VANCOUVER—A councillor’s chance encounter with a taxpayer in the parking lot of city hall toting “bags of cash” to pay his property taxes has sparked a renewed focus on whether B.C. cities are doing enough to fight money laundering.
Counc. Melissa De Genova drafted a motion to council last week after a man carrying a bag of cash approached her outside of city hall and asked her where to go to pay his taxes.
The City of Vancouver accepted 19 cash payments in excess of $10,000 in 2018, and has received about 15 a year over the past six years, usually to pay property taxes, according to the city’s finance department.
After De Genova’s motion passed asking city staff to examine whether they should investigate the source of large cash payments for property taxes and business licences, the city said it would no longer accept cash payments over $10,000.
Vancouver has a reputation for being a haven for money laundering, said Christine Duhaime, a lawyer who specializes in financial crime. Under the direction of Attorney General David Eby, the province is currently investigating the extent of money laundering in B.C.’s real-estate sector.
Duhaime said De Genova’s worry about cash payments is probably misplaced, because it’s not an area that has been flagged as high-risk by international anti-money laundering bodies, and Duhaime said many people who now live in Canada come from countries where corruption is common and are averse to using the banking system.
But based on what she sees regularly in her practice, Duhaime said the public is right to be concerned about money laundering in British Columbia and there are things cities could do to help deter the practice.
“I have files I’m working on right now where people from China defrauded a bank over there, left China, somehow get immigration status here, and buy a bunch of houses in Richmond (a suburb of Vancouver), and then the banks in China trace them here,” said Duhaime. “And we’re not talking $10,000. It’s more like $10 million.”
One of her current files involves someone who was on a wanted list.
“I just shake my head,” Duhaime said. “How did he get a bank account? How did he get a mortgage? How come all these banks in China want him, but we can’t figure out that he’s on a wanted list?”
She said Metro Vancouver cities could work proactively on money-laundering risk in three areas that do fall under their jurisdiction: casinos, real estate and policing.
For instance, cities could make casinos sign agreements that require operators to report on what they are doing “to ensure our cities are not safe havens for money laundering.”
Cities could ask developers who apply for rezoning to provide their anti-money laundering policy, setting out how, for example, they can reassure the city that the proceeds of crime won’t be used to purchase unit in a new highrise.
Like casinos and banks, real-estate developers are subject to federal proceeds-of-crime legislation.
On policing, municipal governments set the mandate and budget for city police forces, Duhaime said. The motion passed by Vancouver city council includes working with the Vancouver Police Department to explore ways the city can implement a bylaw to require all people or companies involved in property transactions to provide “specific information to the city in the interests of deterring money laundering and the business of organized crime.”
The motion also directs city staff to work with the VPD to see whether the city could legally require information from property owners and business-licence applicants to help it prevent money laundering.
Jen St. Denis is a Vancouver-based reporter covering affordability and city hall. Follow her on Twitter: @jenstden