In Vancouver, a haven for money laundering, some people use ‘bags of cash’ to pay their property taxes

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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

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Runaway barges cause more than $1M in property damage, Vancouver police say

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Two heavy barges the size of soccer fields that broke loose of their moorings early Wednesday are believed to have caused at least $1 million in property damage, police say.

Sgt. Jason Robillard of the Vancouver Police Department told reporters at a press conference Thursday the barges were moored in North Vancouver when they came loose just after 5 a.m. and floated across Burrard Inlet toward Coal Harbour.

The barges, which were tied together and carrying shipping containers, damaged a seaplane base, a local restaurant and two luxury yachts in the Coal Harbour Marina.

« Fortunately, there were no injuries reported, » said Robillard.

VPD’s marine unit received a 911 call around 6:30 a.m. Wednesday regarding the floating barges, Robillard said.

Two local tugboats, two Port of Vancouver vessels and a VPD marine unit vessel managed to pull the barges back to North Vancouver just after 8 a.m.

The barges crashed into the harbourfront patio of the Lift Bar and Grill, breaking two glass panels on the Coal Harbour restaurant’s patio. (Ken Leedham/CBC)

Investigation underway

Vancouver police are investigating the the extent of the damage while the Transportation Safety Board investigates the cause.

Mohan Raman, operations manager for marine investigations at the Transportation Safety Board, told CBC News the barges were owned by two marine transportation companies, North Arm Transportation and Mercury Launch and Tug Ltd.

« We are still gathering information at this point and we don’t know the cause as to why the barge drifted or came out of its mooring, » said Raman.

CBC News contacted both companies but they have yet to respond.

One of the structures that suffered damage was the Lift Bar and Grill, a restaurant located next to the harbour. Restaurant manager Claire Clarke told CBC News two glass panels on the restaurant’s patio were smashed as a result of the impact.

Clarke said the restaurant’s engineers will assess the damage and the owners will be looking into making an insurance claim.

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CRA deploys new weapons against tax evasion: Freezing assets, seizing property

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The Canada Revenue Agency is using a new tool in its battle against tax evasion — one that experts say could radically change the way it pursues tax cheats.

For the first time, the agency has used proceeds-of-crime provisions in the law to freeze the assets of individuals charged with tax evasion.

Up to now, those provisions have been used only in cases involving suspected terrorist financing or money laundering.

« That is a tool that we have not used in the past, » said Stéphane Bonin of CRA’s criminal investigations division.

« I can say that this is indeed the first time, but I can promise you that this is not the last time that we [will use] those provisions of the Criminal Code to restrain or seize assets that tax evaders have acquired through their illegal behaviours. »

Sending a message

Marc Tassé, a professor with the University of Ottawa’s Telfer School of Management, said CRA’s decision to use proceeds-of-crime powers to go after tax dodgers will send a message.

« People who might have done some tax evasion already will see it as a game-changer, » he said.

University of Ottawa professor Marc Tassé says using proceeds of crime provisions in cases of alleged tax evasion is a ‘game-changer.’ (CBC)

Tassé said the proceeds-of-crime provisions can also be used to seize property outside of Canada. For example, if the CRA believes that someone has engaged in offshore tax evasion and used the proceeds to buy a vacation home or a yacht, the CRA could freeze or seize those assets.

Using the proceeds-of-crime provisions also can block tactics used by some tax evaders, such as declaring corporate bankruptcy to avoid paying the taxes, said Tassé.

« If they were to file for bankruptcy, the government wouldn’t be able to recover anything, » he said.

« But on the other hand, if they’re using proceeds-of-crime provisions of the Criminal Code, then at that point they are able to seize it immediately so it protects the assets. »

Tassé said the move may prompt some tax scofflaws to quickly take advantage of the CRA’s voluntary disclosure program. A taxpayer who comes forward to CRA and makes a voluntary disclosure about tax evasion still has to pay the taxes owed, but can usually avoid prosecution and penalties.

The case at the heart of the CRA’s initiative pits the agency against an Ottawa couple — Chi Van Ho, 52, and Thanh Ha Thi Nguyen, 49 — who own a number of rental properties.

Case involving rental property income

They are accused of under-reporting their income between January 2008 and December 2013 by $3.1 million, evading $523,532 in taxes.

