Vancouver model for money laundering unprecedented in Canada, B.C. inquiry hears
27 May 2020

The so-called Vancouver model is an outlier in the history of Canadian crime, a criminologist told B.C.’s public inquiry on money laundering Tuesday.

Stephen Schneider told the Cullen Commission of Inquiry into Money Laundering that this system for laundering illegal funds from China and revenue from drug trafficking is exceptional.

“I’ve never seen such a big operation … that is so geographically confined,” said Schneider, a criminology professor at St. Mary’s University in Halifax.

“We’ve never seen anything like this in Canada, and you probably won’t see anything like this any time soon.”

As Schneider explained it, the Vancouver model involves large amounts of money taken out of China through informal value transfer systems to avoid China’s limits on money leaving the country. Once in Canada, those funds are mixed with cash from the drug trade, and then the cash is cleaned through B.C. casinos and private mortgages.

“The Vancouver model was quite unique,” Schneider said. “So many different techniques were being amalgamated.”

The Cullen Commission, led by B.C. Supreme Court Justice Austin Cullen, was announced last year in response to a series of reports that attempted to capture the alarming extent of B.C.’s problem, including estimates that more than $7 billion was laundered in the province in 2018.

The role of the commission is to determine where and how money laundering is taking place, why it’s been allowed to happen and whether it can be prevented. The commission doesn’t have the power to convict or find liability but is expected to issue recommendations in a final report.

During his second day of testimony on Tuesday, Schneider spoke at length about the Vancouver model, saying it depended on the facilitation of professional money launderers.

Those professional groups allegedly included Silver International Ltd., the Richmond company at the centre of a high-profile money laundering probe that collapsed in 2018. The company and two directors were criminally charged, but the charges were later stayed in court.

“You wouldn’t have the Vancouver model without Silver International and their directors,” Schneider said.

Pushback from casino company

During his testimony, Schneider described casinos as central to the Vancouver model of money laundering, outlining how, in many cases, illicit cash is turned into casino chips and then exchanged for a cheque.

But his testimony on the prevalence of money laundering in B.C. casinos came under fire during cross-examination by Mark Skwarok, a lawyer for the Great Canadian Gaming Corporation, which operates many major casinos including the River Rock in Richmond.

By Bethany Lindsay, CBC News, 26 May 2020

Read more at CBC News

Photo: Adam Jones [CC BY-SA 3.0], via Wikimedia Commons

RiskScreen: Eliminating Financial Crime with Smart Technology

You can claim CPD minutes for this content, by signing up to our CPD Wallet

FREE CPD Wallet