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Why is it "bad" when illegal money is brought into Canada?

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  • Oct 27th, 2020 4:57 pm
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Jul 8, 2017
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FreshCo wrote: Ahh yes, you're racist if you mention that a significant amount of Chinese money is ill-gotten or by corrupt means. Interesting.
The condo we lived in Hong Kong can buy 2 detach homes in the GTA, some time it is as simple as that. While I do not disagree some of the Chinese money is corrupted, however there are more legit money flowing into Canada than illegal.
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Oct 6, 2015
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FreshCo wrote: Ahh yes, you're racist if you mention that a significant amount of Chinese money is ill-gotten or by corrupt means. Interesting.
Sure, because there's little to no evidence of such. Foreign inflows into Canada are nearly entirely accounted for in known foreign investment. The system and the numbers are just so tight that there simply couldn't be any meaningful leakage outside of such. The people who concoct nonsense stories of fentanyl "money" or Chinese "money laundering" through casinos (what an incredibly inefficient method, BTW, that makes no sense) are just trying to deflect blame for their own participation in a Canadian debt-fueled asset bubble. Particularly in Vancouver/Toronto real estate.

I think its largely a case of jealousy, especially with respect to the students who come from wealthy Chinese families and happen to have nice cars. There are wealthy Canadian families that buy their kids nice things in overseas countries as well, but you don't see an entire race or nationality smeared by such by the local media usually. Southern Florida is crawling with well-off Canadians, yet nobody runs around claiming a fake housing "crisis" because of the Canadians.
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burnt69 wrote: Sure, because there's little to no evidence of such. Foreign inflows into Canada are nearly entirely accounted for in known foreign investment. The system and the numbers are just so tight that there simply couldn't be any meaningful leakage outside of such. The people who concoct nonsense stories of fentanyl "money" or Chinese "money laundering" through casinos (what an incredibly inefficient method, BTW, that makes no sense) are just trying to deflect blame for their own participation in a Canadian debt-fueled asset bubble. Particularly in Vancouver/Toronto real estate.

I think its largely a case of jealousy, especially with respect to the students who come from wealthy Chinese families and happen to have nice cars. There are wealthy Canadian families that buy their kids nice things in overseas countries as well, but you don't see an entire race or nationality smeared by such by the local media usually. Southern Florida is crawling with well-off Canadians, yet nobody runs around claiming a fake housing "crisis" because of the Canadians.
I know right, because it would be normal for a student to bring bags of cash to a casino!
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Oct 6, 2015
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No evidence whatsoever that such was laundered money. And why bother with a casino? Why not just spend the money? Pay rent with it for a while? Etc.? The whole story doesn't make any sense. One or two cases that might be suspicious doesn't make every person who looks "Asian" and owns a nice house in Vancouver a money launderer, despite what the jealous racist people may think. Even on RFD, we have seen plenty of people ask over the years if they need to conceal money they've been gifted to the government to avoid gift taxes, etc., -- a lot of what might be considered 'laundering' is actually borne out of ignorance of how taxes work in Canada, including no taxes levied on the recipients of gifts.
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Feb 9, 2013
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burnt69 wrote: No evidence whatsoever that such was laundered money. And why bother with a casino? Why not just spend the money? Pay rent with it for a while? Etc.? The whole story doesn't make any sense. One or two cases that might be suspicious doesn't make every person who looks "Asian" and owns a nice house in Vancouver a money launderer, despite what the jealous racist people may think. Even on RFD, we have seen plenty of people ask over the years if they need to conceal money they've been gifted to the government to avoid gift taxes, etc., -- a lot of what might be considered 'laundering' is actually borne out of ignorance of how taxes work in Canada, including no taxes levied on the recipients of gifts.
Admit nothing. Deny everything. Make counter-accusations.
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iflyplanes wrote: Admit nothing. Deny everything. Make counter-accusations.
The Trump playbook!
Last edited by smacd on May 1st, 2019 4:48 pm, edited 1 time in total.
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burnt69 wrote: No evidence whatsoever that such was laundered money. And why bother with a casino? Why not just spend the money? Pay rent with it for a while? Etc.? The whole story doesn't make any sense. One or two cases that might be suspicious doesn't make every person who looks "Asian" and owns a nice house in Vancouver a money launderer, despite what the jealous racist people may think. Even on RFD, we have seen plenty of people ask over the years if they need to conceal money they've been gifted to the government to avoid gift taxes, etc., -- a lot of what might be considered 'laundering' is actually borne out of ignorance of how taxes work in Canada, including no taxes levied on the recipients of gifts.
Because most legitimate businesses would raise concerns about customers bringing in $50,000-$200,000 in $20 bills and trying to spend them. The uproar about casinos was that casinos turned a blind eye to it.
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smacd wrote: Because most legitimate businesses would raise concerns about customers bringing in $50,000-$200,000 in $20 bills and trying to spend them. The uproar about casinos was that casinos turned a blind eye to it.
I suspect most of what's called 'laundering' is actually the children of owners of restaurants and other cash-heavy businesses, who, out of historical mis-trust for the banking system, never actually deposited their cash in the banks. So they inherit these large sums of money from decades of their folks running successful businesses, don't want to implicate their folks in tax evasion, so they go to precisely the most costly place to deal with the 'problem'.

