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Huge B.C. money-laundering investigation pivots to drugs and guns

In December 2015, a new leg of the RCMP’s E-Pirate money-laundering investigation delved into Metro Vancouver’s underworld of fentanyl labs, gun sales and violent dial-a-dope gangs.

In December 2015, a new leg of the RCMP’s E-Pirate money-laundering investigation delved into Metro Vancouver’s underworld of fentanyl labs, gun sales and violent dial-a-dope gangs.

It started with undercover officers tracking the movements of a Burnaby man named Ge ‘Gary’ Wang.

The offshoot investigation, code-named Prophet, grew from extensive surveillance of the many alleged employees of E-Pirate’s primary target, Paul King Pao Jin. In E-Pirate, the RCMP and B.C. government documents allege a network of organized criminals established a massive underground banking channel between Richmond and Mainland China, using VIP gamblers from Macau to buy chips, mostly at River Rock Casino, in order to launder hundreds of millions in drug cash. The operation allowed ultra-wealthy Chinese businessmen, some allegedly with ties to organized crime, to move money from China to Canada while evading China’s tight capital export controls.

Postmedia News has pieced together the story of Prophet through extensive investigation of B.C. property, lending and legal documents, including two major civil forfeiture claims, and interviews with law enforcement sources not authorized to be identified on the record.

Prophet built on E-Pirate intelligence, a source with knowledge of both investigations said, by connecting the dots between Asian organized criminals accused of importing narcotics, and the Red Scorpions, a notorious Metro Vancouver dial-a-dope gang.

B.C. government records obtained by Postmedia illustrate just how closely Jin and his associates had been watched in Richmond from mid-2014 through 2017.

“Our main target at River Rock had been extremely active of late and has actually been on the property several times making deliveries of cash himself!” says an October 2014 email from B.C. Lottery Corp. to the B.C. police anti-gang unit, the Combined Forces Special Enforcement Unit. “Their main vehicle is a white SUV that parks on River Road, avoiding our licence plate recognition system most times. Last week, Jin dropped two loads of a half million per load to the same guy and a few smaller loads of 200-300 K each, so hour (sic) is a busy boy.”

A June 2014 email from B.C. Lottery Corp. to the anti-gang unit regarding a top-10 list of cash lenders working around Lower Mainland casinos — “with the majority devoted to River Rock patrons” — said Jin, the top “cash facilitator,” was “extremely active and has numerous people working for him.”

But Jin wasn’t involved only in recruiting whale gamblers in China and lending them cash to use at River Rock. A November 2016 B.C. Supreme Court ruling, which permitted the Canada Revenue Agency to get E-Pirate evidence, says Jin and several associates were allegedly connected to probable offences involving narcotics importation and trafficking, as well as operating illegal casinos, evading taxes and conspiring to launder money.

So far, money-laundering charges have been laid against Silver International, an alleged illegal Richmond money services business named in the B.C. Supreme Court ruling, and two people. The E-Pirate probe is nearing completion and more charges are expected, a source with knowledge of the investigation said.

Civil claim

According to a May 2017 B.C. civil forfeiture claim, RCMP’s federal serious and organized crime unit started an investigation in December 2015 into a group operating drug labs in Richmond.

Surveillance was established on Ge Wang, and police observed Wang “providing pails believed to contain chemicals” to suspects from several Richmond homes. Police obtained search warrants, and found drug labs in the homes. Almost a year would pass in the investigation, until Nov. 25, 2016, when officers observed Wang loading buckets believed to contain chemicals. Police searched Wang’s Nissan Pathfinder and seized drums containing NPP, a fentanyl precursor chemical.

In a series of email responses to questions from Postmedia, Wang insisted he has no idea why police associated him with Paul Jin and placed him under surveillance. Wang provided Postmedia a copy of a legal application filed by the RCMP to extend an order to hold items seized from Wang’s Pathfinder, and said the RCMP won’t respond to his questions about why the vehicle was searched.

