan’s tax returns from 2006 to 2012 determined that he had an average reported annual income of about $37,000, according to the civil forfeiture filings.
In a police raid on Oct. 15, 2015, $2 million was seized at Silver International. That same day, police seized $60,010 in bundled cash found in a black nylon bag hidden in the drum of a clothes dryer in Chan’s then-residence in Richmond on Lansdowne Road, according to court documents. Also in the nylon bag was a wallet containing about $3,300 in cash in U.S., Taiwan and Hong Kong dollars, as well as Japanese Yen, Chinese yuan and Burmese kyat.
The next day, $3,880 in cash was seized from Chan when he was arrested in his vehicle.
The court documents allege that Chan, “lacking legitimate income,” in 2015 directed an accounting firm to prepare, on his behalf, fraudulent employment letters and pay statements in order to support a mortgage financing.
In August 2015, Chan purchased a Richmond property on Katsura Street with mortgage financing and $84,000 in cash, selling the property two months later.
According to court documents, in September 2015, Chan and his parents obtained a $1.35-million bank credit line on the East 5th home, using the credit and nearly $370,000 in cash to buy the West 42nd property. The credit line draw of $381,000 was paid off in six months using cash and the proceeds of the 2016 sale of Chan’s first Richmond property, on Lansdowne.
Chan was nabbed in a separate 2015 RCMP investigation in Kelowna — dubbed E-NAOS — on allegations of drug trafficking.
Tarsem Singh Jawanda, who pleaded guilty to drug trafficking as a result of the investigation, met with Chan to pick up bags and boxes containing kilograms of the synthetic drug MDMA for sale, according to court documents. Afterwards, Jawanda would meet Chan to pay him money for the drugs received from undercover officers, say the court filings.
Chan has been charged in the E-NAOS investigation with drug trafficking and that case is still before the courts, according to the court documents.
Chan has a criminal record dating back to 1990 that includes convictions for assault with a weapon; assault causing bodily harm; possession of property obtained by crime; making, having or dealing in instruments of counterfeiting; and extortion.