Dark Money and White Crimes; the Power of Chinese Organized Crime in Canada

(Image displays arrest of supposed Triad “godmother” in Chongqing; obtained from Daily Mail, UK)

 

A body lies draped across the sidewalk, cloaked in the garb of a worker who once plied the rails of the Canadian National rail yard. The sweating and grunting from the exertion of pushing and pulling and servicing and regulating the merchandize and industrial mechanisms, actions that should long ago have been relegated to the expensive equipment purchased for this purpose, have left its mark on the small man. Whether his small, hunched frame stood as bent as the squat prostrate figure suggests is hard to discern. The legs and hips lie in the street, angled obtusely over the gritty gutter where the pre-Summer rains collected the dust and grime of the road towards a small gas station, once identified by the derelict, discarded and previously illuminated sign stating “gas bar” in large, cursive writing. Apparently the picture this name conjured, inflicting images of inebriated truckers in the midst of their long drives, simply did not have the staying power, implications or authority that the label of “station” now seemingly enjoys. The body’s head rests on the grass boulevard, cut sparingly by the City with periodic intensity; the torso reaches back into the roadway. While the face is covered by its matted black hair, ear length and flipped almost stylishly across its frontal features, it is still possible to identify the man as of Chinese heritage; blood crusts around the edge of the lips – an indication of the sanguinary output that poured forth through the once perhaps loquacious cavity.

The street lies deserted in the creeping crepuscular glow of the banished twilight, fleeing its fortifications before the ever marching dawn. This area in north Scarborough – the oft-slighted outer eastern borough of the burgeoning city of Toronto – is generally perceived as bleak even before anyone ever ventures to visit. It has always existed as a land of space; room for houses with wide lawns and lots with backyards that are sprawling by any middleclass standard. Mixed among these neighbourhoods, filling the interstices between habitation, lie the industrial parks and warehouses – spaces of industry and employment deemed too large or dirty to compete with the towers of business and the shoddily built yet glamorously occupied condominiums that litter Toronto’s downtown core and lakefront. These belts of industry ring the City in concentric half-circles, growing in frequency and size the further they extend from its beating gleaming centre adjacent Lake Ontario. While the inhabitants of Scarborough’s neighbourhoods have changed over the years, the wide streets, strip plazas and flat horizon exist as reminders of the static nature of this environment. Things here are not supposed to climb high, they are not supposed to grace the pinnacles of the centre, unless as the late night delivery staff driving into the core, who must ferry the supplies so the accounting and tallying of wealth can continue unabated, blissfully separate and divisible from the industry, agriculture and storage that facilitate it.

Within this seemingly monotonous world, peripheral to all but those who inhabit it, changes in the underworld are brewing. The discarded man lying half in the street seems to almost shout this conclusion – a metaphor for the growing undulations in the criminal sphere of Canada’s largest metropolis. He is one of the many victims of violence, greed and chance that are now littering the streets and domiciles of not only the suburbs of Toronto, but country of Canada and North America as a whole. In this investigation by PanAmerican Crime, Chinese criminal traditions and the organized syndicates these spawn will be examined and dissected; it will reveal the convoluted relationships these groups form, not within their notoriously powerful and shadowy realm – a discussion for another time, perhaps – but with the organs of modern countries and governments. Penultimately, this piece will discuss not only this interaction with government, but their ongoing affect on the Canadian Real Estate market and the rapidly decreasing affordability of living in both Canada and the United States, an effect undoubtedly exacerbated by these same criminal groups.

It is no secret that different ethnic groups in North America have long held an affinity for gambling – a love which many cultures feel drawn to as a form of entertainment and escape from the dreariness of often mundane and unfulfilling work demanded of new immigrants in developed countries. In China and the thousands of Chinatowns that now span the Globe, games like Mahjong, Pai Gow and Sic Bo remain entwined with the habits of the local society. In Western countries, these pastimes have intermingled with other games, such as Baccarat, Poker and popular traditional casino games of chance creating a broad swath of opportunities to gamble away hard earned cash for the fleeting chance of winning a way out of poverty or the banality of the vast majority of modern lifestyles. And, there still remain various permutations of the old Italian and African American urban tradition of playing the daily numbers lottery.