“I am doing moving and delivering — part time job — when the polices (sic) took my vehicle unlawfully. They took some drums from the vehicle,” Wang said. “I don’t know what is NPP. I just realized, but I don’t know where the NPP come from. I am just a mover. I don’t know about Paul King Jin. I think the police got wrong one.”

The question asked of Wang — where did the NPP come from — is an important one, as Metro Vancouver is plagued with a crisis of fentanyl overdose deaths.

In a 2017 study titled “China’s Deadly Export to the U.S.,” a United States security commission reported that because fentanyl is not widely used in China, state authorities “place little emphasis on controlling its production and export.”

The fentanyl precursor NPP is also not controlled by China, according to the report. And U.S. Drug Enforcement Administration agents report that fentanyl precursors including NPP are mailed from China for use in clandestine labs in Canada.

In January 2017, according to legal filings, police learned that within a six-week period Wang had acquired 18 restricted firearms from West Coast Hunting Supplies in Richmond. Corporate records show that Hai Peng Yang is the gun shop’s director. The shop is involved in firearms training courses and “wildlife specimen” exports, according to its website. Yang and shop employees didn’t respond to a request for comment on the civil claim allegations regarding Ge Wang’s restricted gun purchases from West Coast Hunting.

On Feb. 8, 2017, legal filings allege, Wang went to West Coast Hunting and purchased seven firearms, placed the weapons in two blue plastic bags, and put them in his vehicle. He drove to a home on on 55 Street in Delta, allegedly in contravention of his firearms licence. The filings don’t explain the regulation that Wang allegedly broke. However, the RCMP specifies that under the Firearms Act, a gun owner must have the registration for any restricted firearm in their possession and an authorization to transport a restricted firearm from one location to another.

According to police, another man arrived at the 55 Street home, driving a 2016 Cadillac CTS, and loaded the two blue bags into the trunk. It drove several minutes to a French-style mansion on 5th Avenue, which is near the ocean in Tsawwassen, and about three kilometres from the U.S. border in Point Roberts. Csongor Szucs, 30, is a resident of the mansion, according to the legal filings.

Dial-a-dope claim

Szucs is the sole defendant in a separate civil claim dated August 2017 and seeking forfeiture of two vehicles. The claim says that in April 2016 — around the time of the RCMP’s final E-Pirate raid in Richmond — undercover RCMP officers started investigating a network of alleged dial-a-dope traffickers in Richmond. From June 2016 to January 2017, officers completed 28 drug deals with traffickers associated with Szucs, the claim alleges. The officers bought fentanyl, cocaine and heroin either supplied by Szucs, or sold to them inside five vehicles leased to Szucs, the claim alleges.

Through surveillance, officers identified that a 2007 Cadillac Escalade and a 2007 Mazda CX-7 leased to Szucs were connected to several Richmond homes, including a drug “stash house,” a unit of a multi-storey building on River Road, the forfeiture claim alleges.

The court filing also claims that in September 2016, undercover officers observed Szucs driving the Escalade to meet an associate. Szucs supplied the man with drugs, it alleges, and the man drove another vehicle registered to Szucs to fill an order with an undercover officer. The police officer bought pills which he was told were OxyContin, the claim alleges, but which contained fentanyl.

The investigation accelerated in January 2017 with a dramatic arrest. RCMP officers staking out the River Road stash-house spotted Szucs transferring a shopping bag from the 2007 Mazda to the Escalade. Then he entered the stash house and carried a black snowboard bag to the Escalade. As Szucs got into his Escalade, an officer approached, and Szucs tried to speed away as the officer jumped into the Cadillac, “in an attempt to stop Mr. Szucs from fleeing.”

With the officer in the front seat of the Escalade, Szucs accelerated and smashed into a concrete pillar, injuring the officer, the claim alleges.

Police arrested Szucs and searched his Cadillac. They allege they found a loaded Sig Sauer SP2022 handgun with its serial number filed off. And, hidden inside the black snowboard bag, an SKS rifle. The SKS, a Soviet-era semi-automatic military rifle that preceded the Soviet AK-47, is not restricted in Canada. However, in 2014, the RCMP issued safety warnings saying that at least one SKS was found to have fired as a fully automatic weapon in Ontario. And in 2014 in Nanaimo, Mounties said they were concerned to find two SKS rifles in a raid of a drug lab.

