
How Vancouver Became a Money Laundering Paradise [audio] - dsr12
http://www.canadalandshow.com/podcast/how-vancouver-became-a-money-laundering-paradise/
======
raverbashing
Students can get a mortgage _without proof of income_
[https://www.theglobeandmail.com/real-
estate/vancouver/canadi...](https://www.theglobeandmail.com/real-
estate/vancouver/canadian-banks-mortgage-guidelines-favour-foreign-home-
buyers/article31869946/)

I can't imagine it can get more blatant than that

~~~
seanmcdirmid
Typically, the problem is that they have no way of verifying the person's
income if they come from abroad. The only other option is not to give them
loans at all even if they put up a high down payment.

On other hand, this is such a double standard. In China, I couldn't even get a
credit card because I don't have a Chinese ID number even though I had a job
for 9 years + lots of money in their bank.

~~~
raverbashing
It's funny how banks are liberal to give Million dollars loans to someone who
has no "official" income. Sounds like there might be a bubble there.

> The only other option is not to give them loans at all even if they put up a
> high down payment.

Yeah, I don't see the problem with this.

~~~
seanmcdirmid
You see a problem with that, the banks might not given their risk models and a
chance to make money on the loan. They have shown that they generally as good
credit risks, it’s just that they have no idea where their money is coming
from (a legal/moral problem vs. a business one).

~~~
charlesdm
Should banks care? If you put up $300k on a $1m property (meaning a $700k
loan), and it gets foreclosed, then the bank will recover all of their money.
They shouldn't care, as they're in the clear risk wise.

~~~
tareqak
Banks are usually subject to anti-money-laundering regulations. If they aren't
doing due diligence knowing who their customers are, then they open themselves
up to risk from the government.

~~~
eigenvector
The problem is Canada has very weak AML rules to begin with, and even weaker
capacity to investigate and prosecute violations of those rules successfully.

Canada doesn't really have a specialized national police force - the RCMP's
primary function is to be beat cops in rural areas of the country - and it has
no equivalent of the SEC (the Supreme Court ruled the federal government
doesn't have the authority to set one up). So the highly specialized
capabilities needed to investigate trans-national white-collar crime just
isn't there. It's hard to take an agency that primarily writes traffic tickets
in Yellowknife and task it with tracing sophisticated international money
laundering.

~~~
propter_hoc
This is not correct. AML/KYC regulations are just as strict in Canada as in
the USA - they have to be, because our financial systems are so intertwined.
Furthermore, it is not the job of the RCMP (or of any of the provincial
securities regulators) to oversee these issues; there is a special entity
called FINTRAC ([http://www.fintrac-canafe.gc.ca/intro-
eng.asp](http://www.fintrac-canafe.gc.ca/intro-eng.asp)) that does this, and
believe me they are a deadly serious organization.

(I used to be chief compliance officer and "ultimate designated person" of a
registered dealer.)

------
wjn0
"Intelligence" is an interesting (fictional) TV show that looks at the links
between drugs, financial crime, Canadian-US relations, and the intelligence
community in Vancouver. Supposedly was cancelled at the request of the Harper
government for hitting too close to home re: water rights.

~~~
freshhawk
It was definitely cancelled because the CBC was already under fire from Harper
and it was a show that featured a lot of Harper style corruption. The CBC also
didn't promote it or put it up for rewards during the time it ran.

This was during the era when all kinds of academics were being followed,
threatened and censored and climate research was de-funded and censored.
Harper was also publicly threatening CBC funding.

------
otoburb
Had a bit of a shock since one of those "Vancouver specials"[1] including the
neighboring houses looked just like our old house, but thankfully the timeline
doesn't match up at all. I'm unfortunately not surprised that this happens in
the city.

