Explosive allegations about tax credits for money-laundering

Money-laundering issues continue to grow. Over the past twenty years only 50 cases were heard and only 10 convictions. It is embarrassing and ridiculous.

What is disturbing is that the Attorney General now alleges criminal organizations moved to Vancouver from the United States and received tax credits from Advantage B.C. under the former B.C. Liberal government.

So what about BC Police Services reluctance to investigate because a lack of willingness to prosecute?

It’s broke… and needs fixing.

[Transcript]

A. Olsen:

Well, I’ll thank you, Mr. Speaker, and to continue the member from Abbotsford West’s line of questioning around inheritances: about three-quarters of people accused of money laundering in Canada go free. That’s three-quarters. In B.C. between 2002 and 2018, only 50 money-laundering cases were heard, and only ten people were found guilty.

Thanks to the work of our Attorney General, there is evidence that money laundering in B.C. is in the billions of dollars. Yet we’ve only been able to convict ten people of that crime in almost two decades. It’s unbelievable.

To add to this, a multi-year, billion-dollar prosecution on money laundering — a case the Attorney General has said could be the largest money-laundering case in Canadian history — fell apart in November.

My question to the Attorney General: I know he’s frustrated by the lack of prosecutions, and I share his disappointment with the collapse of the Silver International prosecution. He was calling for answers on this in November. Does he have any answers to this deeply troubling situation?

Hon. D. Eby:

This is an incredibly concerning issue for British Columbians, the fact that it appears that we can’t get convictions on money-laundering offences in the province. But not just that. It appears as though money-laundering investigations aren’t taking place to the degree that they should.

British Columbians are reading in the paper of people like Cal Krusty, who was the leader investigator or one of the lead investigators on the Silver International file saying that it’s the practice of investigators to refer material to the United States to get prosecutions because they can’t get prosecutions here. That’s a serious issue, I would say.
But even more serious than that is when you look at cases like PacNet. PacNet is a firm that was alleged to be involved in laundering the proceeds of lottery schemes in the United States, cheques from seniors written out to various scams and sent up, actually, to Vancouver, allegedly, to be processed. It’s listed as one of the top five transnational criminal organizations in the world by the Obama administration. They were actually getting tax credits from Advantage B.C.

When I look at these kinds of scenarios, I obviously feel that this is a very serious issue, but I’m not alone. I know that’s shared by many British Columbians. That’s why I asked Peter German, on behalf of the government, to look at specific case — including PacNet, including Silver International and others — to provide recommendations or to provide findings to us about exactly why it is that we can’t get these investigations done, why it seems like other jurisdictions know so much more about what’s happening in British Columbia than we do.

Mr. Speaker:

Saanich North and the Islands on a supplemental.

A. Olsen:

I wonder if there’s going to be an intense line of questioning over the next couple of weeks on that inheritance. Canada’s Financial Transactions and Reports Analysis Centre is our federal watchdog against money laundering. It’s called FINTRAC. It rarely imposes fines. Former employees have highlighted that the system is broken, even calling it scandalous — to the point that the Attorney General was calling.

B.C. police forces are hampered in dealing with money laundering because they cannot lay criminal charges without the approval of B.C. prosecutors. What this is doing is it’s leading to a general reluctance from our police forces to address more complex money-laundering issues. In fact, when I met with local police in my riding, they had similar challenges with this situation.

I know that the Attorney General has called on his federal counterpart for more resources and to improve information-sharing between our governments. In his response yesterday, he mentioned how this issue is bigger than in B.C. and that he’s working with FINTRAC. Indeed, he talked about it earlier today. I know he’s looking into whether there are provincial charges applicable for the Silver International case, but this goes beyond any one case. Clearly, major systemic reforms are needed.

My question is to the Attorney General: what is he working on with his federal counterparts to ensure that our police forces can feel free to do their work with the confidence that their cases will be prosecuted.

Hon. D. Eby:

Obviously, there are a number of issues here that overlap with federal jurisdiction. That’s why we’ve been working very closely with the federal government on this issue.

I think it’s a problem when the United States lists Canada as a problem jurisdiction for money laundering. I think that’s a problem that we need to deal with, and that is a federal government problem that we need support on. I think it’s a problem when the federal government goes to the international watchdog for anti-money-laundering agencies and reports that we have an operation in B.C. that laundered $1 billion.

When you look at these kinds of things together, we need good federal cooperation and support. I’ve really seen a shift in the federal government on this. They’re very interested in partnering with us on this.
We are going to be sharing the findings of the Finance Minister’s review, as they relate to the federal government; of Dr. German’s review, as they relate to the federal government; and we are certainly counting on action. That’s why we’re doing this work, to make sure that we get action and get prosecutions out of these matters.