“Any time you have something capable of firing more than one bullet (in rapid succession), it’s concerning,” Sgt. Sheryl Armstrong was quoted in the Nanaimo Daily News. “You think about the massacres we’ve had with AK-47s.”

After Szucs’s arrest, police searched the River Road stash house, and allege they found drugs including fentanyl, crack, methamphetamine, heroin and 215 Xanax tablets, along with eight computers and 20 cellphones.

Through surveillance, officers identified that a 2007 Cadillac Escalade and a 2007 Mazda CX-7 leased to Szucs were connected to several Richmond homes, including a drug “stash house,” a unit of a multi-storey building in on River Road, a forfeiture claim alleges.

The Cadillac and Mazda were seized as property related to alleged crimes. And “on Feb. 7, 2017, the RCMP Integrated Homicide Investigation Team searched the Mazda pursuant to a search warrant.”

The claim doesn’t explain why IHIT homicide investigators became involved in the investigation, or the team’s basis for obtaining a warrant to search the Mazda. But officers located a hidden compartment in the Mazda, the claim says, and in the following days police executed repeated search warrants inside and nearby Szucs’s home, the mansion in Tsawwassen.

More seizures

On the next day, Feb. 8, after meeting Ge Wang in Delta and receiving seven firearms, a man driving a Cadillac SUV arrived at the French-style mansion.

Delta police stopped the man as he left the mansion, which is about 100 metres from English Bluff Elementary School, and searched the Cadillac. From the rear they seized a bag with heroin, cocaine, and methamphetamine, all packaged for sale. On the passenger seat was a “black man-purse” containing $4,295 bundled in elastic bands, and a money order for $400 from Szucs, payable to Justin Haevischer.

Haevischer is the younger brother of convicted Surrey Six killer Cody Haevischer, of the Red Scorpions. In September 2016, Justin Haevischer was sentenced to 20 months in jail for helping to dispose of evidence related to the October 2007 Surrey Six murders.

Police struck again on Feb. 9. Delta police officers stopped a man driving a GMC Sierra as it left the 5th Avenue property, and found three cellphones.

Hours later, police stopped a Hyundai as it left the 5th Avenue mansion. According to the civil claim, Kyle Latimer was the passenger, and his father Craig Latimer was driving. Kyle Latimer was the subject of a firearms prohibition stemming from a 2011 assault. Police allege they found a hidden compartment containing $51,000 in cash stuffed into a copper box, $52,000 packed in a yellow cloth bag, and $7,300 in a silver briefcase. Next to the cash, police found a digital scale, a Lee Enfield Ishapore .303 calibre rifle, a Siminov SKS 1952 Tula Factory rifle, a Winchester Model 1200 12-gauge pump-action with a filed down serial number and sawed off barrel, and an Arms Machine pistol AP9 9mm.

The AP9 is a prohibited weapon in Canada, according to online databases, and is described as a submachine pistol that was banned in many U.S. states in the 1990s. According to online sniper forums, the Lee Enfield Ishapore, a non-restricted rifle in Canada, is valued by long-range shooters.

“During the Soviet-Afghan War of the 1980s, Mujahedeen found the .303 Enfield had twice the effective range of the AK assault rifle and could punch through Soviet flak jackets,” one description reads.

Police also found about $7,000 cash on Kyle Latimer and, in the Mazda’s secret compartment, cocaine, heroin, methamphetamine and various pills packaged for sale, along with “scoresheets.” In the drug world, score sheets are lists that keep track of money owed for inventory.

On the same day, police raided Ge Wang’s residence on Kathleen Avenue in Burnaby. Police arrested Wang and found various firearms registration certificates, various pieces of lab equipment, two drums containing 57 kilograms of phosphoric acid, a precursor in methamphetamine production, and a 25-kg drum of potassium iodide, also a drug precursor, according to the forfeiture claim.