The CRA said that Ho and Nguyen are « the listed shareholders, directors and/or corporate officers in multiple corporations in the business of residential and commercial real estate rentals and property renovation and development. »

« The criminal charges against Ho and Nguyen allege that, from 2008 to 2013, multiple schemes were utilized to under-report their taxable income, » said the CRA. « The schemes included appropriating funds from multiple corporations under their control for personal purposes, appropriating corporate rental income and manipulation of supplier invoices. »

The agency described the investigation that led to the charges as « serious and complex. »

Ho and Nguyen were charged in late October. The CRA has seized or restrained six rental properties and an automobile belonging to the couple.

The CRA has been crossing swords with Ho and Nguyen and three of their companies, which operate under the name Golden Dragon Ho, in the Tax Court of Canada since 2015.

Golden Dragon Ho Properties made headlines in June 2017 when tenants in some of its properties complained that the natural gas that heated their homes and powered their hot water tanks had been cut off because the landlord hadn’t paid the bills.

Leonard Shore, the lawyer representing the couple in the criminal tax evasion case, said he recently received « voluminous » disclosure materials from the prosecution and is now reviewing them.

Shore said the charges came after a lengthy investigation.

« This has been going on for at least a couple of years … A couple of years ago they conducted several searches into their companies, into their home, into their place of business. »

The case returns to court in January.

Elizabeth Thompson can be reached at elizabeth.thompson@cbc.ca

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How a builder’s affordable home program helped a Toronto couple onto the property ladder

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Being debt-free is a point of pride for Anthony and Vanessa Mitchell. Determined to become homeowners, the Toronto couple have done what many people find nearly impossible by paying off $22,000 in debt, including $12,000 in student loans, since they got married four and a half years ago.

“We love our zero balance,” said Anthony, 30, a curator with a music streaming service.

“We knew we would buy something but we just didn’t know when. Obviously we would want to have a house right away or something to call our own but we also were realistic about the fact that we had our debt,” he said.

Their ambition hardened after their son Elijah, now 2, was born.

Then, in life-altering happenstance, the Mitchells heard from a family member about an affordable housing program offered by Daniels Corp. designed to help families who couldn’t otherwise afford home ownership to step onto the property ladder.

Under the FirstHome Boost program, the builder uses federal and provincial housing supports to provide qualified applicants with interest-free loans for pre-construction homes worth 10 per cent of the purchase price — in essence a silent second mortgage. That money only gets paid back if the purchaser sells the home.

The program means purchasers don’t need to have a full 5 per cent deposit when they sign for their home. They gradually pay the deposit in the time it takes between agreeing to buy the pre-construction home and taking occupancy. If there are construction delays and the buyers have reached their 5 per cent deposit, they are able to save toward their mortgage in the intervening time.

Unlike a lot of their friends, the Mitchells didn’t have access to the “bank of mom and dad.”

“Our parents couldn’t afford that,” said Vanessa, 31, a youth program co-ordinator. “Both of us worked our way through school, paid for our wedding and there were no extra funds to put down on a place.”

The Mitchells are typical of the families that Daniels targets with programs like FirstHome Boost, said Martin Blake, vice-president and the company’s point person on affordable housing.

“They’re the employees the city needs to be able to be able to operate. They’re hard-working people who generally have two incomes, they’re working as many hours as they can to be able to make ends meet,” he said.

“We’ve had so many nurses, teachers who’ve come in and say they have great steady income but, ‘I don’t have someone to lend me money and I need this to help me become a homeowner,’” Blake said.

He figures that over its 34 years of business Daniels has built about 30,000 homes in the Toronto area and its affordable housing programs such as FirstHome Boost have helped about 3,000 families become homeowners.

The Mitchells are purchasing a 935-square-foot, two-bedroom condo at Markham Rd. and Sheppard Ave. E. for $485,000. It is one of about 100 affordable units that look just like any of the others in the 340-home development.

Advertised online as a “Scandinavian-inspired boutique six-storey condominium residences and townhomes,” the project is being built in two phases with homes ranging from studios to three-bedrooms.

FirstHome Boost buyers get first dibs on the condos that won’t go on sale to the general public until next year, Blake said, adding the company doesn’t begin selling to anyone before the project has broken ground.

“It’s a scary thing to become a homeowner. Usually it’s the largest investment you’ll ever make in your life. What you want to do is give certainty to people so that they can actually feel that this is something that’s going to happen,” he said.

Unlike old grant-based housing assistance plans, modern programs rely on tools such as silent second mortgages and rent-to-own scenarios — payback programs that give a hand up on one of the biggest barriers buyers face — saving for a down payment — but also help another family, Blake said.

