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

Christmas morning burglar sentenced in Nanaimo

Justin Redmond Feusse, 20, sentenced to 240 days in jail for Christmas day break-and-enter

Woman rescued from Nanaimo’s East Wellington bluffs

Evening hike turns into overnight ordeal for Nanaimo woman who lost her way as darkness fell

Chesapeake Shores filming in downtown Nanaimo

Cast and crew close to wrapping up shooting on Season 4 of Hallmark Channel TV series

Bastion Street bridge closed for construction work

Span connecting downtown to Old City Quarter closed to vehicle traffic for six weeks

Governor General’s Award-winning author launches her new book

Wendy Phillips’s ‘Baggage’ is told in experimental ‘free verse’ style

Bastion Street bridge closed for construction work

Span connecting downtown to Old City Quarter closed to vehicle traffic for six weeks

Body of missing snowmobiler recovered from Great Slave Lake

Police confirm the body is that of one of three missing snowmobilers

So, do you know ‘Dave from Vancouver Island’?

Ontario man searching for fellow he travelled with in Europe 50 years ago

Toddler seriously injured after falling from Okanagan balcony

RCMP are investigating after a two-year-old boy fell from the balcony of an apartment in Kelowna

Cost jumps 35% for Trans-Canada Highway widening in B.C.

Revelstoke-area stretch first awarded under new union deal

Is vegan food a human right? Ontario firefighter battling B.C. blaze argues it is

Adam Knauff says he had to go hungry some days because there was no vegan food

Winds helping in battle against fire threatening northern Alberta town

Nearly 5,000 people have cleared out of High Level and nearby First Nation

B.C. sends 267 firefighters to help battle Alberta wildfires

Out of control fires have forced evacuations in the province

Most Read