Hail of bullets kill an accused China-Vancouver money launderer and shatter myth of a victimless crime

25-Sep-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

At least seven bullets raked through the tinted windows of the Manzo Itamae Japanese Restaurant in the Vancouver satellite of Richmond, at around 7.30pm on Friday night.

The shooter fired from the northeast, at an angle almost parallel to the glass; the bullets ripped long paths through the thick pane. One round also punched finger-sized holes in the metal window frame, before tearing a 10cm (4-inch) gouge through the laminated glass at head height.

Dining on the other side of the window were accused money launderers Jian Jun Zhu and Paul King Jin. Zhu, 44, was killed. Jin, aged in his 50s, was wounded in the face.

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The brazen attack, which investigators have characterised as a targeted hit on two men well known to police, also shattered any illusions about money laundering being an innocuous offence, in a city that lends its name to a particular method of smuggling money in and out of China the “Vancouver Model”.

Both Zhu and Jin were the subject of investigations into Zhu’s alleged underground bank, Silver International, that officers suspected was laundering more than C$220 million (US$165 million) per year.

Although a criminal case against Zhu collapsed in 2018, the BC government launched ongoing lawsuits against both Zhu and his suspected client Jin, seeking the forfeiture of millions worth of cash, real estate and casino chips.

Christine Duhaime, a Toronto-based anti-money-laundering consultant who has advised Chinese and Canadian banks, said the attack suggested that someone “did not want an investigation to proceed”.

Duhaime said the attack also put lie to the myth that money-laundering was relatively harmless: “We heard it often before in Vancouver, ‘it doesn’t harm anyone, it’s victimless’… but it attracts a lot of other criminality. We are seeing in Vancouver the sort of thing you would once see in Macau, regarding gambling debts. We’re beginning to see the violent side of money-laundering.”

We believe this was, obviously, a targeted incident

Sergeant Frank Jang, Royal Canadian Mounted Police

Royal Canadian Mounted Police Sergeant Frank Jang, a spokesman for the regional integrated homicide investigation team (IHIT), confirmed Zhu’s identity, while a source with knowledge of the investigation told the SCMP that Zhu’s wounded dining companion was Paul King Jin.

The Vancouver Sun’s Kim Bolan was the first to report that Zhu and Jin were the victims.

But Jang said IHIT could not comment on the identity of the wounded man, who had been discharged from hospital. “He’s making efforts to stay out of the limelight. He’s very fearful, for himself and his family,” said Jang.

Jang said both victims were “well known to police”.

“We believe this was, obviously, a targeted incident,” he said, although IHIT was not commenting on the allegations against Zhu.

Suitcases of cash

The accusations against Zhu and Jin are laid out in lawsuits filed against them by British Columbia’s director of Civil Forfeiture, claiming the pair’s assets.

The criminal case against Zhu collapsed in 2018, for reasons that are unclear. But the forfeiture actions accuse Zhu of running Silver International as an underground bank for people associated with the drug trade.

Customers would turn up at Silver International’s office in a Richmond business centre with suitcases and large bags filled with cash, a police affidavit said. Silver International’s clients included the “Yellow Triangle Boys” triad gang, the government’s lawsuit claims.

On October 15, 2015, police raided the office and found safes packed with more than C$2 million in cash, that sniffer dogs indicated was “positive” for drug residue, according to the lawsuit. Ledgers seized during the raid suggested Silver International was processing about C$220 million a year, police said.

The investigation of Silver International had started with a probe of Jin’s activities; in the separate lawsuit against him, the director of Civil Forfeiture says Jin “has a criminal record with convictions for aggravated assault, sexual assault and sexual exploitation”, although Jin has denied the “totality” of that description.

A police raid on Jin’s riverside flat in Richmond and other addresses, conducted on the same day as the Silver International raid, found more than C$4.8 million in cash and C$45,000 in casino chips.

Jin had been banned from all BC casinos, having been involved in cash deliveries to high-stakes gamblers and suspected of loan sharking, the lawsuit said, and he and his associates were involved in 140 transactions involving more than C$23 million at casinos between 2012 and 2015.

In turn, Jin and his associates would bring “suitcases, boxes and bags containing large sums of currency derived from unlawful activity” to Silver International, the lawsuit alleges.

In his response to the lawsuit, Jin says the cash and chips were acquired lawfully. “[Jin] has been a citizen of Canada for over twenty-five years,” his response says.