I know I wouldn't have a problem spending $50-$200k in $20 bills. Simply take my salary in my bank account, and spend the cash on day-to-day living expenses. Nobody bats an eye if you buy $200 worth of groceries with $20 bills. Or pay rent with cash (servers do it all the time!).
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Oct 7, 2010
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No matter what you say. As long as the banks see a wire and its overseas. Its red flagged now for every wire. Wiring to buy a house is a big no no now.
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burnt69 wrote: I suspect most of what's called 'laundering' is actually the children of owners of restaurants and other cash-heavy businesses, who, out of historical mis-trust for the banking system, never actually deposited their cash in the banks. So they inherit these large sums of money from decades of their folks running successful businesses, don't want to implicate their folks in tax evasion, so they go to precisely the most costly place to deal with the 'problem'.

I know I wouldn't have a problem spending $50-$200k in $20 bills. Simply take my salary in my bank account, and spend the cash on day-to-day living expenses. Nobody bats an eye if you buy $200 worth of groceries with $20 bills. Or pay rent with cash (servers do it all the time!).
Until you try to spend your bills with Queen Elizabeth on them and William is king.
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Apr 4, 2001
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The main issue is that it's an international obligation, especially among advanced countries, to uphold an anti-money laundering framework. See FATF and IMF.

Real estate is a particular area of concern because when you combine alternative lending with a real estate transaction, there's not a lot of obligation to disclose the true beneficiary of the transaction.

If you have time (it is long) and are interested, this is worth a read:
This section of the bill was a monumental legislative achievement. Undeterred by the smoke clouds of crisis, representatives of the big banks had stalked the Senate, trying to quash the measure. Citibank officials reportedly got into shouting matches with congressional staffers in the hall. This anger reflected the force of the patriot Act. If a bank came across suspicious money transferred from abroad, it was now required to report the transfer to the government. A bank could face criminal charges for failing to establish sufficient safeguards against the flow of corrupt cash. Little wonder that banks fought fiercely against the imposition of so many new rules, which required them to bulk up their compliance divisions—and, more to the point, subjected them to expensive penalties for laxity.

Much of what Palmer had urged was suddenly the law of the land. But nestled in the patriot Act lay the handiwork of another industry’s lobbyists. Every House district in the country has real estate, and lobbyists for that business had pleaded for relief from the patriot Act’s monitoring of dubious foreign transactions. They all but conjured up images of suburban moms staking for sale signs on lawns, ill-equipped to vet every buyer. And they persuaded Congress to grant the (real estate) industry a temporary exemption from having to enforce the new law.

The exemption was a gaping loophole—and an extraordinary growth opportunity for high-end real estate. For all the new fastidiousness of the financial system, foreigners could still buy penthouse apartments or mansions anonymously and with ease, by hiding behind shell companies set up in states such as Delaware and Nevada. Those states, along with a few others, had turned the registration of shell companies into a hugely lucrative racket—and it was stunningly simple to arrange such a Potemkin front on behalf of a dictator, a drug dealer, or an oligarch. According to Global Witness, a London-based anti-corruption NGO founded in 1993, procuring a library card requires more identification in many states than does creating an anonymous shell company.

Much of the money that might have snuck into banks before the patriot Act became law was now used to purchase property. The New York Times described the phenomenon in a series of exposés, published in 2015, called “Towers of Secrecy.” Reporters discovered that condos in the ultra-luxe Time Warner Center at Columbus Circle in Manhattan were owned by a constellation of kleptocrats. One condo belonged to the family of a former Russian senator whose suspected ties to organized crime precluded him from legally entering Canada for a few years. A condo down the hall belonged to a Greek businessman who had recently been arrested in an anti-government-corruption sweep. The family of a former Colombian governor, imprisoned for self-enrichment while in office, owned a unit he could no longer visit.
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Over time, the gap between the noble intentions of the patriot Act and the dirty reality of the property market became too wide to ignore. In 2016, Barack Obama’s administration tested a program to bring the real-estate industry in line with the banks, compelling brokers to report foreign buyers, too. The ongoing program, piloted in Miami and Manhattan, could have become the scaffolding for a truly robust enforcement regime. But then the American presidency turned over, and a landlord came to power. Obama’s successor liked selling condos to anonymous foreign buyers—and may have grown dependent on their cash.
source: https://www.theatlantic.com/magazine/ar ... ca/580471/

