BC’s attempts to stem the flow of illegal money into the province could be facing a Supreme Court challenge after the first of its so-called ‘unexplained wealth’ seizures faced legal challenges.Last November, the province’s solicitor general filed the first of a series of unexplained wealth orders targetting a Saltspring Island woman who bought a million-dollar home without a mortgage in 2017 and no verifiable source of income.The province is alleging Alicia Valerie Davenport obtained the funds along with her ex-husband, Geordie Lee, in a $200 million illegal stock trading scam that was moved through shell companies via a Swiss asset management company and laundered in part with the purchase of the house..“This filing is the first in several unexplained wealth orders that will effectively put those engaging in illegal activity on notice,”Public Safety Minister Mike Farnworth.The hearing went to court on January 11. It’s the first time such an order has been made in Canadian history.“This filing is the first in several unexplained wealth orders that will effectively put those engaging in illegal activity on notice,” Public Safety Minister Mike Farnworth said in a statement.“British Columbia will not tolerate criminals prospering in our communities. The public can have confidence that we will continue to go after illegally acquired properties, luxury vehicles, front businesses and money laundering schemes and turn those assets into community benefits.”.On February 9, Davenport formally responded to the allegations by noting the home was obtained from the proceeds of three separate properties the couple previously sold on separation and said the process violated her Charter rights.But in his own response filed in court on February 29, Lee denied they were ever married along with all wrongdoing and any knowledge of the alleged fraud..The civil forfeiture claims are controversial because they don’t require a criminal conviction for the province to seize assets. Also because they contain a reverse onus on the accused to prove where they got the money.It comes as the provincial government attempts to stem a black money laundering market that some estimates peg as high as $10 billion per year, or almost a quarter of the Canadian total. In 2018, about $5 billion was laundered through the real estate market, a figure which is surely an order of magnitude higher now.When he was BC’s housing minister — and attorney general — current Premier David Eby said money laundering was responsible for a 5% increase in already inflated housing prices.Last March when he became premier he urged Ottawa to tighten federal money laundering statutes. Although the term ‘money laundering’ conjures up images of crooks carrying hockey bags of cash, real estate provides significant multiple opportunities for moving around large sums through a variety of financial instruments all along the value chain, from construction, sales transactions and even renovations..“It is both an embarrassment and a threat to a society that adheres to the Rule of Law, for organized crime to take advantage of all that is good in our society and subvert it for pecuniary advantage,”Cullen Report.The cash can come from criminal groups involved in the drug trade, such as the Hell’s Angels, to offshore funds repatriated from countries such as China.An exhaustive and highly anticipated 2022 Cullen report commissioned by the province determined that up to 21% of residential transactions in BC are unfinanced ‘cash buys’ with offshore buyers comprising as much as 40% of the deal flow. The aggregate declared value of cash buys in the past 20 years is $84 billion to $212 billion. The current assessed value of those properties is much higher, at $230 billion to $440 billion.“It is both an embarrassment and a threat to a society that adheres to the Rule of Law, for organized crime to take advantage of all that is good in our society and subvert it for pecuniary advantage,” the report states.
BC’s attempts to stem the flow of illegal money into the province could be facing a Supreme Court challenge after the first of its so-called ‘unexplained wealth’ seizures faced legal challenges.Last November, the province’s solicitor general filed the first of a series of unexplained wealth orders targetting a Saltspring Island woman who bought a million-dollar home without a mortgage in 2017 and no verifiable source of income.The province is alleging Alicia Valerie Davenport obtained the funds along with her ex-husband, Geordie Lee, in a $200 million illegal stock trading scam that was moved through shell companies via a Swiss asset management company and laundered in part with the purchase of the house..“This filing is the first in several unexplained wealth orders that will effectively put those engaging in illegal activity on notice,”Public Safety Minister Mike Farnworth.The hearing went to court on January 11. It’s the first time such an order has been made in Canadian history.“This filing is the first in several unexplained wealth orders that will effectively put those engaging in illegal activity on notice,” Public Safety Minister Mike Farnworth said in a statement.“British Columbia will not tolerate criminals prospering in our communities. The public can have confidence that we will continue to go after illegally acquired properties, luxury vehicles, front businesses and money laundering schemes and turn those assets into community benefits.”.On February 9, Davenport formally responded to the allegations by noting the home was obtained from the proceeds of three separate properties the couple previously sold on separation and said the process violated her Charter rights.But in his own response filed in court on February 29, Lee denied they were ever married along with all wrongdoing and any knowledge of the alleged fraud..The civil forfeiture claims are controversial because they don’t require a criminal conviction for the province to seize assets. Also because they contain a reverse onus on the accused to prove where they got the money.It comes as the provincial government attempts to stem a black money laundering market that some estimates peg as high as $10 billion per year, or almost a quarter of the Canadian total. In 2018, about $5 billion was laundered through the real estate market, a figure which is surely an order of magnitude higher now.When he was BC’s housing minister — and attorney general — current Premier David Eby said money laundering was responsible for a 5% increase in already inflated housing prices.Last March when he became premier he urged Ottawa to tighten federal money laundering statutes. Although the term ‘money laundering’ conjures up images of crooks carrying hockey bags of cash, real estate provides significant multiple opportunities for moving around large sums through a variety of financial instruments all along the value chain, from construction, sales transactions and even renovations..“It is both an embarrassment and a threat to a society that adheres to the Rule of Law, for organized crime to take advantage of all that is good in our society and subvert it for pecuniary advantage,”Cullen Report.The cash can come from criminal groups involved in the drug trade, such as the Hell’s Angels, to offshore funds repatriated from countries such as China.An exhaustive and highly anticipated 2022 Cullen report commissioned by the province determined that up to 21% of residential transactions in BC are unfinanced ‘cash buys’ with offshore buyers comprising as much as 40% of the deal flow. The aggregate declared value of cash buys in the past 20 years is $84 billion to $212 billion. The current assessed value of those properties is much higher, at $230 billion to $440 billion.“It is both an embarrassment and a threat to a society that adheres to the Rule of Law, for organized crime to take advantage of all that is good in our society and subvert it for pecuniary advantage,” the report states.