Although violent repercussions are also associated with the underground aspects this behavior, there exists an unfailing addiction to gambling within aspects of the Chinese immigrant population. In north Scarborough alone – in neighbourhoods close to the Kennedy Rd. and Passmore Ave. as well as the Midland and Finch avenues intersections – police investigators have discovered at least 28 illegal gaming houses, where some specific game of chance takes place, and five casinos, replete with slot machines and several different gaming tables each hosting a different amusement. These casinos are large, often with capacity for well over twenty people, and well-furnished with facilities that make them appear in similar, albeit reduced grandeur to the real things. While often tucked into small storefronts and thinly disguised as “social clubs,” they can also be found based out of houses or industrial basements. Regardless of their locations, dead bodies and injuries created by the debts incurred at these “clubs” have been found throughout the area. Debtors, recalcitrant or not, have been beaten, robbed and, in some cases, disappeared, feared murdered. While the victims often span the ethnic spectrum, in each case the perpetrators of the crime are believed to be gangsters of Chinese descent, who serve in enigmatic organizations often colloquially referred to as Triads.

Part of the secret Tiandihui traditions deriving from southern China, all of which require initiation rituals and are based on a long tradition of bucking state authority, such organizations were formed to overthrow, what were seen at the time, as non-ethnic Han imperial dynasties. Aspects of these groups, later identified as Triads and Tongs, eventually became community support and protection networks for the safe-guarding and economic wellbeing of the communities in which they plied their trade. From these practices of covert rebellion and subversion came, what is still seen and experienced in parts of China today, an ongoing refusal to submit to the will of the contemporary government. And, with their traditional sense of hierarchy, it is no surprise that today the vast majority of Tongs and Triads are perceived to be supporters of the Kuomintang – the nationalist forces controlled by Chiang Kai-Shek that would later go on to found the Republic of China in Taiwan.

Following Mao Zedong’s ruthless but efficient dismantling of the secret societies within the People’s Republic of China during the 1950s and 60s, the Triads came to exist, predominately, in the territories of Macau, Hong Kong, Taiwan, and the Chinese ex-patriot communities around the Globe. However, as will soon be discussed, organized criminals in China did not cease to exist following the glorious communist and cultural revolutions. Instead they became referred to as “Dark Forces” and “Black Societies” and are generally described as mainland Chinese criminal groups. What differentiates the groups defined as Black Societies from their less sophisticated counterparts is their ability to gain protection from the state through corrupting its security apparatus. What this situation implies is the continuation of large, organized criminal syndicates operating under the shadow of long held traditions and often in collusion with certain corrupt elements of the Chinese state, which, in essence, sounds a lot like the continuation of the Triad tradition. But whether the Triads continue to exist secretly in China or not is beside the scope of this long story. What is known is that Triad groups continue to operate in the Chinatowns found overseas and that these groups continue to operate as incredibly organized, intercontinental syndicates with the ability to influence economies and practice violence in various countries across the planet.

Of the dozens of the recognized Triad groups (the “Tri” referring to the trinity of important elements that comprise the World – Heaven, Earth, and Man) many have established colonies for the purposes of their illicit dealings. In North America, several of the largest and most well-known have been established for generations. Such groups include:

  • Wo Shing Wo – a large and notorious Triad group, which established itself in Toronto in the 1930s;
  • Sun Yee On – reportedly the largest Triad organization in the World and with a heavy presence throughout North America;
  • 14K Triad – perhaps the most publicly infamous of the known groups in North America by virtue of its interesting moniker, this organization is firmly established throughout the Western Hemisphere.
  • Shiu Fong – based in Macau, the leadership of this criminal enterprise has been clearly linked to Canadian real estate fraud.

Each of these networks and other elements of the same subculture are based out of the financial centres of Macau, Taiwan, and Hong Kong as well as its burgeoning hinterland in Guangdong Province in mainland China, which now also boasts a developed financial sector and ever expanding industries. Many observers note that, with the encroachment of communist China on the coastal former colonial territories, the Triad groups and their affiliates have transitioned many of their rackets into the white collar sphere, eschewing overt incidents of rampant public violence and ostentatious displays of influence or wealth.