[1]
[https://en.wikipedia.org/wiki/Vancouver_Special](https://en.wikipedia.org/wiki/Vancouver_Special)

------
msie
"Money laundering paradise" is a bit much. There's problem with reporting
about this topic where the narrative is more important than the facts. The
text on the page reads: "That money may be fuelling the city's housing crisis
and opiate epidemic." I don't believe that tightening up money laundering at
the casinos is going to solve the real estate problem or the opioid epidemic
but that's what the reporters want you to believe or they believe it
themselves.

~~~
woolvalley
If you reduce the demand part of the curve, the price goes down. If people
feel like they have a chance of a decent life, because housing is more
affordable they are less likely to use opioids. There is a reason why the
epidemic is in the poor areas of america.

~~~
vageli
> If you reduce the demand part of the curve, the price goes down. If people
> feel like they have a chance of a decent life, because housing is more
> affordable they are less likely to use opioids. There is a reason why the
> epidemic is in the poor areas of america.

It's not just the poor areas of America that are suffering from opioid abuse.
[0]

[0]:
[https://www.nj.com/data/2018/04/nj_on_record_shattering_pace...](https://www.nj.com/data/2018/04/nj_on_record_shattering_pace_for_drug_deaths_in_20.html)

------
andyman1080
The link is dead

~~~
brianskarda
Found a podcast redistributer that has it
[https://player.fm/series/commons/corruption-2-how-
vancouver-...](https://player.fm/series/commons/corruption-2-how-vancouver-
became-a-money-laundering-paradise)

------
seibelj
One paradox of crypto currency is that people attack it for assisting money
laundering, when the current financial and regulatory system is so enormously
effective at accomplishing that task.

------
api
I'm starting to have this odd thought that its time for a softer harm
reduction approach regarding undesirable forms of financial activity: dodgy
investment schemes, gambling, even money laundering.

Like drugs prohibition doesn't seem to work. It pushes these activities
further into the shadows and generates deeper and less obvious forms of
corruption. It also seems to drive socially harmful manifestations like the
use of residential property as a money dump.

Maybe we could have regulated unregulated financial arenas with appropriate
disclaimers and some degree of KYC to prevent the absolute worst use cases?

~~~
sandworm101
This isnt addiction. There is no disease here. This is money laundering. This
is conspiracy to hide criminal activity. If we harm-reduce we should harm-
reduce the underlying crime, not the conspiracy to launder its profits.

This isnt about homeless drug addicts with few choices in life, people that
need protection. Money laundering, by definition, is done by people with
money, by people with every choise in the world.

~~~
api
Gambling us addictive and seems hard wired into our nature. Quite a bit of
financial activity is basically gambling.

Another huge category is flight capital from authoritarian countries.

Finally there is a tie in with drugs here. A harm reduction approach with
drugs would drastically reduce the amount of black money looking for a way to
be laundered.

~~~
sonnyblarney
"A harm reduction approach with drugs would drastically reduce"

NO. Harm reduction in Vacouver at INSITE has basically done nothing. The area
around the clinic is a thriving cesspool, worse than it ever was.

The data used to validate 'harm reduction' doesn't even help them: they talk
about 'avoided deaths form overdose' as though someone od'ing in an alley
would have died fro their od and not had access to ambulances.

It's not really that much more dangerous to shoot up 'in an alley' than in a
clinic, surprisingly - you'll eventually have access to an ambulance either
way and most OD's are not 'instant death' anyhow.

It's the practice/behaviour that kills, the OD is the instance.

The most obvious benefit is that users can get access to clean up programs
etc. but there doesn't seem to be evidence that is materially working.

