An investigation into large-scale tobacco smuggling to British Columbia has reached into Ontario, with the arrest of eight suspects accused of running a contraband ring that shipped more than half a million cartons of cigarettes from China to Canada, along with chemicals for the manufacturing of amphetamine and even counterfeit running shoes.
The suspects are alleged to be members of Asian organized crime, the RCMP said Tuesday in announcing their arrests.
The criminal network is accused of being behind two of the largest seizures of contraband cigarettes in B.C., with an estimated value of $8.3-million.
For two years, Canadian law-enforcement agents worked with police in China, Hong Kong and Taiwan to crack down on the group of alleged Asian organized crime.
During that time, the RCMP said, federal agents intercepted 11 shipping containers, seven in Vancouver and four in Toronto, that the gang used to smuggle 583,600 cartons of cigarettes and six tonnes of Phenyl-2-Propanone (P2P), an oily liquid for the illicit production of amphetamines.
The eight arrests took place last Wednesday, Oct. 26.
In Ontario, the authorities charged Lam Minh Boo, 51, of Maple, Liao Ze Hua, 43, and Shen Wei, 43, of Niagara Falls, Shen Hui, 44, of Mississauga, Zhou Qiang, 34, and Sun Yun, 44, of Markham, and Liu Genlian, 40, a Chinese citizen living in Kettleby.
Chan Chi Wai, 46, of Burnaby, B.C., was also arrested and warrants were issued for Lin (Charlize) Shuting, 36, and Chinese national Huang Zhi Xiong, 32, of Vancouver.
Colleen Pinvidic, a chief of operations with the Canada Border Services Agency, called it a “significant conclusion” to the multi-agency investigation.
The investigation began in 2009 when border agents in Vancouver first intercepted a shipping container with counterfeit cigarettes destined for Toronto.
In April 2010, the Canada Border Services Agency was inspecting a marine container from China destined for Richmond, B.C. It was supposed to be a shipment of household sinks but after an X-ray examination, agents opened the container and found 50,000 cartons of counterfeit cigarettes with a street value of $3.4-million, the largest seizure in B.C. at the time.
Six Lower Mainland suspects were arrested but later released.
Later that fall, the CBSA spotted another suspicious shipment of shoes coming to Vancouver from China. Inside, amid counterfeit Nike running shoes, the agents discovered 150 jugs of P2P chemical precursors.
The RCMP arranged for a police-controlled delivery on Oct. 18, which led investigators to a sprawling estate in Richmond, where they found more P2P containers, stacked from floor to ceiling, along with credit-card counterfeiting equipment and $130,000.
The house, known as Fraserwinds, once was owned by the high-profile Chinese fugitive Lai Changxing, but police say he is not connected to the case.
Less than two weeks later, another massive shipment linked to the same organization was seized after CBSA agents at the port of Vancouver X-rayed a container from shipment. It was supposed to hold nails, screw kits, cutting blades and other tools. Instead, there were 51,000 cartons of cigarettes. The counterfeit packs of Du Maurier cigarettes came with bilingual Health Canada warning marks.
A Burnaby man and six Chinese men were arrested.
“It was a significant operation. Their scope was wide,” the CBSA's Ms. Pinvidic said. “They used the business number of legitimate importers and used their information inappropriately to bring these good into Canada.”
Ms. Pinvidic said documentation for all containers is reviewed and officers rely on pre-arrival information, intelligence and advanced databases to identify suspect containers. But she noted that more than 1.3 million containers are shipped through the Port of Vancouver annually.
“We know that Vancouver is a gateway,” said Ms. Pinvidic, who called the seizures “the tip of the iceberg.”
According to a recent report by the United Nations Office on Drugs and Crime, amphetamine-type stimulants such as methamphetamine and ecstasy rank second to cannabis as the world's most widely used drugs.
Organized crime groups in Canada with ties to East Asia are increasingly significant players in manufacturing and trafficking amphetamines, according to the report. While attempts to control precursor chemicals have slowed the European production of amphetamines, Canadian crime groups are smuggling significant amounts of P2P and other precursors into the country from India and China.
The report says cross-border trafficking of methamphetamines from Canada to the United States is relatively low compared to ecstasy. The Pacific Region is considered a manufacturing hot bed, and British Columbia is believed to be “the primary smuggling corridor for ecstasy trafficking from Canada.”