Canada’s largest – and most shocking – money-laundering scandal is slowly inching towards more answers.
In early September, federal prosecutors announced they would proceed by direct indictment against Richard Charles (Ricky) Reed and Yuexi (Alex) Lei.
The pair face accusations of participating in the brutal murder of Jian Jun Zhu – an alleged casino money laundering kingpin. The shooting occurred as he dined at a Japanese restaurant in Richmond, BC, in September 2020.
Paul King Jin, another suspected money launderer, was also with Zhu at the time and survived.
Regardless, Reed faces first-degree murder charges while Lei is up as an accessory after the fact. Both appeared– via video due to custody– for the first time in Supreme Court on Sept.14.
However, the proceedings adjourned until Sept.21 as counsels still need to coordinate on a case management date with associate Chief Justice Heather Holmes.
Direct indictment only used in “exceptional circumstances”
According to the Canadian Criminal Code (s.577), the use of direct indictments only happens in “circumstances involving serious violations of the law.”
In these instances, the Attorney General of Canada or Deputy Attorney General must grant the exception – no one else can.
The designation is of particular significance because a direct indictment means bypassing the preliminary hearing, a process meant to assess whether there is sufficient evidence for trial.
Traditionally considered a fundamental piece of the Canadian judicial system. Evidently, in this case, the violations are severe enough to skip the legal test.
Drug money, national outrage and a botched case
Perhaps the special exemption shouldn’t come as a surprise.
After all, police believe Zhu’s operation – a storefront named Silver International – laundered $220 million per year through BC casinos. International anti-money laundering organization, Financial Action Task Force, pegs that number nearer $1 billion. Nonetheless, national outrage over chilling links to organized crime demands definitive action.
Thus, the Feds may be trying to save face at this point by expediting Reed’s and Lei’s sentencing with the direct indictment.
For years federal prosecutors had been mounting Canada’s biggest-ever prosecution case against Zhu – and his wife, Caixuan Qin.
But in 2019, Operation E-Pirate collapsed when the Crown botched the case in a routine evidence disclosure.
Allegedly, the evidence identified a key informant, forcing a federal judge to deem the proceedings too risky to continue. As a result, the court stayed the case, and nothing more came of it.
Government seize $1 million via BC Civil Forfeiture Office
Granted, government officials did pivot, launching a separate case through the BC. Civil Forfeiture Office against Qin.
A 2015 police raid unearthed more than $1 million of cash alongside casino chips, gift cards and more. The government got to keep it all in 2021. But – in the grand scheme – the amount is a drop in the bucket.
Scathing Cullens Report highlights significant issues in BC, Canada
Amid the comedy of errors came the Cullens Report.
Released in June 2022, the 1,800-page document scorched BC and federal officials for their incompetence in halting money laundering schemes.
However, it stopped short of saying any foul play had occurred amongst government officials.
In total, the report offers 101 recommendations. None more significant than the province’s need to develop an anti-money laundering agency. Supreme Court Justice Austin Cullen also implored the province to stop depending on the feds to tackle the issue.
As Reed and Lei continue the proceedings, it will be intriguing to see what other shocking details come to light.