Has Canada Contributed To The Transnational Crime Wave By Allowing The Vancouver Model?
New money laundering schemes are constantly being uncovered, usually due to the brazen actions of money launderers. The Vancouver Model is the latest using real estate as a primary means of laundering money.
Money launderers seized onto China’s currency control & Canada’s lax money laundering regulatory approach that result in something called: The Vancouver Model of Money Laundering.
The Vancouver Model
A recent Inquiry by a Canadian Commission into money laundering in British Columbia (B.C.) revealed several details of a multi-billion dollar scheme, where so-called “students” bought multi-million-dollar mansions.
It was identified that for over ten years, money launderers operated a money laundering method called “The Vancouver Model.”
This model of money laundering, which was recently featured in an article by sanctions.io, a leading provider of sanctions & PEP screening for AML & Trade Compliance, detailed how it typically involved individuals or groups purchasing real estate in the B.C. region, used large amounts of cash, often sourced from illegal activities – including both BEC ScamsScams A Scam is a confidence trick - a crime - is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost. and Chinese Pig ButcheringPig Butchering Sha Zhu Pan 殺主盤 “Pig Butchering” This is a scam type that originated in China involving the scammer developing a relationship with the victim - sometimes romantic sometimes not - and leading the victim to invest in a fake company or asset. These typically target smart younger women. Scams.
These properties were then sold or rented out, generating seemingly legitimate income, which was then used to further launder the illicitillicit Illicit means something that is not legally permitted or authorized under the law; unlicensed; unlawful. It can also mean disapproved of or not permitted for moral or ethical reasons. funds and either funnel them back to China or elsewhere as legitimate money or is used to fund further expansion of these transnational criminalCriminal A criminal is any person who through a decision or act engages in a crime. This can be complicated, as many people break laws unknowingly, however, in our context, it is a person who makes a decision to engage in unlawful acts or to place themselves with others who do this. A criminal always has the ability to decide not to break the law, or if they initially engage in crime to stop doing it, but instead continues. enterprises.
The Vancouver Model is characterized by its use of “professional facilitators” such as real estate agents, lawyers, & accountants who may knowingly or unknowingly assist in the process. Given the fees they earn, we much question their total innocence.
Additionally, it is said to rely on the availability of Vancouver’s hot real estate market, which provides ample opportunities for investment and profit. Something similar may be happening in Miami, Houston, Silicon Valley, and Southern California too.
The Vancouver Model has been the subject of increased scrutiny and criticism in recent years, with many calling for tighter regulations & increased enforcement to combat ML in the region.
The article written by sanctions.io details that due to strict Chinese currency controls, Chinese gamblers enter into arrangements with criminal syndicates & loan sharks with links to B.C. The gamblers would transfer money to criminal-controlled bank accounts in China before traveling to Vancouver, where loan sharks and other criminal associates provide them with their money in local currency. This cash money provided was likely the profits of criminal activities, such as drug trafficking, scamming cartels, and even human trafficking.
With gambling, win or lose, the money is laundered as soon as it is converted to casino chips. This is believed to also have fueled some of Las Vegas’ growth in recent years (before the pandemic.)
As said, the proceeds from the Vancouver Model were reinvested back into criminal activities, notably fentanyl sales or scams targeting Chinese that relocated to the Americas, by criminal gangsGangs A gang is normally a group or society of associated criminals with a defined leadership and internal organization that identifies with or claims control over a territory or business practice in a community and engages, either individually or collectively, in illegal, and possibly violent, behavior. Online gangs are not limited by territory and may operate side by side with other gangs while engaging in crime online. Some members of criminal gangs are initiated (by going through a process of initiation), or have to prove their loyalty and right to belong by committing certain acts, usually theft or violence, or rituals. Gangs are usually rougher and more visible than scammer cartels, and more often arrested. or invested in real estate by Chinese citizens themselves in order to avoid paying taxes or drawing the attention of regulators.
What Is The Vancouver Model of Money Laundering?
According to sanctions.io
New money laundering schemes are constantly being uncovered, usually due to the brazen actions of money launderers. A recent report into money laundering in Canada’s western province of British Columbia revealed several details of a multi-billion dollar scheme, where so-called students bought multi-million-dollar mansions and a single working-class family brought more than 100 million Canadian dollars to the country. Money launderers entered casinos with garbage bags full of illicit money in an attempt to clean their illicit funds.
These events have opened up fresh inquiries into Canada’s lax regulatory approach to financial crime as provincial governments step up their efforts to identify and prevent the Vancouver Model of money laundering from thriving in their territories.
Witnesses cited in the report described rich gamblers flying from China with huge bags of cash used to play baccarat at private salons in Vancouver casinos. Once Canada increased betting limits to 100,000 Canadian dollars per hand, money laundering activities escalated even further.
While the Vancouver Model isn’t limited to the Canadian city, it was popularised there by Chinese citizens who took advantage of high gambling limits and criminal gangs who took advantage of lax regulatory controls to launder the illicit proceeds of their crimes.