Vancouver has an entire industry of drug related 'harm reduction' approaches -
and yet, the problems continue to thrive. It would seem those policies haven't
made a dent, and there might be better ways to spend that money to solve the
problem.

~~~
Scoundreller
> NO. Harm reduction in Vacouver at INSITE has basically done nothing. The
> area around the clinic is a thriving cesspool, worse than it ever was.

Expecting one program at one location to stop the entire problem is expecting
a lot. The real question that needs to be answered is: Is it better to have
the program or not? Other than space and a few staff, it can't be expensive to
operate, especially when scaled out.

> The most obvious benefit is that users can get access to clean up programs
> etc. but there doesn't seem to be evidence that is materially working.

Indeed, the OnSite program is available in the same location. What better
place to reach users than a program they'll come to everyday.

There's plenty of evidence that opiate dependence treatment works, and is
cost-effective: reduced HIV infections (it's not necessarily the opiates
themselves that kill you), reduced property crime, reduced deaths from
overdose.

> Vancouver has an entire industry of drug related 'harm reduction' approaches
> - and yet, the problems continue to thrive. It would seem those policies
> haven't made a dent, and there might be better ways to spend that money to
> solve the problem.

But would the problem be worse without the current programs?

"We've spent all this money on health care and people are still dying,
shutdown the hospitals!"

Anyways, I'd argue any worsening is triggered by the new availability of
potent and cheap opioids that people can't dilute properly.

~~~
sonnyblarney
"Expecting one program at one location to stop the entire problem is expecting
a lot. "

Nobody is expecting insite to 'solve the problem'.

But - it has to provide some material result - and it does not.

Moreover, there are a flurry of such programs in the neighbourhood, and entire
'self harm industry' of services etc. - and they don't seem to be working.

"There's plenty of evidence that opiate dependence treatment works"

Not arguing with that. The point is, 'insite' doesn't seem to be effectively
doing that given the costs - and the negative attribute of
supporting/normalizing drug activity.

"But would the problem be worse without the current programs?"

Time for a different approach.

The absolute worst part of the 'soft on drugs' approach is that police aren't
willing to do go after people doing bad stuff right in the open.

That part of Vancouver is an open-air drug bazar and it has to stop.

While it may be rational to decriminalize drugs - it's equally rational to
implement the actual law in meaningful ways.

It would be rational to have police walking up and down that street all day,
making sure nothing illegal is happening - taking a fairly heavy hand.

'Breaking up the critical mass' of bad behaviour, breaking up social networks
- this should be the _first_ thing the police should do.

So many people get involved (or get re-involved) because it's easy to score,
it's easy to hook up with the community.

Not allowing geographic critical masses or social critical masses to form
should be #1 on the agenda.

Of course, drugs will 'always be available' but it's a game of Supply and
Demand - and if you can put pressure on the supply so social and economic
costs raise - then you can get less people involved in the game.

If anyone is caught in public, high on a hard drug - they should immediately
have their name in a DB - and if caught twice, they should basically have
mandatory counselling or they should go off to a clinic.

It's absurd that Canadians have to pay the massive price for easy and free
hospital care for people who chose (and it is a choice in the end) to do self
destructive things.

This way, there's no fear of jail or whatever for hardcore druggies, and
frankly 'those who can handle their drugs' and be functional or whatever,
probably won't face scrutiny - they can have loved one's and family members
intervene. But many will be priced out, and many will get caught up into
clinics which is a better investment.

'Harm Reduction' is far too close to 'turn a blind eye and hope that some will
come into programs' and it's just not working.

That area of Vancouver could be cleaned up in a heartbeat if the city actually
wanted to. The bazar would be dispersed and minimized even if only because of
that.

Edit: 'harm reduction' policies are actually the opposite of 'harm reduction'
\- it's basically 'harm enablement' \- it's just the stupid opposite of
'arbitrary tough on drugs i.e. 0 strikes - you go to jail forever'.

Also - it's widely known that organized crime have control of import shipping
docs, it's absurd there isn't a hugely heavy hand on that, with tons of real
law enforcement inspections. That this could knowingly exist implies a total
failure of law enforcement.

~~~
Scoundreller
> Of course, drugs will 'always be available' but it's a game of Supply and
> Demand - and if you can put pressure on the supply so social and economic
> costs raise - then you can get less people involved in the game.

That has failed miserably. By controlling supply of heroin, suppliers moved to
more potent agents that are cheaper to produce and easier to import.

This is largely what has driven the thriving of the problem that you have
observed.

Don’t underestimate the innovation and ingenuity of suppliers.

