The head of B.C.'s civil forfeiture agency said his organization followed normal protocol in waiting three years after RCMP raids to target nearly $5-million in assets from the couple accused of running a massive money-laundering business.
Phil Tawtel, executive director of the Civil Forfeiture Office (CFO), stated in a recent affidavit that his organization knew as early as November, 2015, that the RCMP had seized $2-million in cash from Silver International as part of its E-Pirate investigation into an underground banking network allegedly laundering more than a billion dollars a year in illicit drug and gambling money. That same month, Mounties had referred a file to the CFO for $1-million in cash seized from two couriers allegedly on their way to Silver International, which was named in that CFO lawsuit but denied ownership of the funds.
Late last year, the Crown’s inadvertent disclosure of sensitive evidence led to the collapse of the high-profile criminal trial involving Silver International and its owners, Caixuan Qin and Jian Ju Zhu, a development that British Columbia’s attorney general has said underscores how Canada lacks the resources to properly investigate transnational money laundering.
Four days after their case was dismissed, the couple applied unsuccessfully to have the seized funds returned immediately. Instead, the provincial civil-forfeiture agency, which does not need a criminal conviction or even charges to pursue a file, soon stepped in to file a new lawsuit – three years after the pair’s currency exchange business, travel agency and Vancouver home were raided by Mounties.
In an affidavit filed March 22 in British Columbia Supreme Court, Mr. Tawtel states this delay was because his agency never received a referral from the RCMP to target the assets of Silver and its owners. That only happened, according to his affidavit, on Dec. 3, 2018 – a week and a half after money laundering charges were stayed.
“It is not unusual for the CFO to receive file referrals for different property associated to the same investigation at different times,” Mr. Tawtel said in his filing. “The decision of whether and when to make these referrals is at the discretion of the police, in this case, the RCMP.”
None of the allegations detailed in the civil-forfeiture claim have been proven in court.
The defendants want the case thrown out because they say – in a March 14 filing – that Mr. Tawtel and the CFO “clearly misled” the court by stating the civil claim for the cash and property was “filed as soon as it could have been” when a judge asked the agency “why now?"
“The Director brought an action against Silver International three years earlier in a related proceeding in which the two million dollars were mentioned in the pleadings,” the defendant’s filing stated. “The two million dollars were already in the Director’s sights.
"Yet, the Director took three years to file a claim in this case.”
In earlier filings, the pair have also alleged the RCMP violated their Charter rights to not be subjected to unreasonable search or seizure and arbitrary detention during the E-Pirate investigation.
Matthew Nathanson, one of their lawyers, declined to comment Tuesday other than issuing a short e-mailed statement noting: "We intend to advance our arguments in court, rather than in the press.”
On Tuesday, the B.C. RCMP declined to provide its formal rules for referring cases to the CFO and declined comment on whether the force always waits until a criminal investigation runs its course before doing so.
Police have not recommended criminal charges against Paul King Jin, the alleged ringleader of the massive scheme at the heart of the E-Pirate investigation that fell apart. But the CFO filed a civil lawsuit last week targeting more than $5-million in cash and property tied to Mr. Jin, the man authorities claim ran a large underground gambling ring that took advantage of the lax money-laundering controls at Lower Mainland casinos.
The Globe and Mail has reported extensively on the Civil Forfeiture Office, which was established as a way to fight organized crime but has come to have a far broader reach. The CFO has faced heavy criticism over the past decade for giving the province the power to seize assets from people without charging them criminally.
Earlier this month, the province announced it plans to give the CFO more powers to seize assets it deems are the proceeds of crime as the public agency faces a continuing constitutional challenge.
The agency has had $44-million worth of assets forfeited since 2014 after being referred almost 4,500 files by law enforcement, a CFO spokesperson said this month.