Money laundering has been a huge problem in British Columbia for years. It is mainly prominent in casinos and real estate, where it is estimated that in one year around $2 billion of money is laundered. The problem has been recognized and is now being addressed by the government.
In 2017, the BC government implemented a new rule that casinos had to complete disclosures on the source of cash deposits larger than $10,000. Meaning that anyone who shows up to a casino with that much money has to prove how they got it. Prime Minister Justin Trudeau has also agreed to pledge $70 million over a span of five years to help strengthen policing that can address money laundering.
So how is the money being laundered through the casinos? Criminal groups lend out small amounts of money to people, then the cash is turned into casino chips, which are then cashed out in the form of legal checks and a receipt showing that they “won” the amount. This obscures the origins of dirty money, “washing” it into apparently clean money.
Money laundering has also been a problem in real estate. In April 2019, a Postmedia report based on an analysis of court records and property documents revealed that some 20 of the lower mainland homes valued at more than $43 million were linked to possible money laundering issues. Many of the people named in documents quickly protected their assets making it hard to seize the properties in question. It’s estimated that money laundering in BC’s real estate increased housing prices by about five percent.
In real estate, money launderers will buy a property, using a credible family member as the legal owner, to whom they’ll provide all of the funds, in cash. Another way is to underestimate the value of a property and transact the difference off of the record. If this happens, the money launderer may quickly sell the property at a higher price. Complicit partners who are in on it to confuse people even further.
The government says that they’re trying their best to stop the problem but there is only so much they can do. Their ability to prevent it is limited because it is very hard to even spot these cases. Even when the government does catch wind of money laundering, the launders have already sealed the gaps so they can’t seize the money or property. Plus the criminals use cash instead of credit cards.
Regardless of their limits, the government is still looking for a way to combat this ongoing issue.
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