B.C. Attorney General David Eby and former RCMP investigator Peter German deliver portions of report on money laundering at the B.C. legislature. (Black Press Media)

B.C. Attorney General David Eby and former RCMP investigator Peter German deliver portions of report on money laundering at the B.C. legislature. (Black Press Media)

Hot cars hide dirty money, B.C. organized crime investigation shows

Buying and selling super-cars an international money laundering tactic

B.C.’s luxury car market is being used to launder the proceeds of crime, former RCMP officer Peter German says in his report to the B.C. government on money laundering.

High-end vehicles bought with cash or bank drafts are being bought and sold by “straw buyers” or nominees and exported offshore, German’s report says. The “grey market” activity shows up in B.C. sales tax records, where tax is paid and then large numbers of tax rebates are applied for and paid.

“This report is disturbing confirmation that money laundering in B.C. is a problem that goes beyond our casinos,” said B.C. Attorney General David Eby, who released parts of the investigation dealing with vehicles and horse racing Tuesday.

“In the luxury car market, there is no financial reporting of large cash purchases, no oversight of international bank wire transfers and no apparent investigation or enforcement. It’s all a recipe for exactly what happened here – Vancouver becoming North America’s luxury car capital, generally, and perhaps North America’s used luxury car export capital too.”

The cash purchase or sale of vehicles is legal, but if the source of the money can be traced to criminal activity it is a serious offence, German said.

Regulations are being changed in B.C. to remove the onus on prosecutors to prove that the source of money is criminal, requiring only that they demonstrate the use of money was “reckless,” Eby said.

READ MORE: RCMP has ‘no’ money laundering investigators in B.C.

READ MORE: Money laundering in B.C. casinos a ‘system failure’

The sales tax records show “straw buyers” buying multiple cars and selling them through the same exporters. “It was a surprise to us” to hear that grocery bags of cash were being brought into dealerships, German said.

Former Vancouver Police deputy chief Doug LePard helped in the investigation. He described car dealership staff accepting cash from buyers, and then helping them arrange for tax rebates.

Finance ministry staff report that they have seen a “dramatic increase” in rebate applications for vehicles destined for sale abroad. Before 2014, fewer than 100 vehicles received the rebate, and by 2016 the number of rebates had jumped to 3,674 vehicles.

In 2016 alone, a single “straw buyer” bought 29 vehicles, 48 buyers made between 11 and 29 purchases and 1,000 of these buyers were linked to the same exporter. Since 2013, the province has paid $85 million in rebates for exported vehicles.

Eby said buying and selling race horses has a long history of acting as a vehicle for converting and transporting cash. Activity at Hastings Racecourse in Vancouver and Fraser Downs harness racing track in Surrey did not turn up evidence of suspicious transactions, he said.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislature

Just Posted

Emily Steele holds up a collage of her son, 16-year-old Elijah-Iain Beauregard who was stabbed and killed in June 2019, outside of Kelowna Law Courts on June 18. (Aaron Hemens/Capital News)
Kelowna woman who fatally stabbed Eli Beauregard facing up to 1.5 years of jail time

Her jail sentence would be followed by an additional one to 1.5 years of supervision

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Asia Youngman (right) is pictured shooting another short film she wrote and directed titled Hatha. (Luba Popovic)
Peachland set to star in fantasy thriller film about N’xaxaitk’w — a.k.a. the Ogopogo

The film will follow an Indigenous teen as she navigates peer pressure, bullying and identity

Fruit farmers in the Okanagan and Creston valleys are in desperate need of cherry harvesters amid COVID-19 work shortages. (Photo: Unsplash/Abigail Miller)
‘Desperate’ need for workers at Okanagan cherry farms

Fruit farmers are worried they’ll have to abandon crops due to COVID-19 work shortages

Earls On Top at 211 Bernard Avenue in Kelowna. (Google Maps photo)
Downtown Kelowna’s Earls ordered closed after COVID-19 transmission

Earls on Top on Bernard Avenue will be closed from June 18 to June 27

Marco Mendicino, Minister of Immigration, Refugees and Citizenship during a press conference in Ottawa on Thursday, May 13, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Canada to welcome 45,000 refugees this year, says immigration minister

Canada plans to increase persons admitted from 23,500 to 45,000 and expedite permanent residency applications

Jeanette Megens
KCR: Volunteering is sharing your story

Kelowna Community Resources shares stories of its volunteers in a weekly column

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

Cpl. Scott MacLeod and Police Service Dog Jago. Jago was killed in the line of duty on Thursday, June 17. (RCMP)
Abbotsford police, RCMP grieve 4-year-old service dog killed in line of duty

Jago killed by armed suspect during ‘high-risk’ incident in Alberta

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

The George Road wildfire near Lytton, B.C., has grown to 250 hectares. (BC Wildfire Service)
B.C. drone sighting halts helicopters fighting 250 hectares of wildfire

‘If a drone collides with firefighting aircraft the consequences could be deadly,’ says BC Wildfire Service

A dose of the Pfizer-BioNTech COVID-19 vaccine is pictured at a vaccination site in Vancouver Thursday, March 11, 2021. THE CANADIAN PRESS/Jonathan Hayward
NACI advice to mix vaccines gets varied reaction from AstraZeneca double-dosers

NACI recommends an mRNA vaccine for all Canadians receiving a second dose of a COVID-19 vaccine

A aerial view shows the debris going into Quesnel Lake caused by a tailings pond breach near the town of Likely, B.C., Tuesday, Aug. 5, 2014. THE CANADIAN PRESS/Jonathan Hayward
Updated tailings code after Mount Polley an improvement: B.C. mines auditor

British Columbia’s chief auditor of mines has found changes to the province’s requirements for tailings storage facilities

Starting in 2022, the Columbia Shuswap Regional District is extending dog control to the entire Electoral Area D. (Stock photo)
Dog control bylaw passes in Shuswap area despite ‘threatening’ emails

CSRD board extending full dog control in Electoral Area D starting next year

Most Read