Failed B.C. Money Laundering Investigation Prompts Passionate Responses

Written By Matthew Lomon on March 7, 2023
British Columbia's largest transnational money laundering investigation recently closed with a special prosecutor recommending no charges.

British Columbia’s largest transnational money laundering investigation recently closed when a special prosecutor recommended no charges be filed. Paul King Jin of Richmond, B.C. stood accused of laundering millions of dollars through the province, including at British Columbia casinos.

The decision comes after B.C Premier David Eby enlisted special prosecutor Chris Considine to independently review whether charges were warranted. Considine, in line with the B.C. Prosecution Service’s November 2021 inquiry, concluded there wasn’t enough evidence to prove a legal violation.

Meanwhile, this was not the first time Jin’s criminal syndicate caught the eye of the law.

In 2015, Silver International, Jin’s alleged illegal money services business was the target of a similar investigation called E-Pirate. However, Global News, in an exclusive report, revealed the RCMP’s investigation was derailed by disclosure concerns when federal prosecutors mistakenly divulged the identity of a police informant.

Extensive investigation reveals sophisticated scheme

Featuring covert surveillance and elements of an undercover sting, E-Nationalize, the investigation into Jing’s latest alleged felonious endeavour, believe his routine was as follows:

Investigators determined Jing instructed wealthy clients to transfer cash from accounts held outside of Canada to accounts in China tied to two associates, referred to as A and B. Then, the associates would deliver a near equivalent amount of Canadian cash to Jing’s courier, with exchanges in discreet locations.

Once in hand, Jing would either take the cash to his stash house or dispatch it to his loan facilitators. On certain occasions, loan facilitators brought the money directly to Jing’s clients.

Furthermore, Jin supposedly would convert the cash into bank drafts or casino chips for his clients.

Considine alleged that between Feb. 4 and May 19, 2017, Jing:

  • Received approximately $5.4 million in bulk cash from A and B;
  • Provided over $6 million in cash, bank drafts, or casino chips to clients; and
  • Arranged for the deposit of roughly $7.2 million into the Chinese bank accounts of A and B

Several obstacles muddy seemingly cut-and-dry case 

According to Considine, three obstacles are the roadblock to prosecution:

1. Disclosure issues

In his words, the size and complexity of this case, along with the corresponding disclosure obligations, made it incredibly difficult for prosecutors to proceed.

  • Over 40,000 documents collected;
  • Ninety smart phones seized (45 extracted for data); and
  • More than two million communications intercepted, the majority of which were in Mandarin

If charges were laid as a result of the E-Nationalize investigation, the Crown would have an obligation to disclose to defence all information in its possession of potential relevance to the defence,” said Considine. “The extent to which the above-described information would meet that relevance threshold would likely be the subject of considerable dispute.”

Ultimately, Considine concluded that prosecutors could have overcome disclosure obligations and translation semantics.  However, the process would have been long-drawn and resource intensive.

2. E-Pirate concerns

The installation of E-Nationalization reignited informant safety concerns from the RCMP’s 2015 investigation into Jing.

An insurmountable error by prosecutors that endangered the life of a police informant terminated proceedings in that case.

Despite potential for a similar risk in this case, Considine said he does not consider this issue to be a fatal impediment to successful prosecution.

While there is some basis for concern, I do not foresee that a prosecution of offences disclosed by the E-Nationalize investigation would necessarily give rise to the same concern that caused the E-Pirate prosecution to fail.”

3. Need to prove a predicate offence 

Unquestionably, the most difficult obstacle for prosecutors was to prove that the money in question came from a predicate offence.

“The critical question is whether the Crown would be able to demonstrate that this cash was itself the proceeds of crime,” Considine said. “A judge or jury would need to be satisfied beyond reasonable doubt that the cash Jing was moving was ‘obtained by or derived directly or indirectly from’ the commission of an indictable offence… and ‘was obtained or derived directly or indirectly as a result of’ the commission of a designated offence.”

Investigators pegged Jing’s operation of an unlicensed money services business as the offence proving the cash was the proceeds of crime.

Conversely, no probes found a precedent where operating an unlicensed MSB constituted a predicate offence in a money laundering case.

Considine acknowledged this in his statement.

“While it is possible to identify on paper a theoretical legal path to conviction, my instincts tell me a prosecution is likely to founder,” he said. “The public interest would not be well served by embarking on an expensive and lengthy prosecution that comes to naught.”

In the end, trial proceedings became murky due to the lack of clear legal language and precedent in Canadian Courts.

Peter German, a former RCMP Deputy Commissioner and experienced money laundering investigator echoed this sentiment.

“B.C. has had great difficulty maintaining charges under our proceeds of crime legislation,” said German. “Law makers in Ottawa and enforcement and prosecution authorities at both levels of government will no doubt be considering the special prosecutor’s comments and what can be done to strengthen our legislation, investigative capacity, and prosecution response.”

B.C. Premier calls for stronger legislation to fix faulty system

B.C. Premier David Eby scorned Canada’s current federal financial crime laws after yet another failed money laundering investigation according to a CTV New Vancouver report.

“Obviously, there’s a serious problem with federal criminal law that allows this conduct to continue in our province,” said Eby. “It’s probably shocking to British Columbians that you can have somebody in our province accepting suitcases full of bundled bills, operating in an unlicensed, illegal so-called money service business, receiving the money clandestinely, and that after teams of prosecutors have reviewed that conduct that there is no criminal charge that they can find that they can proceed with.”

Eby’s comments allude to one of the changes Considine proposed in his report.

Considine suggested amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) that would align Canadian law with that of the United States and United Kingdom. 

As such, the act must criminalize the unlicensed operation of MSB’s that accept, deliver, and transfer funds locally and overseas. 

In addition to amendments to the PCMLTFA, Considine believes the Criminal Code also needs adjusting.

“The Criminal Code itself could be amended to specify that funds transmitted through a money services business that has not complied with the registration requirements (are), by definition, derived from the commission of an indictable offence.”

Why has this issue persisted in B.C.?

Ultimately, B.C. continues to struggle with money laundering because the current system enables it. At least, according to former RCMP transnational crime investigator Calvin Chrustie.

“The reason for the increase and rise and continual presence of the highest level [criminal organizations], is that from a risk-based analysis, these guys see no risk working here. Not because of the police, but because of the legal system,” said Chrustie. “There’s no risk to them in terms of prosecution.”

The lack of risk stems from two Supreme Court of Canada rulings that perpetuate stringent disclosure requirements.

First, the Stinchcombe case requires the Crown to fully disclose all evidence needed to make a full answer and defence. Next, the Jordan Case specifies the Crown and courts must get the case to trial within strict time limits.

Growing weary waiting for change on a Federal level, Premier Eby announced that the province will enact Unexplained Wealth Orders.

“Such orders are a significant expansion of the civil forfeiture of British Columbia and a direct response to cases like [E-Nationalize].”

Photo by Shutterstock
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Matthew Lomon

Matthew Lomon has been a contributor at Catena Media’s network of regional sites since July 2022. He first broke into covering the legal North American gambling industry with PlayCanada. Since then, Matthew's reporting has extended to PlayMichigan, PlayPennsylvania, and PlayIllinois. Based out of Toronto, Ontario, Matthew is an avid (bordering on fanatic) sports fan.

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