You might have heard Guangdong province referred to as the world's factory; it turns out that also applies to illegal drugs – specifically, synthetic opioids that have led to an increasing number of deaths in western Canada.
What's more, local criminal organizations are believed to making use of Canadian casinos, as well as expensive real estate, to launder the money from drug sales, contributing to a housing bubble in Vancouver.
The profits from trafficking then return to Guangdong drug-producing factories, starting the cycle all over again, according to a report by John Langdale of Sydney's Macquarie University, as quoted by Global News.
Langdale presented his findings on what's since been dubbed the 'Vancouver Model' to Australian government officers, including the country's own anti-laundering agency. According to his report, the model involves the following:
"Trafficking illegal drugs from Guangdong and Latin America."
"North American illegal drug dealing networks supplied by Chinese methamphetamines and precursor chemicals."
"Laundering money into high-end real estate (funded by Chinese) capital flight, and laundering money through the high-roller tables in casinos."
"High rollers using Canadian casinos, junket operations, and investment in Canadian real estate."
"Using banks and money transfer businesses to shift money to and from China and other countries, including Mexico and Columbia."
The system is allegedly orchestrated by the Triads, a loosely-grouped criminal organization rooted in Chinese communities around the world. Here's how Langdale lays it all out.
Cashing Out
Trafficking depends on a network of underground banks that maintain reserves at different locations, allowing members to 'withdraw' and 'deposit' funds outside of state supervision. Historically, such organizations have existed for centuries on China's south coast. Today, they operate with the help of lawyers, actual bankers, casino operators and more in Macau, Hong Kong and Vancouver.
Casino junket operators play a pivotal role, giving out loans to rich Chinese who then purchase chips at Macau casinos. The chips can be used to buy real estate outside the country, while the loans can be repaid at low interest – essentially allowing buyers to send their money abroad with minimal regulation.
According to British Columbia government documents, Global News reports, in recent years junket operators and their clients have moved from Macau to Vancouver.
British Columbia's Attorney General, David Eby, testified before a federal committee that despite the fact that gang members have been known to carry hockey bags full of drug money into local casinos, there have been no prosecutions.
In response to Langdale's report, Eby told Global News that “Vancouver is now recognized internationally as a hub of transnational money laundering.”
Deep Roots
Although Langdale's report brings new perspective to a growing problem, the 'Vancouver model' was reported as far back as the 1994 by former police superintendent and investigator Garry Clement.
“The Triads were a multinational crime syndicate back in the ‘90s, and we have allowed them to expand, using Canada as a base," Clement revealed to Global News.
In his 1994 report, Clement noted that South China's Triads have long held ties with leaders such as Nationalist president Chiang Kai-shek. After the Communist victory in 1949, many fled to the outlying territories of Macau, Taiwan and Hong Kong, where they put down roots.
They also regained power in the mainland after China's reform and opening up in the 80s, according to Clement. Gang members took advantage of new economic opportunities, particularly in the area that has since become the country's manufacturing hub: the Pearl River Delta.
While Guangdong's Triads produced drugs (as well as counterfeit goods), Hong Kong's criminal group were known to finance shipments, launder money and make loans – all as early as the 90s.
Lethal Consequences
Last October, the US Department of Justice for the first time named two Chinese nationals as high-priority international criminals for controlling factories that produced "massive quantities" of opioids for the American market.
It's a sign of how serious the problem has become in recent years.
In Canada, too, the Border Services Agency has gradually seized increasing amounts of fentanyl from China, from 7.2 kilograms in 2014 to 58 the following year, then 20.5 kilograms in the '16-'17 fiscal year.
In 2017, British Columbia coroners reported a record 1,400 deaths from drug overdose, roughly 81 percent of them involving some form of fentanyl.
It's a sobering figure, making Canada's efforts to address its drug problem all the more urgent.
READ MORE: How OxyContin Could Trigger a Second Opioid Epidemic in China
[Image via 1310news.com]
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