New report links proceeds of crime to casinos and real estate

Just when you thought that the storm over real estate regulation was ebbing, the Attorney General drops a 247-page report titled ‘Dirty Money’ that connects organized crime with casinos, luxury cars, and—you guessed it—real  estate.

Commissioned by BC Attorney General David Eby, and produced by former RCMP deputy commissioner Peter German, Dirty Money was released yesterday to great anticipation.

The report delves deeply into money laundering to reveal a systemic failure of government and law enforcement to stop criminal gangs from infiltrating BC’s economy. Although the focus of the report was the role of casinos as laundromats for so-called dirty money, real estate did not escape a degree of scrutiny.

As one media outlet reported:

Much of the criminal proceeds, (aka ‘dirty money’) went into the real estate sector, driving up the prices of homes and contributing to the affordability crisis, as well as the opioid overdose epidemic…German also found that some of those that arranged money laundering were buying real estate and advising others how to conduct real estate transactions.

In German’s comprehensive account, real estate is a “vulnerable sector” for “criminal actors” who operate in sales, mortgages, and insurance. Given that real estate is so central to BC’s economy, the report concludes, the casino sector pales by comparison to the enormity of the real estate sector.

The report refers to an investigation by Post Media that used Freedom of Information laws to obtain records from the BC Lottery Corporation that showed, among other things, a “high roller” who owns a $14 million house near the Point Grey Country Club, who managed to funnel $645,000 in small bills through a “drop-off outside a casino.”

 “The RCMP notes that illegal money entering the world of real estate can be hidden through numerous devices; including property, registration, management companies, mortgages, double and triple layers of ownership and beneficial ownership.”

“Most mortgage proceeds flow through the trust accounts of notaries and lawyers” making them difficult to track.

Eby has indicated the province plans to investigate the issue of criminality in the real estate sector now that the current review of money laundering in casinos has been done.

You can download the full report of Dirty Money.