Finding qualified buyers for the affordable units requires casting a wide net, he said. The income qualifications — at the moment they top out at about $89,000 — are stringent. The applicants must be renting and must also qualify for a mortgage.

They might make enough money but have too much debt to get a mortgage. Another family might really need the program but their income is $100 over the maximum allowed under the federal-provincial program rules. The rules are applied rigorously because the last thing anyone wants, he said, is for the money to go to someone who doesn’t need it.

Sometimes home ownership is a years-long process. Blake cites a buyer who approached the company in 2007 and didn’t become a homeowner until two years ago.

That’s an extreme case but programs like FirstHome Boost require a greater time investment than a typical visit to a sales centre.

“Generally someone has met with us probably between five to 10 times before they actually sign an agreement of purchase and sale. They probably are going to spend in the neighbourhood of eight or nine hours over a period of time,” Blake said.

For the Mitchells, it was worth the time and they said they took to heart the advice of the Daniels’ representative and a bank adviser with whom they were paired.

“They explain all the financial stuff, which is great because people like us, this is our first time owning property. It can get really confusing,” Vanessa said. “You have the Daniels representative plus you have the (bank) person that you’re partnered with. They give you the advice leading up to it — what it’s going to take.”

They made an initial payment of $7,000 and are now paying about $1,000 a month toward the required 5 per cent down payment.

“It’s basically to help you get into the market so you can build equity and get on your feet,” Vanessa said. “We’re just really thankful.”

Tess Kalinowski is a Toronto-based reporter covering real estate. Follow her on Twitter: @tesskalinowski

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Napanee man gets final notice to remove trailers, homeless living on property – Kingston

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Scott Drader stands in his front yard reading a final notice from lawyers hired by the township of Greater Napanee.

It essentially says eight trailers and the 10 people living in them have to be removed from the property of his Dairy Avenue home by the first week of December.

Drader has been in a legal battle with the town for nine months over the issue.


READ MORE:
Nearly a dozen homeless people could face eviction from pop-up shelter in Napanee

He got the trailers to try and help homeless people in the area, that he says have nowhere else to go.

Drader spent roughly $11,000 on the mobile homes and charges $450 a month to cover expenses like electricity and heat.

Drader says even Family and Children’s Services has used him as a stop gap to keep a roof over the heads of teenagers in their care.

“Actually in the last week, the last two weeks, I have four CAS (Children’s Aid Society) people here — kids.”

The problem, according to Drader, is his home doesn’t have the proper zoning for the number of trailers he has and adds he couldn’t afford the cost of the zoning change.

Drader says he has until Dec. 3 to remove the trailers and the people or he could end up owing the township a lot of money.

“Probably about a $150,000 in fines. Yeah, it’s $10,000 per trailer from what I understand plus the cost of the town removing them.”

Drader is now trying to sell the trailers and says he’ll continue to do what he can for the people he’s tried to help.

“If these people do have to go in tents, then I will purchase them tents.”


READ MORE:
Deadline looms over makeshift homeless shelter in Napanee

Brianna Payne was at Drader’s property visiting a friend who lives in one of the trailers while Global Kingston was interviewing Drader.

Payne said she has lived in the trailers off and on as well, but she’s concerned for her friend’s welfare right now.

“It does keep people off the streets and not freeze, but it just disappoints me to have to see my friend find a place to go. It hurts me.”

Drader says once he gets the trailers removed, he plans to move away from Napanee.

“I love this town. I’ve been in this town for 40 years, but I don’t like the way the town treats the people.”

© 2018 Global News, a division of Corus Entertainment Inc.

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U.S. online giant Zillow launches first Canadian property listings

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After months of speculation and outreach to the Canadian real estate industry, U.S. online giant Zillow begins posting Canadian properties on its site and mobile app on Tuesday.

The Seattle-based company has agreements to receive more than 50,000 Canadian listings, including those from Century 21, Right at Home Realty and Toronto-based Re/Max Ultimate Realty. The listings will be published in batches, starting with about 10,000 properties with others coming online in the weeks and months ahead, said Errol Samuelson, Zillow’s Vancouver-based chief industry development officer.

Zillow claims to attract more than 100 million visits a year from non-U.S. users.
Zillow claims to attract more than 100 million visits a year from non-U.S. users.

He is in Toronto this week meeting with about 75 industry leaders to discuss how they can partner with Zillow and to demonstrate the software that is available to brokers and agents here.

