Tag Archives: Vancouver Housing

Chinese Fetanyl Kingpins Laundered Over $5BN Through Vancouver Homes Since 2012

https://www.zerohedge.com/sites/default/files/inline-images/Vancouver%20skyline.jpg?itok=Ur85d6IyDowntown Vancouver Skyline

A new “secret” police study has found that Chinese crime networks could have laundered over $1B through Vancouver homes in 2016 alone, and that a surge in the city’s home prices are simultaneously tied to a surge in opioid deaths. 

The report examined over 1,200 luxury real estate purchases in British Columbia’s Lower Mainland during that year, and concluded that over 10% were tied to buyers with criminal records. Crucially 95% of those transactions could be definitively traced by police intelligence back to Chinese crime networks.

While the study only looked at property purchases in 2016, an analysis by Global News suggests the same extended crime network may have laundered about $5-billion in Vancouver-area homes since 2012Fentanyl: Making a Killing

Since 2016 we’ve chronicled the “dark side” behind the Vancouver real estate bubble, which it turns out has long been a bubbling melange of criminal Chinese oligarch “hot money”, desperate to get parked offshore in any piece of real estate, but mostly in British Columbia regardless of price.

A number of investigations have since uncovered extensive links – including money laundering and underground banking – between China’s criminal underworld and British Columbia drug and casino cash and VIPs, as well as their connections to China, Macau and the notorious triads. These investigations have found much of the B.C. real estate bubble can be explained as nothing more than the “layering” and “integration” aspect of a giant money laundering scheme involving billions of dollars of Chinese hot money and the criminals behind it.

On Monday the new bombshell study revealed just how extensive and growing this Chinese underworld racket remains and how it continues to impact average citizens and regular home buyers, as well as fueling the continuing opioid crisis across the US and Canada, which has claimed tens of thousands of lives across North America, including nearly 4,000 Canadians in 2017 alone. The figures are so stunning that what is “known” years after the story first came to light could merely be the tip of the iceberg. 

The study published by Canada’s Global News begins by painting a disturbing scenario that suggests some of Vancouver’s priciest homes are nothing more than a new “Swiss bank account” of sorts providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow from initial criminal transactions overseen for Chinese crime syndicates — all the while fueling Metro Vancouver’s housing affordability crisis.

The ultimate end result of the sophisticated and massive money laundering scheme is that middle-class families have been priced out of the city, per the report:

The stately $17-million mansion owned by a suspected fentanyl importer is at the end of a gated driveway on one of the priciest streets in Shaughnessy, Vancouver’s most exclusive neighborhood.

A block away is a $22-million gabled manor that police have linked to a high-stakes gambler and property developer with suspected ties to the Chinese police services.

Both mansions appear on a list of more than $1-billion worth of Vancouver-area property transactions in 2016 that a confidential police intelligence study has linked to Chinese organized crime.

https://www.zerohedge.com/sites/default/files/inline-images/Vancouver%20properties.jpg?itok=CDpjoivaNine Vancouver properties subject of a prior Globe and Mail investigation linking them to fentanyl laundering. Via The Globe and Mail

Previous investigations had quoted concerned residents describing that: “Vancouver seems to be evolving from a residential city into almost like a lockbox for money… but I have to live among the empty houses. I’m a resident, not just an investor.”

The snapshot that the new police study provides is based on analysis of a sample of about 1,200 high-end sales in 2016. Investigators cross-referenced databases of criminal records and confidential police intelligence with those high-end property records, which revealed the shocking 10% organized crime ties figure. 

But the implications for prior years going all the way back to the early 2000’s and even into the 1990’s, when Canadian police believe the current kingpins of fentanyl  which is the powerful and extremely addictive narcotic added to heroin to increase its potency (said to be 100 times more potent than morphine)  began to dominate Canada’s heroin markets, are equally as startling.

For starters, the report finds, fentanyl-related money laundering which funnels illicit funds through the luxury housing market has been so pervasive that researchers “didn’t have the time or resources to study the over 20,000 transactions”. During the course of these some 20,000 transactions home prices in Vancouver have tripled since 2005

From the new “Fentanyl: Making a Killing” extensive report

https://www.zerohedge.com/sites/default/files/inline-images/Vancouver%20Fentanyl%20crisis%20report.jpg?itok=-QljNhJV

And further illustrating just how extensive the whole scheme remains, there is this bombshell section from the report:

While the study only looked at property purchases in 2016, an analysis by Global News suggests the same extended crime network may have laundered about $5-billion in Vancouver-area homes since 2012.

At the centre of the money laundering ring is a powerful China-based gang called the Big Circle Boys. Its top level “kingpins” are the international drug traffickers who are profiting most from Canada’s deadly fentanyl crisis.

The crime network, according to police intelligence sources, is a fluid coalition of hundreds of wealthy criminals in Metro Vancouver, including gangsters, industrialists, financial fugitives and corrupt officials from China.

The report is so full of specific examples of multi-tens of million dollar homes that are actually money laundering conduits for fentanyl drug kingpins that it puts President Trump’s recent accusations against China for fueling the opioid crisis into fresh perspective.

At that time Trump attempted to lay out the case that Chinese suppliers had been fueling America’s opioid crisis, saying in part “It is outrageous that Poisonous Synthetic Heroin Fentanyl comes pouring into the U.S. Postal System from China.”

However judging by breadth and depth of figures merely from one major North American city (some American cities have been named in other investigations), it appears that Trump’s words actually understated the role of China and Chinese organized crime, of which it appears Beijing authorities have long been only too happy to look the other way while it takes deep roots on the American continent. 

After all we can’t imagine China’s all-pervasive advanced surveillance systems and powerful domestic intelligence apparatus could miss this: “Police say that almost every drug seizure they now make in Vancouver turns up some form of synthetic opioid produced at factories in China,” according to the report.