             Certainly some of the most obvious rackets recently developed and overseen by these groups involve the control of casino establishments in the former colonial territories. Hungry for money and tourists from abroad as well as the Chinese mainland, the regions of Hong Kong, Macau, and Taiwan have all heavily invested politically and financially in establishing and empowering the casino business within their jurisdictions. Junket operators from throughout the region and around the Globe bring hundreds of thousands of patrons each year to the glitz, glamour and debauchery of these lavish complexes posing as alternate realities. Many identified Triad groups as well as their front men and companies own controlling interests in these businesses, giving them immediate access to the counting rooms and private gaming tables. Here, money can be siphoned off of the winnings before they are tallied and Triad loansharks can service the needs of top clientele in the palatial restricted rooms. All of these shady dealings occur on top of the sources of money that casinos have always provided for organized crime, regardless of the locale, such as: prostitution; burglaries; and infiltration of the workers’ unions as well as all construction and procurement businesses that service the casinos during and after their construction.

             While the infiltration of the casino industry in the Far East brought millions of dollars into the coffers of Chinese organized crime, it was merely a drop in the bucket when compared to the other enterprises in their portfolio. One of the principal rackets practiced by these groups remains human trafficking, mainly for the purposes of prostitution, which causes untold human misery on a vast scale among masses of powerless people – for the purpose of keeping this article to a manageable length this topic must be relegated to one simple sentence, which is itself a travesty, and will warrant a second look by PanAm Crime at a later date. Also among the old major non-white collar staples remains heroin trafficking, the production of which has been a cornerstone of the Chinese underworld since even before British warships barged into coastal Chinese waters in the 19th Century and founded the first international opium network. Today, Canadian, American and Chinese investigators all believe that Vancouver, British Columbia (BC) continues to serve as an international smuggling hub for directing the flow of heroin into the North American market. Originating in the Golden Triangle, the opium is broken down into morphine base and later heroin within clandestine laboratories situated throughout the rural hinterlands of Laos, Cambodia and Vietnam. The volume of this trade has grown so lucrative that its earnings are estimated to be in the billions of dollars, annually. According to the American Drug Enforcement Agency (DEA), which now has a permanent presence in the lower mainland area of British Columbia, the market reach for heroin will only continue to spread in the wake of the destruction and addiction caused by the ongoing painkiller epidemic and its latest infamous champion: fentanyl.

Beyond the normative Triad trade in opioids, these groups and their subservient distributors have also emerged as the paramount suppliers of precursor chemicals that are necessary to produce methamphetamine. Originating in regions with loose laws pertaining to these substances or with no laws at all, Chinese groups purchase these chemicals and ship them overseas to Mexican cartel groups or their own networks in North America. Consequently, Chinese organizations are now believed to have established market access points in Vancouver, Los Angeles, and western Mexican ports such as Acapulco in Guerrero State for the express purpose of expanding their influence within this marketplace. For instance, the Sinaloa Cartel and its meth kingpin, Ismael Zambada Garcia, is believed to rely heavily on the importation of precursor chemicals from China for its own domestic meth production before the finished product is eventually transported into the United States and beyond.
Perhaps the best example of this dominance over the worldwide methamphetamine trade is Lee Chau Ping. She became well known in Canadian law enforcement circles following her emigration from Hong Kong to Vancouver in 1992 while under investigation for trafficking in meth; at the time, she was considered the biggest meth trafficker in the World. While her network was subsequently dismantled, she managed to escape the dragnet and was last seen in Thailand in the final months of 1992. Unsurprisingly, her destination of choice when she initially fled China was Vancouver, where she obtained landed immigrant status and purchased an $800,000 (at the time) home in Richmond, BC. All of these activities were achieved while she was under investigation in Hong Kong, a fact which Canadian officials were clearly aware of – institutional behaviour that will be examined at greater length shortly.

The Triad-controlled casino business discussed above became the nexus for this entire hub of money and corruption for the simple fact that it allowed a ready method for hiding the ill-gotten gains. While the junket system utilized by these gangs creates anonymity for the gamblers, facilitating further criminal endeavours, it has primarily been used to launder the vast proceeds of the Triads’ illegal worldwide operations – this was its great raison d’etre for the Triad groups and the overarching reason for the casinos’ importance to them. In recognition of this obvious fact, Chinese authorities launched major crackdowns on Triad operations across China, Macau, and Hong Kong from 2013-2015, with tens of thousands reportedly arrested. The heat placed on Triad operations in these formerly insulated gangland locales created a significant reduction in Triad earnings within Macau casinos and those like them. Revealingly, with their long-established and incredibly profitable money laundering destination and tools suddenly out of the picture, a sudden spike in real estate values in specific jurisdictions allowing for various tax and investment loop holes was soon witnessed. In areas with specific weaknesses in foreign investor and international money transfer legislation, such as the major Canadian cities of Toronto and Vancouver, skylines began to rise exponentially. While business interests in these areas saw such change as incredibly beneficial to their bottom line, citizens in these regions worried about the long-term sustainability and livability of their communities.

