Unexplained wealth order violates rights, man says
A B.C. man says his constitutional rights will be violated by the province's use of a new law to demand he detail the source of $1 million to buy a house on Salt Spring Island.
Skye Lee was named by the province in the first so-called unexplained wealth order action filed in B.C. Supreme Court last year as part of a case to have the home forfeited as proceeds of crime. The province's claim says Lee, also known as Geordie Lee, was the spouse of Alicia Valerie Davenport, who bought the house at 435 Stewart Rd. outright without a mortgage in 2017. Neither Lee nor Davenport had the lawful income to buy or maintain the property, according to the forfeiture lawsuit.
The province alleges the money came from a $200-million international pump-and-dump stock fraud and was moved through shell companies and laundered with the purchase of the house.
The B.C. NDP government introduced new measures last year to combat money laundering that include the unexplained wealth orders. If successful in court, the orders put a reverse onus on the alleged perpetrator to explain where money came from to buy their assets in cases where there is a suspicion of criminal activity or corruption.
In a response filed in court on Feb. 29, Lee denies all wrongdoing and says he is not the spouse of Davenport, has no proprietary interest in the house, and the property is not the proceeds of unlawful activity. He says he has no knowledge of nor participated in stock fraud.
Any relief sought or obtained by the province by the unexplained wealth order is unconstitutional and violates Lee's rights under Canada's Charter of Rights and Freedoms, says the response, filed by Patrick Sullivan, a lawyer with Whitelaw Twining and an expert in securities law.
Lee seeks to have the case dismissed and to be awarded special costs against the province.
In its case, the province says the $1 million came from four wire transfers totalling $1.15 million for a “purported loan” that was the proceeds of the pump-and-dump scheme. Several players and companies in that scheme have been prosecuted by the U.S. Securities and Exchange Commission.