B.C. Attorney General David Eby and former RCMP investigator Peter German deliver portions of report on money laundering at the B.C. legislature. (Black Press Media)

Hot cars hide dirty money, B.C. organized crime investigation shows

Buying and selling super-cars an international money laundering tactic

B.C.’s luxury car market is being used to launder the proceeds of crime, former RCMP officer Peter German says in his report to the B.C. government on money laundering.

High-end vehicles bought with cash or bank drafts are being bought and sold by “straw buyers” or nominees and exported offshore, German’s report says. The “grey market” activity shows up in B.C. sales tax records, where tax is paid and then large numbers of tax rebates are applied for and paid.

“This report is disturbing confirmation that money laundering in B.C. is a problem that goes beyond our casinos,” said B.C. Attorney General David Eby, who released parts of the investigation dealing with vehicles and horse racing Tuesday.

“In the luxury car market, there is no financial reporting of large cash purchases, no oversight of international bank wire transfers and no apparent investigation or enforcement. It’s all a recipe for exactly what happened here – Vancouver becoming North America’s luxury car capital, generally, and perhaps North America’s used luxury car export capital too.”

The cash purchase or sale of vehicles is legal, but if the source of the money can be traced to criminal activity it is a serious offence, German said.

Regulations are being changed in B.C. to remove the onus on prosecutors to prove that the source of money is criminal, requiring only that they demonstrate the use of money was “reckless,” Eby said.

READ MORE: RCMP has ‘no’ money laundering investigators in B.C.

READ MORE: Money laundering in B.C. casinos a ‘system failure’

The sales tax records show “straw buyers” buying multiple cars and selling them through the same exporters. “It was a surprise to us” to hear that grocery bags of cash were being brought into dealerships, German said.

Former Vancouver Police deputy chief Doug LePard helped in the investigation. He described car dealership staff accepting cash from buyers, and then helping them arrange for tax rebates.

Finance ministry staff report that they have seen a “dramatic increase” in rebate applications for vehicles destined for sale abroad. Before 2014, fewer than 100 vehicles received the rebate, and by 2016 the number of rebates had jumped to 3,674 vehicles.

In 2016 alone, a single “straw buyer” bought 29 vehicles, 48 buyers made between 11 and 29 purchases and 1,000 of these buyers were linked to the same exporter. Since 2013, the province has paid $85 million in rebates for exported vehicles.

Eby said buying and selling race horses has a long history of acting as a vehicle for converting and transporting cash. Activity at Hastings Racecourse in Vancouver and Fraser Downs harness racing track in Surrey did not turn up evidence of suspicious transactions, he said.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Music and comedy event benefit Vernon woman’s cancer battle

Fundraiser for Sue Folliott Sunday, May 26 at The Kal

School district puts hold on alternative education program for Enderby, Armstrong.

Questions raised about effectiveness of in-classroom supports for struggling high-school students

Young Vernon melanoma survivor speaks out about sun danger

World Melanoma Day is recognized every May to highlight the growing prevalence of malignant melanoma.

Okanagan-Shuswap weather: rain, clouds, thunderstorms and flash floods

Environment Canada forecasts dreadful weather for Thursday

North Okanagan explores compost options

Organic waste from ICI amounts to about 60 per cent of all organics waste seen in the landfill

Hundreds of homeowners angered over proposed development on WFN land

Westbank First Nation are seeking to rezone Lot 348-3 from low density to high density area

Summerland Giant’s Head Run features Retro ’80s theme

Event will be held Saturday, June 1 at 6 p.m.

Documentary on former hockey star to air in Kelowna

The story of 5-time Stanley Cup winner Grant Fuhr comes to Kelowna June 16

Unbe-leaf-able: Agassiz man finds more than 200 four-leaf clovers in a month

Walt Hardinge has found more than 219 four-or-more leaf clovers this spring alone

Trudeau visits Kamloops

Justin Trudeau met with the Kamloops mayor and First Nations

Crews fight fire with fire to keep blaze from northern Alberta town

The wildfire now covers some 920 square kilometres

Man in B.C. charged with murder and arson in 2016 New Brunswick death

He is charged in the death of 71-year-old Lucille Maltais, who was found inside a burned down home

Kelowna fundraiser returns to support African grandmothers

The 2019 Stride to Turn the Tide walk is June 1

Kelowna thrill-seeker returns to rally racing

Mark Jennings-Bates is back behind the wheel at Rocky Mountain Rally this weekend

Most Read