In fact, such changes had been witnessed and discussed at the highest levels within the Canadian and American governments prior to this wave of potentially shady foreign investment in the real estate market. Again, the culprit was Chinese organized crime and ineffective regulations to preclude such perceivably reckless behaviour. With the transfer of Hong Kong from British to Chinese authority thousands of Hong Kong citizens began to stream out of the former colonial territory, seeking refuge from the expected crackdowns on citizen freedoms, private enterprise, and criminal organizations by the communist regime in Beijing, that was seen to be licking its chops in anticipation of dismembering an unprotected Western society. During the Hong Kong exodus over 200,000 people immigrated to Canada in the mid-1990s, with tens of thousands more disembarking for the country in the early 2000s. Similarly, in New York City alone the Chinese immigrant population surged to over 500,000 by the year 2000 from under 300,000 less than a decade before. In the aftermath of the Hong Kong wave Canadian authorities eventually identified hundreds of individuals that applied under the “investor” or “entrepreneur” program as being connected to criminal syndicates in Hong Kong or to other individuals suspected of maintaining those connections. And, as many community groups and law enforcement officials remarked at the time, the vast influx of money and people were simply too much for anyone to keep track of, allowing incredible amounts of capital and new-arrivals to disappear from the surface of public scrutiny and descend into murky realm of both countries’ vast underworld.

This theme of lax or ineffective regulation has been touched on previously but will quickly become one of the central pillars of this story. According to the Chinese Central Commission for Discipline Inspection (CCDI), which issued a warning in 2017, it is actively seeking help from those countries with investor and entrepreneur migration programs in order to track wanted criminals and, more importantly for the Chinese government, money being illegally transferred out of country – Canada currently offers a refundable $800,000 loan and $100,000 in business equity as part of its investor and entrepreneur programs. In essence, the Chinese government rightly feels that this system incentivizes the breaking of Chinese law (which forbids the undeclared removal of more than $50,000 from the country) and the hiding of Chinese money away from the scrutiny of public officials and private auditors. According to statements made by the Canadian Border Services Agency (CBSA), “agents at airports in Vancouver and Toronto seized $15,019,891 in either undeclared cash or monetary instruments from 869 Chinese nationals between June, 2012 and December, 2014.” Yet, in almost every instance of this behaviour being caught the result was either small fines being levied or forcing the perpetrators to return to their country of origin, with both practices producing little or no lasting effective deterrence. Simply put, Canada continues to seek investment to support its burgeoning housing market in order to prop up a national economy that has seen its oil revenues diminish considerably even as its manufacturing struggles to come to relevance after decades of under investment and political abandonment. What has become apparent to China is seemingly a mystery to countries such as Canada where unwilling or ineffective efforts at policing Canada’s own policies on investment have been surpassed only by a considerable attempt to ignore the needs, policies, and requests from countries requesting help, such as China.

On the surface, this system appears skewed to benefit Canada at China’s expense and, certainly, China does not benefit from the disappearance of money and people they are looking for. The CBSA, for instance, states that it believes that a sizable minority of Chinese nationals in Canada are utilizing Canada’s lenient border laws, permissive property rules and loose regulations to defraud their home country. However, while this black or grey money is being used to bolster housing markets in specific regions, such practices are simultaneously making housing prices and quality of life unsustainable for many Canadians, placing home ownership and therefore the goal of a middle class lifestyle out of reach. Consequently, while the Canadian government, as we will further see, has effectively blinded itself to these troubling issues, this reality has increased the ability of more hardcore criminal elements to transport their finances across borders, disguise their involvement in the economic and political realm, and infiltrate the legitimate economy to their own ends. The ability of renowned meth dealer Lee Chau Ping to immigrate to Canada was due entirely to the nonchalant attitude of Canadian officials in the face of Ms. Ping’s ability to participate so lucratively in the immigrant investor program.