Just as with American listings on Zillow.com, the Canadian posts will display the listing agent’s name and contact details, including links to the brokerage. That information is posted free. Agents here can also post a profile or video with their free listing, something that some Canadian agents have already begun.

Eventually, the Canadian listings on Zillow will evolve to match the company’s U.S. business model, which allows other agents to pay to have their details appear next to a listing in order to harvest leads.

Home buyers can search by city, neighbourhood or a specific address.

The previous selling prices of Canadian homes won’t be available at first, but Samuelson said he hopes that will come in time, depending on the rules.

“In the U.S. in most markets we show the full listing history. Our goal is to show the same information in Canada because consumers find it super useful. Having said that, we will abide by the local customs and laws,” he said.

Read more:

Supreme Court dismisses real estate board’s appeal application on sold data

Canadian listings will be available on the Zillow site and its mobile app.

The company has a mobile-first policy, said Samuelson, adding that, “Mobile may be a way consumers really fall in love.”

“If you look at our market share for mobile users, we’ve got 75 per cent market share because we put so much emphasis on the mobile devices,” said Samuleson.

Zillow claims to attract more than 100 million visits a year from non-U.S. users.

Samuelson described Zillow as “a complement” to the most popular Canadian real estate search site, Realtor.ca.

Tess Kalinowski is a Toronto-based reporter covering real estate. Follow her on Twitter: @tesskalinowski

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Toronto teen was attending party at industrial property in Hamilton when fatally shot

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Natshon Defreitas was attending a party being held in the garage of an industrial property in Hamilton when he was fatally shot.

Now Hamilton police are trying to piece together what was happening at that party and why the 19-year-old unarmed Toronto man was targeted, said Det. Sgt. Steve Bereziuk.

Natshon Defreitas, 19, was shot and killed on Sunday morning in Hamilton.
Natshon Defreitas, 19, was shot and killed on Sunday morning in Hamilton.  (GoFundMe)

Police were called to the shooting at 470 Beach Rd., a one-storey industrial building at the corner of Martimas Ave., for a shooting around 4:15 a.m. Sunday. But before police arrived, other party goers pulled the dying Defreitas into a pickup truck to try to race him to hospital.

On the way they saw a fire truck at another call and stopped at Ottawa St. N. and Dalhousie Ave., where he was transferred into an ambulance and taken to the Hamilton General Hospital. He was pronounced dead in hospital around 6 a.m.

An autopsy confirmed he died of a gunshot wound.

Police have not said how many shots are believed to have been fired and where on the property Defreitas was shot.

Police have also not released any description of the suspected shooter, but Bereziuk said detectives believe it was likely a single shooter. Police also do not yet know the motive.

The 19-year-old was described as being a charismatic and likable guy, in a statement from the family, provided through police. He enjoyed sports, track and field and loved to dance.

A GoFundMe account titled “Natshon Defreitas” has been set up by his stepmother, Sherrie Biggley, to cover some funeral expenses. They are asking for $2,500 and had raised more than $1,800 by Tuesday afternoon.

Police say the party was being held in a garage at the property, where alcohol was being served. Between 35 and 50 people were in attendance.

The group involved a mix of people from Hamilton and out of town, and invitations to the party, which Bereziuk described as “low key,” had been shared on social media.

A neighbour told The Hamilton Spectator a group had also gathered at that address the night before. However, it was not known to police and there was no record of noise complaints.

Bereziuk said the owner of the property rented the space out to an individual who hosted the party.

When reached by The Spectator, the building owner said he rented the space to a business but declined to identify to whom and how long they had been there. As far as he knows, parties have not occurred on the premises before.

“I have no idea what happened,” he said. “I wasn’t there.”

On Monday, police forensics officers continued to process the scene, with police tape blocking access to it as detectives interviewed witnesses and began to go through surveillance video of the area.

Defreitas was known to Toronto police, with whom Bereziuk said he will be speaking.

The witnesses police have spoken with have been co-operative, but Bereziuk said he knows there are likely more witnesses from whom police would like to hear.

This is the 22nd shooting in Hamilton this year, and the sixth homicide.

Anyone with information is asked to contact Det. Andrew Coughlan by calling 905-546-3874. To remain anonymous contact Crime Stoppers at 1-800-222-8477 or crimestoppershamilton.com.

With files from Natalie Paddon

Nicole O’Reilly is a reporter with the Hamilton Spectator. Email: noreilly@thespec.com.

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