Money laundering in BC luxury car market

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May 8, 2019, Vaughn Palmer, Vancouver Sun.

VICTORIA — When money-laundering expert Peter German turned his attention to the luxury car market late last year, he was not long in assembling the telling anecdotes that made his earlier findings on the casino industry so persuasive.

“I’m right in the thick of money-laundering here,” one new car dealer, speaking in confidence, told German’s team of investigators.

Unlimited cash transactions being legal in the sector, he went on to recount one particularly dramatic instance.

“Several years ago, a young person purchased a vehicle for in excess of $200,000. For safety, a few employees of the dealership took the money, in a bag, to the dealer’s bank. The bank asked what it was for? An employee replied that it was from the sale of a car and the bank employee said that was fine.”

Not everyone in the luxury car sector was obliging. “Some other dealers refused to acknowledge our requests for interviews,” said German, in the portion of his latest report made public Tuesday.

But those who did co-operate provided ample perspective on the problem of suspicious cash transactions by no-less-suspicious buyers.

“I see these young kids driving these supercars and super luxury cars and no one has looked at the source of income and audited this. It is so blatant,” said one dealer operator.

“But don’t put us between the government and gangsters because that’s not fair,” he pleaded, saying the remedy is tougher regulation. “We should require people to substantiate that their income is coming from a valid source. How is a 19-year-old kid driving a $500,000 car that he’s making payments on, yet I get a letter from the Canada Revenue Agency because I forgot to report one T5 with $60 interest?”

If it seems outrageous that car dealers would turn a blind eye to questionable transactions, considering what German turned up in the database of the Ministry of Finance.