Similar articles of less depth focused on the Canadian aspect have appeared recently in the Toronto Star and others (https://www.thestar.com/news/canada/201 ... -says.html)
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Nov 10, 2015
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Here's a fascinating read that just came out today.
A casino worker kept detailed notes going back to 1997. That's when the provincial government increased bet limits from $25 to $500 per hand, introduced baccarat tables and extended gambling hours. And surprise, surprise, it was an NDP government.
https://globalnews.ca/news/5215614/mone ... r-journal/

Some of her comments:
Within days, Labine noticed the VIP gamblers start to come in. But it was strange, she says, that these high rollers were almost always accompanied by young Asian men who gave them cash. Many employees in the Richmond casino started to call these young men “Human Teller Machines.”

Within months, revenue at the casino had nearly doubled. But there was a cost, Labine said. More cash, more fear.

Labine says she strongly suspected the $20s flooding across baccarat tables were drug money. Referring to a senior employee, a 1998 journal note reads: “(Name redacted) feels strongly that heroin, not extortion, is the major source of income for the sharks … according to him, deals occur all the time and are visible if you are paying attention. In public washrooms, according to him, on several occasions, (he) was witness to drug deals by the ‘Boys.’”

This observation is consistent with records in B.C. court files, which say police believed the Big Circle Boys preferred to make drug transactions in casinos because if police caught them, they could use casino play as an excuse for large amounts of cash.

Labine says her fear of the Big Circle Boys increased when she saw Richmond casino customers threatened and coming to the baccarat pit with facial bruises.

Things really got rolling in Vancouver when the casino rules changed in 1997. The Chinese gangs pushing heroin and other drugs now had a easy way to launder their money. From here it just took off, high-end cars, luxury homes and condos. They had to spend their money on something, so from the heroin cash laundered through casinos they bought legitimate products.
Yeah, the Chinese gangs/Triads have their feet firmly placed in Vancouver.
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Feb 1, 2009
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garmium wrote: I am not understanding the line of logic.

Say Pablo Escobar, the notorious drug lord, wants to bring his ill gotten money into Canada because he wants to buy Canada Goose jackets, Canadian maple syrup, seasons tickets to Raptors/Maple Leafs, real estate, Canadian beef, etc
How is this a bad thing for Canada?
This is different than money laundering, which generally talked about as being negative, because the goods are not being re-sold.
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Apr 5, 2013
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poleman wrote: Here's a fascinating read that just came out today.
A casino worker kept detailed notes going back to 1997. That's when the provincial government increased bet limits from $25 to $500 per hand, introduced baccarat tables and extended gambling hours. And surprise, surprise, it was an NDP government.
https://globalnews.ca/news/5215614/mone ... r-journal/

Some of her comments:
Within days, Labine noticed the VIP gamblers start to come in. But it was strange, she says, that these high rollers were almost always accompanied by young Asian men who gave them cash. Many employees in the Richmond casino started to call these young men “Human Teller Machines.”

Within months, revenue at the casino had nearly doubled. But there was a cost, Labine said. More cash, more fear.

Labine says she strongly suspected the $20s flooding across baccarat tables were drug money. Referring to a senior employee, a 1998 journal note reads: “(Name redacted) feels strongly that heroin, not extortion, is the major source of income for the sharks … according to him, deals occur all the time and are visible if you are paying attention. In public washrooms, according to him, on several occasions, (he) was witness to drug deals by the ‘Boys.’”

This observation is consistent with records in B.C. court files, which say police believed the Big Circle Boys preferred to make drug transactions in casinos because if police caught them, they could use casino play as an excuse for large amounts of cash.

Labine says her fear of the Big Circle Boys increased when she saw Richmond casino customers threatened and coming to the baccarat pit with facial bruises.

Things really got rolling in Vancouver when the casino rules changed in 1997. The Chinese gangs pushing heroin and other drugs now had a easy way to launder their money. From here it just took off, high-end cars, luxury homes and condos. They had to spend their money on something, so from the heroin cash laundered through casinos they bought legitimate products.
Yeah, the Chinese gangs/Triads have their feet firmly placed in Vancouver.
any gaming entity is a great way to launder cash...casinos, racetracks,legal sport books..i am surprised it isnt the first automatic go to more frequently...they have machines where you can just pump in 20's and get a cash voucher for whatever yo put in...take it to the cash machine and get 100's...easy
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Feb 24, 2018
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sandeep8g wrote: Its not bad.

Ask those Chinese students how they obtained $50 million for their mansions.

Image
Pretty sure that option is gone for buyers.

Really too bad.

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