“He has been engaged in the sports of boxing and martial arts for most of his life… Jin has engaged in numerous forms of lawful employment over the course of his life, including while in Canada, and has been successful in lawfully producing income for himself and his family in the process.”

Lawyer Bibhas Vaze, representing Jin in the forfeiture case, said he would not comment on the shooting.

Zhu, in his response to the forfeiture case, had denied “any legal basis” for the claim. “The defendant is no longer charged with any criminal offence in relation to those matters,” he had said.

The Vancouver Model

The alleged activities at Silver International have been a focus of British Columbia’s ongoing Cullen Commission into money laundering that was launched in 2019.

The commission heard how the Vancouver Model of laundering had become known internationally, premised on thwarting China’s $50,000 annual limit on cash exports.

The model, described by criminologist Stephen Schneider to the commission in May testimony, is designed to achieve two things: smuggle Chinese money into Canada, while simultaneously laundering Canadian drug money and sending it to China.

A person who wants to move money out of China deposits cash into Chinese bank accounts that are associated with an underground bank. The customer then travels to Canada where they are presented with Canadian currency derived from the drug trade; that cash is then converted to chips at a casino. After a gambling session, the chips are cashed out in the form of a cheque.

The drug traffickers meanwhile receive their funds from the underground bank in China.

By pairing two sets of customers in this way, an underground bank is able to provide each with money in different countries, effectively moving cash between countries without it being transferred physically or electronically.

Transnational gangs from Asia, many of which have been operating in Vancouver, are now being used to provide money laundering as a service… that’s pretty astounding

Anti-money-laundering consultant Christine Duhaime

Silver International was a key player in the Vancouver Model, Schneider testified.

The Vancouver Model represented a combination of various money-laundering strategies, Duhaime said, and a confluence of circumstances had created a “perfect storm” for money-laundering in the city.

Duhaime said money-laundering in Vancouver was so sophisticated that it existed not just as a by-product of a particular criminal enterprise, but as a separate service industry.

“Transnational gangs from Asia, many of which have been operating in Vancouver, are now being used to provide money laundering as a service… that’s pretty astounding,” said Duhaime.

Because Canada’s regulators were based in Ottawa, they tended to focus on that side of the country, she said. “It’s like Lord of the Rings. The eye is not focused on Vancouver, it’s always on Toronto, and criminals are pretty smart. They know when an area is being looked at and regulated.

“From the criminals’ perspective, they sensed early on that there was not a lot of attention on Vancouver, that the eye was somewhere else.”

The China-Vancouver money laundering industry depended entirely on China’s cash export limits, Duhaime said. “If China were to relax those, then the grey banks would go out of business,” she said.

Vancouver has been a focal point for Chinese money outflows for many years, as a key immigration destination for mainland millionaires and their families. Although the specifics of the Vancouver Model are certainly illegal, smuggling money out of China is not necessarily so in Canada some Canadian bankers once tolerated the practice as part of the mortgage business.

The real estate industry in particular had long held a permissive attitude to dubious money flows, Duhaime said, and “in a nutshell, we bred a culture in which this kind of activity was allowed. Now we are trying to turn that culture around”.

“Among realtors, it’s complicated. It’s not like they were given a lot of assistance, even if they were asking for it, to comprehend what their [anti-money-laundering] obligations are. They struggled for many years, but now have a much better understanding of their obligations and a whole new system of oversight, but it has taken many years.”

But for IHIT’s Sergeant Jang, the focus now is a murder investigation.

“We’re homicide investigators,” he said. “I know there are a lot of other police agencies involved in investigating Zhu, but as far as we’re concerned he’s our victim… we’re not investigating a dead man for money laundering.”

Jang said it was still unclear whether the gunman intended to kill Zhu or Jin. “It could have been one, it could have been the other, it could have been both.”

He said police were shocked by “the brazenness, the recklessness” of the shooting, and the disregard for bystanders in the restaurant. “When we have a shooter on the other side of glass [it's] really unpredictable where those bullets go. Lay people think a bullet goes in a straight line. That’s not always the case,” he said.

“The possibility of innocent victims, collateral damage, could have been much worse.”

Jang said IHIT was appealing for dashcam footage of the scene, including from anyone who was on busy Garden City Road between 6.30pm and 8.30pm on Friday.

“There has been a lot of talk about who the victims were, but the focus of our attention should be on the shooter, the person or people who are responsible for this,” said Jang.

“It’s a very active investigation. It’s being given a lot of attention, not just from the public but from people in government. We’re working hard.”




Category: China

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