1997 was an auspicious year for those designing and participating in real estate fraud. Not only did the year bring about the dismantling of British control over their Hong Kong territory but it was also the year that security agencies within the Canadian government identified a disturbing trend indicating that the Chinese government utilized criminal groups within its borders to facilitate smuggling, real estate fraud and money laundering with actors in countries around the Globe. These allegations were outlined in a report entitled: Operation Sidewinder, which describes an alliance among the Beijing government and its espionage services, specific Hong Kong tycoons and the Triads. The ultimate objectives of the nefarious arrangement included:

  • Gaining influence over Canadian politicians;
  • Obtaining high-tech secrets;
  • Establishing various money laundering networks and methods; and,
  • Establishing control over Canadian real estate, media and other companies in specific sectors.

While it should be noted that the conclusions made in this report were disputed by many members of the Canadian government, PanAm Crime believes that where there is smoke, there is at least a modicum of fire, as the findings reached by many of the other sources listed in this article outline and demonstrate that the statements offered in the initial 1997 Sidewinder report, while perhaps not definitive, were certainly accurate enough to produce significant concern and warrant subsequent political action, which did not occur of course. A later version of Sidewinder was issued in 1999 and sought to undermine the findings of the initial report that was apparently shelved for “political reasons.” Supporters of this revised version stated that the original should only have hinted at its conclusions as they believed that there was no conclusive proof for the specific allegations listed in the account. But, when examining the myriad examples that appear to agree with the 1997 iteration of Sidewinder the assertions that this earlier version was exaggerated do not seem to fly.

For instance, security agencies in both the United States and Canada have begun to track links between domestic companies within their borders and disreputable Chinese government activities involving political donations for the purpose of acquiring political influence. The FBI has reportedly identified at least 200 such companies in Canada alone, and south of the border that number balloons to over 2,000. The actions of such businesses include but are not limited to the purchasing or founding of Chinese language media and food production companies, as well as other enterprises that provide lucrative disguises for these gangsters and spies to blend with the local Chinese community. In the province of Ontario, several Chinese-language TV stations and production studios were reportedly bought by Triad members or their associates, who almost always were found to have connections to Chinese government officials. In another instance of outright criminality, a food production company listed in the original Sidewinder report and also based in Ontario was later found by the Royal Canadian Mounted Police (RCMP) to be importing heroin while also meeting regularly with Chinese government and military officials. As one investigating official stated, “we aren’t facing a small exodus of select criminals – we’re talking about a tidal wave of people, and understanding where their wealth came from is not easy.” And, where illegal money goes corruption follows, as American border service guard units have discovered to their shame and dismay when dealing with cartel groups along the Mexican border.

It is important to parse the allegations made by both the sources utilized here and this article itself. States are not uniform actors, even those as supposedly centrally controlled as the quasi-communist government in China. As in all states, different actors within the Chinese ruling institutions want different things. Therefore, it is rational to assume that various elements celebrate the ability of Chinese nationals to illegally hide their money and interact with organized crime while other actors in that same government actively hunt the perpetrators of those same crimes. While such varied motives and actions can be caused by cultural, regional, confederational or even political differences, governmental unity can also be subverted by corruption and venality. In a startling example of such realities a Canadian immigration judge was brought up on 33 charges of accepting illegal immigration applications from Hong Kong citizens during their rush to flee that territory during the late 90s. In China, individuals in one of its most corrupt jurisdictions – Jilin Province – have used connections through organize crime to foster relationships with government officials that have provided public resources to found many local companies and businesses that then bill the state for services that are generally never completed. Clearly, as can be seen, almost no institution, sub-state actor or government itself can be wholly insulated from or devoid of such problems.

In Canada and other Western countries blindly striving to gorge themselves on foreign investment, the “maze of deals” designed and utilized by Chinese criminals have also been established by Chinese organized crime. Sun Commercial, one of many such companies utilizing this web of disinformation, has a portfolio of well over a dozen businesses, each of which is part of what is known as a “daisy-chain” of companies designed to obscure the true sources of income and confuse authorities that are seeking to perform oversight or obtain taxes. Indeed, the Paris-based Financial Action Task Force (FATF) has identified investment and real estate loop holes as paramount areas of concern for the ongoing worldwide campaign to improve aspects of regulations that permit the undocumented movement of capital and can therefore by utilized by criminals and money laundering networks. The vast majority of such investments in the property sector are done through legally incorporated companies that have no registered owner and cannot be tracked back to a specific buyer (criminal). In the cases where such daisy chains of ersatz companies have been constructed, requiring investigators to sift through the companies that provide no real services or goods in order to find the original, which is also often listed under a fake or untraceable name, lawyers are used by the criminal groups to establish trust funds that again require no legal name or identifier to be attached.

