International students and offshore banking flagged in Canadian real estate money laundering

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In August 2012, a 19-year-old student from Guangdong arrived in Montreal from the Dominican Republic with $23,800 in euros and US dollars in his bag. Four months later, Zhang Guancun purchased an 8,500-square-foot mansion in Coquitlam, BC for $2.1 million.

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This was only one of Zhang’s multi-million dollar transactions while attending Coquitlam College. From about 2012 to 2015, Zhang would funnel at least $33.75 million in electronic funds and cash through Canadian and Hong Kong bank accounts.

However, as it turned out, the Canadian Border Service Agency and Canada’s anti-money laundering watchdog Fintrack had been monitoring Zhang’s activities for a long time. He also saw his parents. While living in Markham, Ont., they were wanted for allegedly defrauding 60,000 investors of about $200 million into a pyramid scheme in China, according to filings in a federal court case involving a refugee claim by the parents.

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Filings from CBSA and Fintrac, whose allegations were not ruled by the court, reveal details of the complex investigation. Zhang, now 28, successfully fought the deportation case based on CBSA’s allegations that he was involved in money laundering schemes and international organized crime.

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“Zhang’s amount of money in receiving and transferring wire transfers is truly astonishing,” said an October 2015 forensic accounting report filed in court in the CBSA case.

The more than 600 pages in the CBSA filing focused mostly on related cases against Zhang and his parents, Wang Zhenhua and Yan Chungjiang. The couple arrived in Canada six months after Zhang landed in Vancouver, and immediately, according to FinTrac’s records filed in federal court proceedings, they appeared to be involved in detailed stages of money laundering using real estate, shell companies and foreign nationals.

“The following activity raises red flags for layering (a type of money laundering) and potential tax evasion because a high volume of wire transfers were received from a foreign jurisdiction and from various individuals,” said a FinTrac report on Wang and Yan has gone.

CBSA and Fintrack also found it suspicious that Yan Chungjiang and Wang Zhenhua – who also went by the Dominican name of “Antonio” – used multiple aliases.

The CBSA files name dozens of people from China, Canadian law firms, a prominent federal Liberal Party organizer and even a Dominican Republic official in the country’s visa renewal department. They outline a broader concern of the flight of capital from China and covert offshore banking routes through Hong Kong and the Caribbean tax havens, which allow corruption suspects to sense their profits abroad, buy passports of convenience and in Canadian real estate. Allows you to hide dirty money.

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The CBSA files provide a rare glimpse into an opaque business model increasingly cited in Canadian real estate exams, in which relatives use foreign students as fronts to funnel money into condos and mansions.

Evidence in BC’s current investigation of money laundering, the Cullen Commission, claims that possession of a “student” is often used to purchase luxury real estate in BC. Hearing in Vancouver – was transferred At least $114 million From a Chinese province to British Columbia with links to organized crime via Hong Kong currency exchange.

The man and members of his family—whose identities were edited out in Cullen Commission documents—purchased at least $30 million worth of B.C. property, and the corruption suspect’s daughter bought a $14 million Vancouver mansion, the land that Lists her occupation of the title as “Student”. ,

A leaked report from the Bank of China in June 2008 cited by the Cullen Commission draws the same conclusion. A study on “How Chinese Corruptors Move Property Outside China” suggests that criminals ask relatives, especially their children, to study or work in the places where they live. They also use students to buy “real estate,” including homes.

(Critics have emphasized corruption from Chinese state-owned entities and that regulators should sometimes be viewed with caution, as the Chinese state often uses its justice system for political purposes.)

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Anti-corruption watchdog Transparency International Canada has studied luxury real estate trends in Vancouver, and found that “student” buyers were a significant concern. Executive Director James Cohen, who scanned some of the Guancun Zhang case files obtained by Granthshala News, said, “This is a case study that points to the model we have been red-flagging for some time.”

Money trail begins near Beijing

In February 2011, from their office in Tianjin, a port city near Beijing, Zhang’s parents, Wang Zhenhua and Yan Chungxiang, started an investment and consulting company, Yingxin Equity Investments, and began raising funds.

But within months an investor complained to the police, according to a summary of a case from China’s Public Security Bureau (PSB), filed by CBSA in federal court proceedings, and in September 2011, police began investigating suspicions. Turned out that Yingxin was a pyramid scheme. A month later, Yan traveled from Shenzhen to Hong Kong. And in December 2011, police arrested Wang Zhenhua on charges that he “defrauded” thousands of Chinese citizens into investing in Yingxin Equity.

Wang, a tall man who was described as “fat” in the PSB report, was released on bail in January 2012, and traveled to Hong Kong. It was the first move by Wang, who has been accused in an Interpol red notice of allegedly “escape” Canada.

In April 2012, his son landed at Vancouver Airport, presenting an international student visa. He studied briefly at a Catholic high school in New Jersey, and was then drafted to attend Coquitlam College. In this suburb east of Vancouver, he bought a hillside mansion—with six bedrooms and seven bathrooms—for more than $2 million.

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And in the space of about 14 weeks shortly after Zhang landed, the student received at least $10.2 million from companies controlled by his parents in Singapore and Hong Kong. His parents will soon follow him to Canada.

Federal court records indicate that the couple arrived in the Dominican Republic in September 2012, entering the Dominican Republic with a visa issued by the Canadian Embassy. Back in this month…

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