How the Vancouver Model Works
Chinese currency controls prevent citizens from taking more than $50,000 out of the country at a time. To circumvent these rules, Chinese gamblers enter into arrangements with criminal syndicates and loan sharks with links in Canada and elsewhere. They transfer money to criminal-controlled bank accounts in China before traveling to Canada, where loan sharks and other criminal associates provide them with their money in Canadian dollars. (This money, it should be said, is likely the profits of their own criminal activities, such as drug trafficking, scams, human trafficking, and more.)
Once they receive their funds, the Chinese citizens visit various casinos and exchange their money for chips. They make a series of bets and then exchange their chips for Canadian dollars. Through gambling, the money has been “cleaned”, and its illegitimate origins are concealed from authorities.
Whether the gamblers win or lose is irrelevant since the money is laundered as soon as it is converted to casino chips. The financial proceeds from the Vancouver Model are usually reinvested back into criminal activities (notably fentanyl sales) by criminal gangs or invested into real estate by Chinese citizens themselves in order to avoid paying taxes or drawing the attention of regulators.
Money laundering is not a victimless crime!
Money laundering fuels these criminal organizations & according to the B.C. Coroner Service, over 2,200 people died from illicit overdose deaths in 2021, plus it fuels the multi-trillion dollar cybercrimeCybercrime Cybercrime is a crime related to technology, computers, and the Internet. Typical cybercrime are performed by a computer against a computer, or by a hacker using software to attack computers or networks. industry. Ending most money laundering is now a top priority for most legitimate nations of the world.
Every jurisdiction and financial institution should take the opportunity to learn from the Vancouver Model and be able to identify warning signs that money laundering may be going on. The best way to combat money laundering is through automated AML solutions that can screen and monitor the thousands of transactions that occur through their institutions every single day. While the Vancouver Model was particularly difficult to detect, there were early warning signs that were ignored.
One of the side effects of the influx of this corrupt money into Canada, the United States, Australia, and elsewhere is the escalation of housing prices. This is driven normal family homes almost out of reach. Consequently, when governments finally do crack down on the properties bought under these schemes, it will collapse housing prices and negatively affect everyone’s home values.
Learn More
- Cullen Commission Issues Final Money Laundering Report in British Columbia https://guidehouse.com/insights/financial-crimes/2022/money-laundering-report-british-columbia
- The Vancouver Model: Canadian Casinos And Money Laundering https://financialcrimeacademy.org/the-vancouver-model-canadian-casinos-and-money-laundering/
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This program is designed to help scamScam A Scam is a confidence trick - a crime - is an attempt to defraud a person or group after first gaining their trust through deception. Scams or confidence tricks exploit victims using their credulity, naïveté, compassion, vanity, irresponsibility, or greed and exploiting that. Researchers have defined confidence tricks as "a distinctive species of fraudulent conduct ... intending to further voluntary exchanges that are not mutually beneficial", as they "benefit con operators ('con men' - criminals) at the expense of their victims (the 'marks')". A scam is a crime even if no money was lost. victims struggling to recover on their own and for those who want to understand the overall process. You can be using other resources, such as traumaTrauma Emotional and psychological trauma is the result of extraordinarily stressful events that shatter your sense of security, making you feel helpless in a dangerous world. Psychological trauma can leave you struggling with upsetting emotions, memories, and anxiety that won’t go away. It can also leave you feeling numb, disconnected, and unable to trust other people. Traumatic experiences often involve a threat to life or safety or other emotional shocks, but any situation that leaves you feeling overwhelmed and isolated can result in trauma, even if it doesn’t involve physical harm. It’s not the objective circumstances that determine whether an event is traumatic, but your subjective emotional experience of the event. The more frightened and helpless you feel, the more likely you are to be traumatized. Trauma requires treatment, either through counseling or therapy or through trauma-oriented support programs, such as those offered by SCARS. counseling or therapy, qualified support groups, or completely independent – on your own!
The SCARS Steps program is a complete program and is provided for the purpose of helping scam victims to overcome this experience. Throughout this SCARS Steps Program, we speak about issues and challenges that a victim may have and help guide them through their recovery. But each person is different and it is important to understand your own reasons for being vulnerable to being scammed.
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The SCARS Slate Book should be purchased by family and friends to better understand what happened to the victim and the traumatic impact on them. But it can also be shared by the victim so that they do not have to explain to family and friends about the scam. This publication is to help others to help Scam Victims to make it through this traumatic experience and recover.
Each person is different and it is important to understand how relationship scamsRelationship Scam A Relationship Scam is a one-to-one criminal act that involves a trust relationship and uses deception & manipulation to get a victim to give to the criminal something of value, such as money! Click here to learn more: What Is A Relationship Scam? work and why people are vulnerable; to being scammed, how they were lured in, then groomed and manipulated. This understanding is essential in helping them through the process of ending the scam and then on to recovery. The SCARS Slate Book will provide the information necessary to help support a victim through this process.
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As we have seen, money recovery/repayment programs can become available years after the scam ends and you need to keep all the details of this crime in case it is needed. We have also seen scammers being extradited to the U.S. and other countries, this will help in the event you testify or give statements, Additionally, this helps you have your information ready to qualify for victims’ benefits, compensation, or aid.
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