Such schemes may indeed be part of what the 1997 iteration of the Sidewinder report identified as Chinese Triad groups manipulating Canadian real estate for their own financial benefit. While this statement is stunning in the repercussions it envisions, the supporting numbers themselves are revealing and jaw-dropping. Both the RCMP and Canadian Security Intelligence Service (CSIS) noted that in 2012 real estate sales in dollar values in the province of British Columbia declined by almost 20%; yet, after the anti-Triad crackdowns in Macau and Hong Kong commenced in 2013 the BC market did an abrupt about-face, experiencing an almost immediate increase of 12%. It has continued to “find money” since that time. Toronto real estate followed the same trajectory with sales in dollar values declining by 12% in 2012; yet, like BC, the market witnessed a major upswing in 2013, with dollar amounts increasing by 20%. It has grown exponentially since then, with some properties seeing 148% growth between 2013 and 2016. While many attribute this improvement to the global economic recovery following the 2008 collapse in the United States, under basic economic principles this development should indicate that the incomes of citizens in this region increased while interest rates decreased. However, median household incomes across Canada, including Toronto and Vancouver specifically, have continued to decline in the face of inflationary pressures, with incomes remaining stagnant, hiring being mostly limited to part-time work, and interest rates being artificially kept low to stimulate the still chilly economy.

Such factors as well as failing regulatory practices indicate that foreign (Triad) investment is driving the property market rather than domestic investment deriving from some form of economic stimulus or recovery. In British Columbia, foreign buyers of property require a down payment worth 35% of the sale price. However, signs in multiple bank branches in the metro Vancouver area, such as some run by the Canadian Imperial Bank of Commerce (CIBC), advertised: “no income verification required,” in spite of the apparent stringent down payment requirement. Beyond CIBC, the Financial Transactions and Reports Analysis Centre (FinTRAC) – which is responsible for enforcing anti-money laundering legislation – stated it found “severe” deficiencies in the actions of several dozen greater Vancouver area real estate brokerages. And, it is now thought that the preponderance of foreign buyers relied on an illegal technique for smuggling funds across borders known colloquially as “smurfing.” This technique involves reducing large sums of capital down into much smaller, discrete amounts that can then be disseminated to various bank accounts to avoid regulatory detection by authorities, financial regulators and, in theory, the banks themselves. One defendant in a 2014 BC court case described how CIBC effectively promoted this process, thereby encouraging prospective foreign buyers to violate the laws of their home countries and artificially inflate the price of real estate in that jurisdiction.

So, while the Chinese government restricts the movement of capital to just $50,000 within a specific amount of time, breaking down the amounts necessary to purchase a house also necessitates that the prospective buyer have friends and family transfer the money to them using multiple Canadian and Chinese bank accounts. Once the money is in North America the government of Canada’s poor standards on reporting the sources of money from foreign countries ensures that the funds from overseas are essentially washed clean. It doesn’t matter if the source of that money is income from methamphetamine sales or graft payments, Canada does not have the regulation in place to ask and therefore, in practice, does not care. In one instance, a private fraud investigator tracked one Chinese national who entered the country illegally and reportedly invested at least $450 million into real estate on the Lower Mainland. According to a National Post article from 2016, “the belief that there are hundreds of real estate investors in Vancouver who are under suspicion in China (for smuggling out Chinese money) is shared by Canadian law enforcement sources;” as one law enforcement official recently lamented: “Sometimes we ask ourselves if we’ve already lost the battle.”

