'Narconomics and its tentacles': B.C. vows crackdown on fentanyl-real estate laundering
Attorney-General promises action after Globe expose reports that profits from deadly opioid trafficking have been funneled through property deals
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B.C.'s Attorney-General has pledged to crack down after an explosive investigation in the Globe and Mail uncovered what Vancouver journalist Kathy Tomlinson called Vancouver real estate's "latest dirty little secret": "shady money" from B.C. drug traffickers — funneled through property transaction loans and repaid to fentanyl suppliers in China.
The exposé by Tomlinson and Xiao Xu showed that some profits of the deadly fentanyl epidemic — which killed a record 1,422 British Columbians last year, 43 per cent above 2016 — are being laundered through the province's skyrocketing real estate market.
Over roughly the same period, as opioid deaths began to jump in late 2014, property values also soared, pricing many locals out of the housing market. According to the Globe, at least "17 such lenders … have collectively claimed a $47-million stake, plus interest, in 45 Vancouver-area properties in recent years."
Attorney-General David Eby vowed to get to the bottom of the allegations, and said that his government's independent investigation by Peter German — an anti-laundering expert lawyer and former RCMP and Correctional Service deputy commissioner— could "explore what connection, if any" the allegations may have to real estate, casino crime and taxes as part of his casino investigation launched last fall.
"The nature of these allegations, that this money-laundering activity is actively influencing our real estate market and is connected to the sale of life-destroying fentanyl, underline the critical importance of addressing money laundering urgently and not ignoring it," Eby said in a statement Friday evening. "This story confirms our government's commitment to taking action to crack down on money laundering and criminal activity in B.C."
University of Windsor law professor Bill Bogart refered to the realty-drug connections as an example of "narconomics and its tentacles."
Richmond city coun. Harold Steves said he's not at all surprised by the disturbing revelations about money laundering in the real estate market in his city.
"We heard rumours for years that drug money was involved in some of Richmond's big houses, and of other unsavory uses in the (Agricultural Land Reserve)," he tweeted Friday night. "Now we know it is true."
The federal government is also monitoring the issue of how illicit dealers of fentanyl and other deadly opioids ensure their income looks "clean."
"The laundering of the proceeds of fentanyl trafficking in Canada generally takes place through Canadian banks, caisses populaires and credit union," according to an operational alert on the website of the federal Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), on Jan. 31. "Financial intelligence suggests that traffickers procure fentanyl, and its analogues and precursors, from overseas sources, mainly in China. Traffickers most often pay for these materials with wire transfers and money orders processed by money services businesses."
Central Okanagan-Similkameen Conservative MP Dan Albas — the federal Tories' critic for small business — said the allegations "must be examined in the Finance Committee’s review of Canada’s money laundering regime," he wrote in a tweet Saturday.