Lower property developer Bene Group has a registered company with the federal government that makes it possible to engage in currency trading and money transfer.
Called Bene Financial Group Ltd., its office is listed as located in a strip shopping mall on No. 3 Road in Richmond. The only director of Bene Financial is Ming Nan Li, head of the Bene Group, according to B.C.'s corporate register.
But the information is not accurate.
Ming Nan Li was never the owner of Bene Financial Group. Instead, another man ran the business under that company name and used the address in the strip template as a convenience, according to a Bene Group corporate officer.
"It is not owned by ourselves. … Actually (the other man) only used our offices," said Peter Zhang, who identified himself as an assistant at the Bene Group when responding to a number listed with Financial Transactions and Report Analysis Center (Fintrac). A money service business (MSB) is required to register with Fintrac, Canada's financial inspection agency.
A Post Media survey – involving hundreds of pages of court records, business records, and real estate records – shows that two dozen MSBs in Richmond, Vancouver and North Shore are listed with Fintrac located in houses or apartments. Other MSBs are located at law firms, auditors and real estate companies.
Many of them have no public face – at street level or online or through advertising – which would make it difficult for potential customers to find them.
Over Canada, more than 800 MSB manages approximately SEK 39 billion per year in transactions. The Federal Government and the International Anti-Money Laundering Office (FATF) have identified the sector – which includes currency trading, international money transfers, and redemption or sale of money orders and travel controls – as very exposed to money laundering.
Zhang said he hadn't seen the man who actually drove the Bene Financial Group, which he called Wang Bing Xu, and had no contact information for him.
BC. The company register shows that Bene Financial Group was dissolved as a company on June 28, 2016, by the province for failure to submit annual reports. It was almost two years before the company was registered as MSB with Fintrac. The registration expires on January 31, 2021.
Bene Financial could potentially lead to several federal rules, including one that an MSB must file a registration notice within 30 days if it ceases to operate and must notify Fintrac of location and other changes. (Violations of these rules are considered serious and may result in fines up to $ 100,000 under federal laws.)
This finding by Postmedia is among many that raises questions about the examination of MSB in B.C. because increased attention is paid to money laundering in the province and how it is being policed.
In its 2016 review report from Canada, the FATF said: "MSBs are vulnerable to money laundering because they are publicly available and vulnerable to customers in vulnerable businesses or professions and customers operating in local communities".
The B.C .: example of the MSB involved in money laundering includes a $ 200 million wash in the early 2000s run by Tho Ahn Khuc, who ran a currency exchange from his Burnaby home. In 2014, a currency exchange in central Vancouver was at the center of a criminal case where $ 24 million in drug money was washed.
"It just doesn't pass the smell test"
Postmedia's results show that a man arrested in the 2015 violence by the illegal MSB Silver International, who is allegedly washed as much as $ 220 million a year, is the director of a currency exchange in Richmond.
In addition, a West Vancouver man who was listed as the sole director of an MSB driven out of a house was embroiled in a civil suit claiming to have arranged illegal $ million million transfers between China and Canada.
These examples give rise to issues that emphasize the need for greater scrutiny of the MSB, say experts, including why these operations run out of home and why real estate developers or real estate companies run the MSB.
"These MSBs are, in my opinion, an investigation by Fintrac," says Denis Meunier, a former Deputy Assistant Director of Fintrac and former Director General of Criminal Investigations at the Canada Revenue Agency.
Meunier, now a senior adviser to Transparency International in Canada, a non-profit group advocating better corporate transparency, said the Postmedia results also point to the importance of having transparency in good corporate ownership.
"It just doesn't pass the odor test," added Garry Clement, a former RCMP superintendent serving as the National Crime Revenue Manager and now an anti-money laundering consultant.
In response to PostMedia's questions about the MSB in the B.C., Fintrac said it could not comment because federal law prohibits the Agency from disclosing information it has received or information it may have provided to the police or other law enforcement agencies.
"In addition, Fintrac cannot speak with specific cases and it is prohibited to comment on compliance actions that may have been made against a particular reporting entity or in a reporting sector," said Fintrac's spokesman Dino Roberge in a written statement.
MSB owner linked to alleged underground bank
PostMedia's results include a court case that pointed to a money transfer system between China and Canada that seemed to occur outside normal transmission channels that an MSB would use, where money would be transferred directly through banks from one country to another.
I a B.C. The Supreme Court resident of Haibin Liang in Vancouver claims that Zhuo (Tony) Huang, who led the MSB Ronet Current Financial Group Inc. between 2015 and 2018, entered into an agreement where Liang would deposit Chinese currency into bank accounts in China owned by individuals directed by individuals by Huang. Huang would in turn deposit the same value of currency – minus a service fee – on a Canadian bank account designated by Liang.
Such transactions, tagged underground banking by police and regulators around the world, are often used to get money out of China, which has an annual limit of $ 50,000 on how much individuals can move out of the country. Transactions like these would violate Chinese laws and possibly Canadian rules, requiring cash transaction reporting over $ 10,000.
According to court documents, about $ 3 million is deposited in Chinese currency between October and December 2016 by Liang in the accounts of eight different Chinese banks that included China Merchants Bank, Shenzhen Kejiyuan branch and Agricultural Bank of China, the Jinhu branch.