As reiterated repeatedly throughout this article, the net result of Canada’s inability and unwillingness to police its own regulations pertaining to real estate means that it has become a haven for hiding illegal money, money laundering schemes and, therefore white-collar criminals – the new purview of the Triads, globally. Consequently, according to Transparency International, officials in Vancouver are unable to find the true legitimate owners of nearly half of the City’s wealthiest homes. At one point, beyond the issues with the foreign buyers’ restrictions, all real estate agents, brokers, developers or accountants were required to declare large or suspicious sums of cash. However, lawyers and those brokers working in Quebec do not, as this practice was ruled unconstitutional by the Supreme Court of Canada given that it supposedly violated lawyers’ right to keep clients’ info confidential. The practice of requiring the declaration of all sources of funding had been enshrined under the Proceeds of Crime (Money Laundering) and Terrorism Financing Act (PCMLTFA), but has since been overturned in the wake of the Supreme Court’s decision. In essence, this decision creates a reality where purchases in cash – the premium medium for transferring proceeds of illicit activities – are incentivized, no longer tracked, and can be used by foreign companies to buy property without providing any information as to who owns them and their ownership structure. In fact, the only info provided is the title holder, which can also easily be a trust or shell company with no names attached.

As a consequence of Canada’s ongoing failure to dis-incentivize the hiding of illicit gains from Triad-sources, China has listed Canada as a country from which it wishes to recover the proceeds of internal corruption. Canada has also become recognized around the World as a tax haven with an extremely ineffective anti-money laundering regimen. The Asia-Pacific Group on Money Laundering has routinely made statements to this end, to no effect, as have numerous other national and sub-national groups, such as Transparency International. Even worse, it appears as if these admonishments are doing little to undermine a deliberate campaign to further institutionalize immoral behavior, as made clear by the recent scandal involving deals between the Canada Revenue Agency and the accounting firm KPMG, which actively hid of hundreds of millions of dollars from the public purse. Simply put: the Canadian government appears unwilling to even entertain the notion that it is itself enabling white-collar organized criminal activities on a massive, societal-wide scale.

PanAmerican Crime often opts to avoid making judgments on the morality of specific criminal actors regardless of the unethical nature of the actions they commit, as the personal environment, family traditions, and personal histories of such people are often littered with the debris of hard lives and tragic decisions; however, in the case of the housing emergency that is sweeping Canada’s wealthiest cities it behooves those who are witnessing the mortgaging of Canada’s middle class, livability and the possibility of non-millionaires purchasing domiciles for their families in which to live to say something. What is occurring in not economics; it is fraud, graft and greed posing as the inevitability of the invisible hand operating in a current economic environment that demonstrates clear cracks and fissures. And yet, the artificial management of the Bank of Canada’s overnight lending rate to ensure some form of growth in an economic setting that is largely devoid of any other positive drive forward has ensured the results that Canadians now experience daily. If interest rates rise, people will now lose their houses as they were forced to invest or borrow beyond their means; if structural changes aren’t made and interest rates not used to influence unsustainable lending – which remains one of their primary albeit recently ignored functions – then future generations of Canadians will not be able to afford home ownership and, with the continual dismantling of pension plans, will be unable to retire given that they will never be able to afford significant investments that will pay any form of livable dividends upon retirement. The result of these decisions is that it has become some form of running joke within the financial sector, which is unfortunately belied by frequent reports in the media that Canada’s debt to disposable income ratio has become the highest ever recorded on record in this country: 167.6% in September, 2016 – and the problem has not improved.

PanAmerican Crime endeavours to suspend false notions about the supposed inevitable nature of political and social decisions as they relate to organized criminality. In every case, judgments are rendered that either empower or reduce the scope of organized crime’s capacity to act or enrich itself. What Canada and other Western countries continue to do is provide a natural harbour for criminal organizations to berth themselves in order to weather the pressures that beset them, and such is exactly what has occurred with Chinese organized crime. Triad groups and other organized criminal entities originating from China – be they Black Societies or Dark Groups – have benefitted exponentially from Canada’s economic turmoil and its lack of political will to fix glaring fissures and other obvious issues within both its legal and economic systems. Yes, Triad groups enable the practices of gambling, drug and human trafficking, loan sharking and a multitude of other actions offensive to many in civil society. But, their ability to do so with the effectiveness described earlier in article, to the point that they continue to leave bodies in the streets of Canada’s most populous and wealthy metropolis even as they buy up land there, is a result of these same groups’ incredible power to influence their own economic environments. Their wealth buys political and law enforcement protection and legitimizes their earnings and place within the societies in which they are hiding. Ultimately, their influence has grown to the extent that they now have tangible power over the economy of a G7 nation-state – what more needs be said.

 

By: Scott Paulseth

 

Sources:

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