Canada sucks at fighting financial crime. I don’t think a single person who even remotely knows what they’re talking about could disagree with that statement. It’s just a fact of life: we invented the offshore tax haven, we’re the home of Conrad Black, and when the little baby narcs learn to fight money laundering at narc school, they learn the “Vancouver Model.”
I think it’s a uniquely Canadian experience to actually feel a pang of pride when one of your cities is the breeding ground for such a revolutionary technique of money laundering that they needed to borrow its name, but I kind of do — at least we’re being mentioned, right? To be fair though, we’re actually a pretty significant world leader in the industry of being shit at fighting financial crime, so we kinda deserve it. It’s like us and HSBC, basically. Not the coziest bunk mate.
Anyway, that industry is worth about a billion dollars a year in B.C. alone, according to the feds, but that money isn’t stimulating the economy or going towards anything useful — it’s killing us. Under the Vancouver Model, criminal enterprises are able to launder proceeds from deadly fentanyl sales through provincial casinos freely and easily, mostly because nobody bothered to stop them.
Chinatown in Vancouver
Here’s a breakdown of the model. In China, there’s a law that prevents citizens from moving more than $50K out of the country. Travelers get around this by transferring larger amounts of cash to criminal accounts within China, and then hopping across the Pacific, where affiliates meet them with equivalent Canadian monies. The dollars, which are often proceeds from Chinese organized crime (usually Triad) shit like drug sales, extortion, loan sharking, and illegal gambling are handed off in grocery bags filled with twenties, destined for casinos like the River Rock in Richmond.
Now, this is where the Vancouver Model gets embarrassing, because it really shouldn’t work. At this point, the Chinese traveller takes their cartoonish sacks of cash to the casino, dumps it on the desk and is given chips in return. The visitor hangs out for a while, probably gambles a bit, and then cashes out his millions of dollars in chips for a sparkly and freshly laundered new cashier’s check. Behind the scenes, however, casino employees are busy filling out paperwork detailing the extremely sus interaction they just had involving a couple million dollars worth of loose bills.
Casinos are supposed to report suspicious incidents like this to FINTRAC, the financial intelligence agency responsible for dealing with money laundering and terrorist financing and which, I’ve become convinced over the course of my research, is staffed entirely by ghosts. For about a decade, while the Vancouver Model was in full swing behind the backs of law enforcement, BC casinos sent off one report of these “bulk cash” transactions after another, but because of either apathy, incompetence, a lack of interest, a lack of funding, or some combination, the reports effectively ended up in the void.
The successfully laundered money is meanwhile put into real estate investments against which criminals could secure loans as well as legitimize their business in Canada, or it’s put back into acquiring opioid starter chemicals and cocaine shipments and the like. The Vancouver model is impressive both because of the complexity of its scope, from Chinese high rollers, to casinos, to the real estate industry, as well as because of the stunning failure to see patterns earlier.
It is a good thing that we’re noticing them now, though. The Vancouver Model scandal has drawn national and international attention to the glaring hole not only in Canada’s financial crime problem, but in the global anti-money laundering (AML) effort led by G7 countries. The Financial Action Task Force, a G7 initiative, released a report highlighting the billion dollar weakness in B.C. and according to casino.org, the Expert Panel on Money Laundering in B.C. Real Estate, which was convened in the wake of the scandal “believes around $7 billion was laundered through the province’s casinos and real-estate market in 2018 due to weak regulations and inadequate oversight, but as much as $47 billion was washed through the entire country during the same period.”
By the way, it’s important to understand that there is very little academic literature on the study of money laundering so it’s quite possible that I’m just saying numbers at this point. But the numbers are fairly believable. Especially when you consider that in other parts of the country, casino money laundering isn’t even as complicated as in B.C. In Quebec, the province has recently opened an independent investigation into allegations that provincial casinos offered so-called loyalty programs and awarded special privileges to prominent mob bosses.
Montreal, one of the most historically volatile crime cities in the continent
These are not difficult allegations to reconcile. Quebec and Eastern Ontario is gangland. Brutal territorial struggles in the disgustingly deregulated Ontario tow truck industry have turned increasingly bloody (you heard me, tow trucks) in recent years and has corrupted several police departments. And across the river, the Wolfpack Alliance, made up of I think some Hells Angels, but mostly young multi-ethnic associates of the late Vito Rizzuto, Montreal’s Tefflon Don, are competing in a brutal struggle against the vacuum left by Rizzuto’s untimely demise (ostensibly from natural causes a year after he was released from jail and began executing a terrifying revenge spree across the underworld) and pressure from the powerful Ontario-based ‘Ndranghetta.
In fact, in mid 2019, nine alleged ‘Ndranghetta crime family members were arrested for, you guessed it, laundering more than $70 million through Ontarian casinos, as well as operating illegal casinos, a loan-sharking enterprise, and doing some extortion. In other words, the exact type of shit the Triads were pulling in B.C. The only difference is that the ‘Ndranghettas don’t have help from their homeland in Italy — probably because the Ontario clan is so powerful, it’s one of the few organizations that can actually call shots in Europe.
All that and we haven’t even gotten to online gambling. It is illegal to operate an online casino in Canada without a license, but there are actually two states that can offer those licenses. It would have been three had the province of PEI’s plan to set up servers on Mi'kmaq Confederacy land not been plagued by its own gossipy, inbred small-town political culture and died to lawsuits and optics. Sorry, PEI, you’re pretty but god you’re dumb.
Drone shot of Kahnawake
Anyway, the Mi’kmaq proposal was modeled after the Kahnawake Mohawk Nation of modern Quebec. The Kahnawake Gaming Commission has built itself into a major player in the online gaming industry because it began selling licenses for online casinos and hosting the servers on its land, emphasizing its sovereignty rights whenever the white man RCMP comes a’knockin. It’s a strategy that works. Even as evidence of the involvement of organized crime in these ventures has surfaced over the years, it’s just not worth it for the RCMP to kick up shit in what amounts to a completely different country. The Kahnawake Nation even issues its own passports, okay, these are serious people, and it’s honestly super sick.
But here’s the underlying theme: Name a casino, and it's probably been used to launder money for the mob. And the mob probably used that money to import drugs and opioids. And if those drugs and opioids don’t kill anybody, it’d be a fucking miracle. The reports say billions of dollars are washed in Canadian casinos in every province, and while I just talked about the gangs, this includes money for terrorist groups and Iranian militants too.
The opioid crisis is a massive public health emergency, one we're going to have to get back to dealing with after we've beaten the one that kills old white people first. We can't keep pretending like financial crime doesn't matter. I know that the politicians want a job on Bay street when they get out of office, but they have to grow some balls, put teeth back into FINTRAC or whoever is gonna actually do something and stop pretending this shit is a victimless crime only committed by lawyers they went to college with. It's a war zone on the streets. In the Soo, Hamilton, Montreal, Vancouver, even fucking Vaughan. Okay? Vaughan is in danger, white people. Are you listening? You have to care now.