Postmedia asked Wang if he obtained the firearms registration certificates from West Coast Hunting Supplies.

“I got my firearm licence legally,” Wang responded. “The registration certificates were mailed to my place.”

While police raided Wang’s home in Burnaby, the arrests continued at the 5th Avenue property in Tsawwassen. Delta police stopped a 2015 Fiat 500, and inside were three young men, some of them previously charged with drug dealing in Surrey.

Police searched the Fiat and allege they found $84,865 in cash, scoresheets, identification for Kyle Latimer, a money counter, two digital scales, a Sig Sauer 9 mm pistol, plus heroin, crack, methamphetamine, marijuana, and counterfeit Xanax pills.

Later in the day, a Surrey woman left the 5th Avenue property and placed a Louis Vuitton bag in a Tsawwassen taxi. Delta police stopped the cab, and found a black satchel containing eight cellphones and business invoices made out to Kyle Latimer. Tucked into the Louis Vuitton bag was $54,650 in cash, and a lockbox with six divided compartments. In each of the six compartments were keys for various residences and vehicles. Also in the lockbox, police found a chequebook and several pieces of I.D. in the name of Csongor Szucs, and “a notebook referencing locations of rental properties and corresponding rents.”

Finally that day, police executed a search warrant at the 5th Avenue mansion. They found a safe, $46,125 in cash stuffed into a shoebox, records of deals completed and debts owed, and 11 prohibited high-capacity firearms magazines. High-capacity magazines are designed to hold more rounds of ammunition than a weapon is legally designed for, and generally allow gunmen to fire additional rounds without pausing to reload.

Ten defendants are named in the May 2017 civil forfeiture claim, including Kyle Latimer, Csongor Szucs and Ge Wang. Latimer has been charged with a number of criminal cases and is considered violent, according to Richmond RCMP. Court records show that Szucs faces a number of weapons charges stemming from his arrest in January 2017.

In response to Postmedia’s questions, Wang said B.C.’s Chief Firearms Office has cancelled his gun licence.

“No charges against me yet,” Wang wrote in an email. “Just forfeiture, my same vehicle two times by unlawful.”

The RCMP would not answer questions for this story, including whether West Coast Hunting Supplies is under investigation.

“What I can tell you, is that CFSEU-B.C. is aware of West Coast Hunting Supply, however, I don’t have information on the specific questions you have outlined in your email,” Sgt. Brenda Winpenny said. B.C.’s Chief Firearms Office also did not respond to Postmedia’s requests for comment.

‘Proceeds of crime’

The cash, vehicles, guns, phones and computers seized in these claims are proceeds and instruments of crime, the forfeiture claims allege. These assets will likely lead to “serious bodily harm to a person,” if defendants are allowed to retain them, the May 2017 claim says.

B.C.’s civil forfeiture office is not seeking to seize the Delta homes named in the May 2017 claim. But in an interview, Phil Tawtel, B.C.’s executive director of civil forfeiture, said that seizure claims can be “dynamic.”

Tawtel said he could not comment on these continuing cases, but generally, his office can amend claims and pursue additional assets if police produce strong-enough evidence. The office’s lawyers can also discover in litigation that properties are connected to crimes, Tawtel said, which can lead to amended claims.

According to land title records, the 5th Avenue property named in the claim, from which police seized cash and weapons in February 2017, is owned by Jasmine Xu, who lists her occupation as “housewife.”

The property is valued at $1.96 million. According to title records, Jasmine Xu’s residential address is a Vancouver home on the 2600-block of 19th Avenue West, worth $3.94 million. The Vancouver home is not named in the claim. A review of B.C. title records shows that a “housewife” named Jasmine Xu owns a $1.26 million home on Parkgrove Crescent in Tsawwassen (also not named in the claim), which is about 30 metres from the U.S. border in Point Roberts, and a six-minute drive from the 5th Avenue mansion.

