The British Columbia government commissioned independent investigator Peter German to produce a report on the role of laundered criminal money in the province's white-hot real-estate bubble, centred on the city of Vancouver; German's report found that last year alone, CAD7b was laundered through BC, with much of that money going into property (as well as luxury cars and casino gambling).
The report found that $5b of that money went into real-estate transactions, accounting for 4.6% of the value of all real-estate sales in the Province last year, driving prices up by 3.5%-4.7% (and this increase will have drawn more speculators into the market, further driving up prices).
From casinos who accepted hockey bags full of cash (most Canadian shady deal ever) to one in five BC properties being bought for cash, often through legal entities designed to shield their beneficial owners' identities, BC has become a global hub for criminal money laundering, with real-estate serving as the "oil" of the BC economy.
German pointed out that he was able to get these figures with a small team of ten researchers in less than a year from public sources alone, suggesting that if the Province hadn't been aware that this was going on, it was because they chose not to be.
BC Attorney General David Eby identified the origin of the billions: "foreign organized crime, including a Mexican cartel, Iranian and Mainland Chinese organized crime."
* One out of five B.C. properties are bought in cash; over the past two decades, C$212 billion in property has been bought in cash.
* The true owners can’t be identified for the vast majority of C$28 billion in B.C. residential property held by legal entities.
* More than 25 properties worth C$34 million have owners listing addresses in countries subject to trade sanctions.
The anecdotal examples are just as staggering:
* a C$3.5 million Gulf Island estate acquired with funds allegedly embezzled from a $90 million loan fraud in India
* a luxury car reseller “known to police” who owns three Vancouver homes worth C$8.6 million with multiple layers of mortgages with inexplicably declining interest rates
* Hundreds of properties where mortgages were registered and repaid in rapid succession — in one case a single property had 29 mortgages — which the report called a “red flag for money laundering”
Billions in dirty cash helped fuel Vancouver, B.C.’s housing boom [Natalie Obiko Pearson/Seattle Times]
(via Naked Capitalism)
(Image: http://taxrebate.org.uk/, CC-BY)