The first $ 2 million in matching deposits was made in Canada by Huang but only a portion of the remaining $ 1 million is deposited under court applications.
Huang denied claims, left an answer saying he did not contract with Liang and did not receive or paid any money to Liang.
Huang's answer added that if the court found there was an agreement that, since Liang intended to use the exchange to circumvent the laws of China and Canada, Liang has only to blame and the court should not hear the suit. The last application was in September 2018.
Huang, who ran the Ronet Current Financial Group from a $ 5.9 million West Vancouver home owned by his mother, could not be reached for comment.
Several calls to the number specified for Ronet Current Financial with Fintrac – the same number listed for Huang online as realtor for LeHomes – went unanswered. Huang could not be reached via LeHomes.
In a written response to Postmedia's case case, Fintrac's spokesman Roberge said depending on the amount of transactions in Canada, MSB may have money laundering laws, such as client identification, registration, and reporting, but that Fintrac could not comment on any specific conditions regarding Ronet Current Financial .
Another post media result revealed that a manager of a Richmond MSB had been arrested as part of the RCMP's E-Pirate investigation to the underground bank Silver International, considered as B.C.'s largest ever money laundering.
In 2015, Guo (Claude) Liang Wang was arrested during a rescue at Silver International in Richmond and came to the deal with an empty suitcase. According to court records, the RCMP monitoring had observed that he left the same site with a suitcase earlier and thought he was a courier. Wang was not charged.
According to B.C. The corporate register, Wang is one of the directors of HKTK Investment Ltd., registered as currency trading with Fintrac.
Called the phone, Wang said he had never been questioned by Fintrac or by the police about HKTK in connection with his arrest at Silver International.
Wang said he couldn't remember why he went to Silver International. "I think someone says I'll go there," Wang said. "I have nothing on me, right. I have nothing. I just go there and I was just arrested. It's all."
He had no explanation why he brought in a suitcase.
Wang said that HKTK, located in a shopping mall at No. 3 Road in Richmond and called the HKTK Express Exchange, deals only in currency exchange and not international transfers. "We only make small quantities," he said.
A visit to the currency exchange in the shopping center during opening hours in the middle of March found the office shuttered and unlocked.
The RCMP did not respond to a request for comment and Fintrac said it was forbidden to comment on specific cases.
No advertising or online presence
Another of the two dozen MSBs in houses and apartments is Anxin Real Estate, registered with Fintrac as a money transfer and foreign exchange trading that a house in Kerrisdale. Information about the property company's website seems to be outdated, from 2016.
Contacted on the telephone number listed with Fintrac, a man said that the MSB business ceased to function last year and had been linked to the real estate industry. An MSB that has ceased to function must register with Fintrac, but Anxin's registration is still active on the Fintrac registry, with an expiration date of March 31, 2020.
Asked how the MSB and the real estate company were affiliated, the man who would not identify himself said he was not "really qualified to answer it" and was "not authorized to talk to any reporter. "
Calvin Bui and Partners Inc., registered as a money transfer with Fintrac, are also busy at a Vancouver home. Bui, who also has a company that is online as an accountant / accountant, said that MSB is no longer active. However, it is listed as active on the Fintrac register, with the expiration date of September 30, 2020.
Bui told Postmedia that he had previously helped some friends and family, but refused to say anything more.
Dragon Wealth Holdings, a value-sharing business that has no obvious advertising or online presence, has sites listed at 25th floor in a Coal Harbor condo and at a home in Kerrisdale.
A man who answered one of the numbers listed with Fintrac for the business said it was the wrong number for Dragon Wealth and refused to say more.
Messages left for Crystal Xu, which is the only director of the Dragon Wealth according to the business register and who have been involved in remodeling houses on the west side, on the second Fintrac listed phone number, went unanswered.
German report recommended licensing rules for MSBs
MSB was identified as a concern in an independent report on money laundering commissioned by B.C. the government last year.
Peter German, the report's author and a former Commissioner for the RCMP, last summer recommended that the province consider a licensing scheme for MSB similar to the Metal Dealers and Recyclers Act. This document requires metallurgists to report suspicious stolen items and gives the province's authority to inspect and issue fines up to $ 50,000 for corporations and $ 5,000 for individuals.
Licensing of MSB is common at state level in the United States, but Quebec is the only province to adopt it in Canada.
So far, it is unknown what would be required in B.C. to become licensed
B.C. The law firm said the work has begun on about half of Germany's 48 recommendations, which were released in June 2018, but would not say what is the status of the MSB recommendation.
Meunier, former deputy head of Fintrac, said he would like to see all provinces consider adopting a licensing scheme similar to Quebec's.
Unlike the Metal Dealers and Recyclers Act as German, B.C. consider for the licensing of MSBs, the Quebec Act gives the province wider powers, including the authority to train those wishing to create the MSB.
The application procedure means that the applicant provides Quebec's securities regulator with a significant amount of information about the proposed MSB, including its legal structure, officials, board members, partners and branch managers. The MSB and its owners must also comply with the eligibility conditions and obtain a security decision from the Quebec police force, Sûreté du Québec.