My Authors
Read all threads
Back at the #cullencommission today. Beginning where we left off with banks. Prof. Stephen Schneider says B.C. bank branches have been particularly vulnerable to money laundering related to the illegal pot trade and capital flight from China.
cbc.ca/news/canada/br…
Livestream is here if you want to follow along: cullencommission.ca/webcast-live/
Globe and Mail getting lots of props this morning for their reporting.

Schneider is talking about the Vancouver model, and how drug money was used to fund private mortgages, helping fuel the out-of-control real estate market.
Global, Postmedia and my colleagues at CBC are all getting mentions as Schneider discusses money being laundered through B.C. casinos. Seems like the bulk of information on this topic comes from media reports.
Schneider is discussing the use of financial markets to launder money. The examples he's giving are from Ontario, though this seems like the perfect moment to discuss the dirty history of the Vancouver Stock Exchange.

vancouverpolicemuseum.ca/vse_parti/
Now we're talking about the use of massive multiplayer online games to launder money through in-game currencies. Schneider admits that he doesn't really understand these games because "I'm from the Tetris generation."
Some discussion of lawyers' involvement in money laundering in B.C. Schneider says most participate unwittingly, but others have willingly facilitated it.

Lawyers tend to be involved mainly when there's a real estate deal, he says.
Schneider is explaining how informal value transfer businesses helped facilitate the Vancouver model of money laundering as well as drug trafficking and terrorism.

This allows someone to pay $1M to a money service business in China, withdraw $1M from associated biz in Canada
Schneider just laid out the elements of the Vancouver model of money laundering, and is arguing that one company, Silver International, was the "glue" that held the model together.

"You wouldn’t have the Vancouver model without Silver International and their directors."
But he acknowledges that this perception is based in part on an over-reliance on news media in his literature review.

Of course, criminal charges were stayed against Silver International. cbc.ca/news/canada/br…
"While I’m generally skeptical of the hysteria around the effects of money laundering ... [it likely] did have a negative impact on the housing market in Vancouver," Schneider says. #vanre
Schneider says he believes there's some effect on the illegal drug trade and real estate, but does not buy into arguments that money laundering has impacted provincial or national economies.

Says these narratives are driven by agencies and police with "clear vested interest."
Getting interesting and possibly controversial now. Schneider says focus on targeting proceeds of crime is largely driven by U.S. agencies.

"I’ve seen it firsthand, the attempt to kind of inflate the scope of the problem" of money laundering.
He's skeptical in general of approaches targeting proceeds of crime. (Doesn't mention any programs specifically, but I'm thinking civil forfeiture likely fits the bill.)

"Does targeting proceeds of crime really do any harm to these criminal organizations?"
And while Schneider says B.C.'s expert panel did a valiant job of trying to estimate the impact of money laundering on the real estate market, it's next to impossible to build a rigorous model for this stuff because all the figures you're feeding into are best guesses.
On B.C.'s vulnerability to money laundering, Schneider says there are factors that make the province attractive, but they don't explain why the Vancouver model happened.

"We’ve never seen anything like this in Canada and you probably won’t see anything like this any time soon."
But money laundering isn't going anywhere, Schneider says.

"No matter what you do to combat the bad guys, they’re going to find a way to get around that.... Money laundering and organized crime is extremely resilient. As long as you have demand, you’re going to have supply."
Counsel for Great Canadian Gaming critiquing Schneider's reliance on media reports for his lit review. Says journalists have a number of "frailties" including the fact that they're not scholars.

Schneider says that doesn't necessarily undermine the truth of news reporting.
Schneider acknowledges that media reports may be wrong, but so can scholarly articles.
Great Canadian lawyer Mark L. Skwarok: "I would suggest that newspaper articles aren’t evidence of anything except the reporter’s opinion."

Schneider laughs. "No, I wouldn't agree with that."
Skwarok takes issue with Schneider citing a Vancouver Sun article about money laundering in casinos, calls it "a tenuous form of evidence"

Schneider: "I don’t think we need to engage in bashing the news media. The Vancouver Sun has dedicated reporters investigating these things"
Here's the article by @scoopercooper, in case you're interested: vancouversun.com/news/local-new…
Skwarok, for the record: "I’m not bashing the media at all. I’m questioning your reliance on them."
Another brief technical issue. Commissioner Austin Cullen said he couldn't hear what was being said and needed a moment to troubleshoot.

Returned in ~30 secs. "I’ve remedied this by pressing the on button."
Counsel for ex-BCLC vice-president Robert Kroeker with a more nuanced media critique:

"It’s possible because of the need to have to rely on media reports … that there is a risk in fact of information in fact getting repeated and bolstered even though it may be erroneous."
Schneider agrees that's a possibility.
And we're done for the day, after a great deal of skepticism from counsel for gambling industry and regulators on the idea that casinos are a major tool for money launderers.
And here's today's story. cbc.ca/news/canada/br…
Missing some Tweet in this thread? You can try to force a refresh.

Enjoying this thread?

Keep Current with Bethany Lindsay

Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!