Cullen commission cites need for key czar position to curb B.C. money laundering that totals 'billions'
"Money laundering is an affront to law-abiding citizens who earn their money honestly and pay their fair share of the costs of living in the community." — Austin Cullen
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Former B.C. Supreme Court Justice Austin Cullen has made 101 recommendations to combat rampant money laundering in the province, from expanding the mandate of the civil forfeiture office to creating a new anti-money-laundering czar “who will provide strategic oversight of the provincial response to money laundering.”
In his more than 1,800-page report, Cullen said “the public was rightfully disturbed by the prospect of criminals laundering their cash and parking their illicit proceeds in this province.”
He said it’s impossible to know just how much criminal cash is laundered in B.C. every year, but that some estimates put the amount “in the billions.”
“Money laundering is a significant problem deserving of serious attention from government, law enforcement and regulators. An enormous volume of illicit funds is laundered through the British Columbia economy every year and that activity has a significant impact on the citizens of this province,” Cullen said.
“Money laundering has at its origin, crime that destroys communities, such as drug trafficking, human trafficking and fraud. These crimes victimize the most vulnerable members of society. Money laundering is an affront to law-abiding citizens who earn their money honestly and pay their fair share of the costs of living in the community.”
Cullen also recommended the creation of “a dedicated provincial money laundering intelligence and investigation unit with a robust intelligence division.”
He said the unit should be operated by the Combined Forces Special Enforcement Unit as opposed to the RCMP so that the province can maintain more control over it.
And he said the intelligence gathered by the special unit would make up for the ineffectiveness of FINTRAC — the federal agency responsible for analyzing money laundering threats and passing details along to police to investigate.
“Law enforcement bodies in British Columbia cannot rely on FINTRAC to produce timely, useful intelligence about money laundering activity that they can put into action,” he said.
Attorney General David Eby welcomed the recommendations and thanked Cullen and his team for their work, which involved 133 days of hearings, testimony from 199 witnesses and thousands of hours of investigation, research and interviews.
“Our government will evaluate these new recommendations from the commissioner and co-ordinate them with the work government already has underway, in particular in relation to housing and real estate,” Eby said.
“This report is important for the federal government, too. It contains significant and challenging findings and calls to action for our federal government. I hope and expect that the new federal minister with responsibility for this file will join with us in addressing this important shared challenge.”
Media reports of drug traffickers and organized criminals laundering money through B.C. casinos was one of the main reasons the Cullen Commission was established by Premier John Horgan in May 2019.
“The illicit cash used by these casino patrons played a central role in fuelling extraordinary growth in large and suspicious transactions in Lower Mainland casinos,” Cullen’s report said.
“In 2014 alone, British Columbia casinos accepted nearly $1.2 billion in cash transactions of $10,000 or more, including 1,881 individual cash buy-ins of $100,000 or more — an average of more than five per day.”
Earlier recommendations made by Peter German and already implemented “significantly curtailed the prevalence of illicit cash in B.C. casinos,” Cullen said, adding that “there must be continued vigilance and further improvement.”
Cullen recommended lowering the threshold for requiring proof from casino patrons of their source of funds to $3,000, as well as maintaining current limits on the amount that can be paid out to patrons via conveyance cheques.
He also recommended new regulations and anti-money-laundering education for lawyers, accountants, mortgage brokers and others involved in real estate transactions, including all employees of developers.
And he said the B.C. Civil Forfeiture Office should be funded directly by government, instead of its current self-funded model.
“The Civil Forfeiture Office should be encouraged to pursue cases that have the greatest impact on organized crime groups, regardless of whether those cases are ‘commercially viable,’” Cullen said.
“Unfortunately, the number and value of unlawfully obtained assets seized through the asset forfeiture system in British Columbia is shockingly low.”
Cullen fielded several media questions about his conclusion that there was no corruption among the previous Liberal government ministers responsible for overseeing casinos.
“Despite the failure of these elected officials to take steps sufficient to resolve the extensive money laundering occurring in the industry for which they were responsible, there is no basis to conclude that any engaged in any form of corruption related to the gaming industry or the commission’s mandate more generally,” Cullen said. “While some could have done more, there is no evidence that any of the failures was motivated by corruption.”
Eby said afterward that politicians should have a higher bar than simply not being corrupt.
“As a politician, I wouldn’t be satisfied with the sash awarded by that commissioner that says ‘not corrupt.’ I hold myself to a higher standard,” he said. “They should have to explain why they didn’t take the necessary steps to combat money laundering.”
But Liberal MLA Mike de Jong, one of the former ministers mentioned, said later Wednesday that he was gratified to see Cullen acknowledge that his government had taken action.
“A great deal was done. And it had an impact,” he said.
“I have read, particularly with respect to gaming and casino operations, where he believes more could have been done or more could have been done sooner.”
He said he appreciated that Cullen was “unequivocal and clear that throughout his evidence gathering process, and in his report, there is no evidence because there was at no time corrupt practices, collusion, any deliberate attempt to facilitate money laundering in this province by anyone within the previous government.”
Cullen also concluded that while money laundering has been done through real estate purchases, it’s “not the cause of housing unaffordability” in B.C.
“While the impact of money laundering and anti–money laundering measures on real estate prices is something that would benefit from further study, I am unable to conclude that money laundering is a significant cause of housing unaffordability,” he said.
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