According to title records, the second Delta property named in the civil claim, where Ge Wang allegedly delivered seven guns to another man, is owned by Junchen Xue, “homemaker.” That property is valued at $1.1 million.

In a 2016 study, global anti-corruption agency Transparency International pointed to the rising use of opaque ownership structures in Vancouver real estate, including shell companies, legal trusts, and so-called nominee owners with occupations such as “student” and “housewife.” The study’s author, Adam Ross, says these occupations can’t possibly produce the income needed to buy a house in Metro Vancouver, which is why housewives and students are considered front buyers. Of Vancouver’s 100 most expensive homes, the study found, about half of ownerships were hidden, with 29 held through shell companies and at least 11 through nominees including students and housewives.

In an interview, Tawtel said his office attempts to unveil nominees in some cases.

“It adds a layer of complexity and work for the office, because there are instances where the registered owner, we believe is not the beneficial owner,” Tawtel said. “And it is extremely challenging to produce the evidence, in order to prove this in court. “

Several Richmond homes are named in the August 2017 civil forfeiture claim against Csongor Szucs, which seeks seizure of two vehicles. In a response, Szucs denies any wrongdoing, and argues that police illegally searched his vehicle.

The alleged Richmond drug stash-house in the 6200-block of River Road was owned at the time of Szucs’s arrest by a woman named Mary Chan, whose listed occupation is “homemaker.” The property is valued at $600,000. Title records for the home say that Mary Chan’s owner address is 3280 River Rd. in Richmond, a property valued at $3.05 million.

However, the land title for 3280 River Rd. says that its owner is “Saree Chan … business person.”

And a transaction document for 3280 River Rd. says that “Saree Chan” is also the owner of 5811 Gibbons Rd., a $3.3-million Richmond property. However, the land title document for 5811 Gibbons  indicates that its owner is “Mary Chan” of 3280 River Rd.

In 2017, in a presentation explaining the E-Pirate investigation and various targets involved in suspected real estate money laundering, RCMP Insp. Bruce Ward said that officers were making the case for home seizures to B.C.’s civil forfeiture office, but investigators have encountered extremely complex side-deals.

“The actual investment by the conspirators was very little, because they are just paying a really exorbitant rent,” Ward explained. “That is another business deal, (in which) organized crime is involved. So you agree to buy a house, and lease it to someone, who is going to lease it again to someone else. And then I show up a month from now, and you give it to me for rent. And I pay (something like) $10,000, per month, rent.”

E-Pirate update

The majority of evidence collected in E-Pirate comes from 13 searches executed in properties across Richmond in October 2015 and April 2016. A B.C. Supreme Court judgment, which permitted Canada Revenue Agency to obtain E-Pirate evidence, says police established reasonable grounds that offences were committed by defendants including Paul King Pao Jin, his wife Xiaoqi Wei, Hoy Pan Chen and Silver International Investments Ltd.

E-Pirate raids seized $2 million in cash from Silver International and $4 million in cash from the home of “one of the individual respondents,” the ruling says, adding, “his declared income is modest.”

So far, only Silver International, Cai Xuan Qin and Jian Jun Zhu have been charged in E-Pirate.

Two lawyers, listed as acting for Jin and his wife Xiaoqi Wei in legal filings regarding Canada Revenue Agency’s criminal investigation of E-Pirate evidence, did not respond to Postmedia’s request for comment. Civil court filings say that Wei is Jin’s wife, and that she is involved in real estate lending disputes with borrowers including a number of students.

Court records show that Hoy Pan Chen was charged for trafficking in a controlled substance in a previous B.C. case involving several other suspects charged with importing and exporting drugs, in Delta, Prince Rupert, Surrey, Vancouver, Kelowna, and Merritt.

None of the allegations in the investigations has been proven in court.

Restricted firearms 

Under the Criminal Code, the definition for restricted firearm includes a handgun that is not prohibited, or a firearm that has a barrel under a certain length and can fire semi-automatic rounds. People must receive special training, plus proper licences and registration, to possess restricted firearms.

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