Casino investigators in B.C. probed real estate lawyers whom they linked to private mortgages, organized crime, and an alleged transnational money-laundering scheme, according to the province’s inquiry.
Brad Rudnicki, a BC Lottery Corporation anti-money laundering intelligence specialist, said in testimony on Tuesday at the Cullen Commission that his investigations suggested foreign high rollers were buying Metro Vancouver homes by loan sharks in the same way they were buying casino chips.
According to previous testimony, this is the so-called “Vancouver Model” of money laundering, in which transnational organized crime suspects Kwok Chung Tam and Paul King Jin are accused of laundering drug money by lending it to wealthy Chinese visitors.
An RCMP investigator claimed a day earlier that Jin and a Richmond currency exchange were involved in a drug trafficking ring, laundering money for drug dealers in China, Latin America, and Canada.
The RCMP claimed that Jin’s China-based underground banking organization laundered money by lending cash for casino chip purchases to Chinese visitors, who often secured these loans with private mortgages or promissory notes on their Vancouver properties. The inquiry heard that charges against Jin stayed in 2018 and that the results of a related RCMP investigation into Jin’s network are unknown. Tam and Jin both deny being loan sharks involved in organized crime.
In 2015, Rudnicki testified that his team began looking into real estate lending and property ownership in connection with Tam and Jin’s casino lending network. For different reasons, both men were banned from B.C. casinos for a period of five years, according to the inquiry. High rollers in the Chinese network often took private mortgage loans from Jin, Tam, and others, according to Rudnicki’s investigators.
He said he discovered that gamblers could use casino loan sharks to buy and renovate Metro Vancouver homes, then sell them for millions of dollars. And this could launder money in Canada for both the lenders and buyers, he said.
Rudnicki said that “You could almost replace ‘casino’ with ‘house. How these loans are paid back — it is very similar to the model of the players borrowing funds in the casino. (The loan) could be paid back overseas or in town.”
He added that his team looked into suspicious gamblers who classified their occupations as “student” or “housewife” but bet large amounts of money because it suggested they were linked to high rollers with hidden sources of wealth. This same relationship seemed to hold up in the real estate purchases by students and housewives, he added.
He said that “When we researched these players, we would find them attached to multi-million-dollar houses, and we could link them to another player in the database (who) wouldn’t be listed on land titles. These hidden high rollers were often connected to foreign companies and were believed to be relatives of the spouses or children fronting real estate and casino chip purchases.”
Lawyers who would register private mortgage lending contracts in B.C. was another pattern Rudnicki discovered in relation to Tam, Jin, and others.
Rudnicki mentioned an unidentified lawyer who was under investigation by the Law Society of B.C. after 2015.
He testified that “It could be unusual that private mortgages are being loaned from people linked to organized crime, and a lawyer was registering the mortgage. And the lawyer, in this case, had an investigation ongoing. so there were adverse media, (so casino investigators thought) perhaps this lawyer is being utilized for their ability to register private mortgages.”
Rudnicki said that an unidentified lawyer in another case was connected to a property with eight residents, all of whom listed occupations in Chinese hospitals, which seemed unusual. According to the investigation, the property owner was linked to a variety of real estate lending cases as well as three banned Lottery Corp. patrons, including Tam and Jin.
Rudnicki said that his data didn’t prove any wrongdoing on the part of lawyers involved in gang-related mortgages, but it did suggest that further investigation was warranted.
The commission’s mandate is to determine whether corruption or other issues allowed drug money laundering to take root in B.C. casinos and real estate.