Source: ZeroHedge

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Fentanyl kings in Canada allegedly linked to powerful Chinese gang, the Big Circle Boys

 

 

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Officials Promise “Dirty Money” Crackdown As Vancouver Housing Market Grinds To A Halt

https://www.zerohedge.com/sites/default/files/inline-images/2018.09.28bc.JPG?itok=Ngo9oTpx

Thanks to an influx of demand from Chinese nationals and other foreigners, Vancouver’s housing market soared in the post-crisis years, with prices more than doubling to levels that were clearly unsustainable, cementing the Pacific Northwest metropolis’ status as the most unaffordable housing market in North America. But the torrid growth ground to a halt earlier this year as home sales plummeted, along with construction of new homes and apartments.

https://www.zerohedge.com/sites/default/files/inline-images/2018.09.28ancouverchart.jpg?itok=JyO4iuTG

The typical single-family home in Vancouver costs more than C$1.5 million ($1.15 million) – roughly 20x the median household income.

In an effort to let some air out of one of the continent’s most egregious property bubbles, British Columbia’s government has announced an unprecedented crackdown on money laundering in Vancouver’s property market in an attempt to stop a housing-market collapse from taking the city’s GDP with it.

The initiative, launched by Attorney General Daid Eby, seeks to create more transparency to expose all the “numbered corporations” (often used as fronts for foreign investors) buying property in Vancouver. The probe will also examine horse-racing and luxury car sales. 

Attorney General David Eby said that his office is launching an independent review into potential money laundering in real estate, horse-racing and luxury car sales. The review comes in response to recommendations from a previous review into money laundering in the province’s casinos. In addition, Finance Minister Carole James has appointed an expert panel to look directly at money laundering in the housing sector. Both probes will be done by March.

“There is good reason to believe the bulk of the cash we saw in casinos is a fraction of the cash generated through illicit activities that may be circulating in British Columbia’s economy,” Eby told reporters Thursday in the capital of Victoria. “We cannot ignore red flags that came out of the casino reviews of connections between individuals bringing bulk cash to casinos, and our real estate market.”

[…]

“Our goal is simple, as you’ve heard: Get dirty money out of our housing market,” James said. “When the real estate market is vulnerable to illicit activity and unethical behavior, people, our communities and our economies suffer. This is something we have to tackle.”

Still, the success of these initiative will be constrained by the fact that they’re only meant to learn the mechanics of how money is laundered via the Vancouver property market, and then make recommendations about how to stop it. Indeed, it’s entirely possible that, by the time anything is actually done, criminals will have changed their strategies or shifted to different markets. Meanwhile, a study by Transparency International found that it’s impossible to identify the owners of nearly half of the most expensive properties in Vancouver.

However, it’s only a matter of ti me before prices begin their dramatic descent as sellers finally capitulate and drop their ask down to the highest bid.

Source: ZeroHedge

 

Vancouver House For Sale: Only 2,099 Bitcoin

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In February 2016 we explained, correctly in retrospect, that the reason behind the unprecedented surge in Vancouver home prices was the seemingly constant flood of “hot Chinese money” desperate to park itself as far away from China’s banking system, and into offshore real-estate. This is how we laid out the stylized sequence of events that culminated with Vancouver home prices surging by over 20%:

  1. Chinese investors smuggled out millions in embezzled cash, hot money or perfectly legal funds, bypassing the $50,000/year limit in legal capital outflows.
  2. They make “all cash” purchases, usually sight unseen, using third parties intermediaries to preserve their anonymity, or directly in person, in cities like Vancouver, New York, London or San Francisco.
  3. The house becomes a new “Swiss bank account”, providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow.
  4. Then the owners disappear, never to be heard from or seen again.

Separately, in mid-2015, when bitcoin was still trading in the low $200s, we also predicted that in an attempt to bypass China’s increasingly more draconian capital controls, Chinese oligarchs and ordinary savers would increasingly turn to what at the time was a largely unregulated medium of exchange: bitcoin.

we would not be surprised to see another push higher in the value of bitcoin: it was earlier this summer when the digital currency, which can bypass capital controls and national borders with the click of a button, surged on Grexit concerns and fears a Drachma return would crush the savings of an entire nation. Since then, BTC has dropped (in no small part as a result of the previously documented “forking” with Bitcoin XT), however if a few hundred million Chinese decide that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decide to invest even a tiny fraction of the $22 trillion in Chinese deposits in bitcoin (whose total market cap at last check was just over $3 billion), sit back and watch as we witness the second coming of the bitcoin bubble, one which could make the previous all time highs in the digital currency, seems like a low print.

With one bitcoin now going for roughly $1,800 – and with the PBOC repeatedly cracking down on all forms of bitcoin cross-border flow – this prediction also turned out to be right.

So putting the two together, at least one enterprising Canadian homeowner has decided to make life for potential Chinese buyers especially easy, and in a posting on the Hong Kong edition of Craigslist, has listed a relatively modest Vancouver house for the price of 2,099 bitcoin.

https://i0.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/05/12/vancouver%20house%20craigs_0.jpg

At today’s exchange rate of US$1,737 for one bitcoin, the US dollar equivalent price is roughly $3.6 million or C$4.9 million. So what does nearly five million Canadian dollars buy enterprising Chinese investors who are willing to pay up for the convenience of bypassing currency conversion into Canadian dollars altogether? This:

https://i2.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/05/12/00E0E_gnzeuLmeD2K_600x450.jpg

https://i2.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/05/12/00000_kM7OIBuDw1h_600x450.jpg

https://i2.wp.com/www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/05/12/00D0D_kC0voEX3eF4_600x450.jpg

Source: ZeroHedge