The B.C. government is going after a couple demanding they explain where they got the money to purchase a house.
It is the first use of B.C.’s new Unexplained Wealth Order, which is legislation intended to combat money laundering. It puts the onus on alleged launderers to explain where money came from to buy their assets.
In this case, the government is focusing on a Salt Spring Island home, worth nearly $2 million.
Mike Farnworth said Thursday that the notice of civil claim filed in B.C. Supreme Court is the beginning of a series of similar applications, which will be powerful tools that “put those engaging in illegal activity on notice.”
A statement from Farnworth said the province “will not tolerate criminals prospering in our communities” and it will pursue illegally acquired properties, luxury vehicles, money laundering schemes and businesses operating as fronts.
Bibhas Baze, a Vancouver-based lawyer who specializes in civil forfeiture matters, told Global News he doesn’t think the new law is required.
“It certainly isn’t necessary, especially given what we know about the effectiveness of civil forfeiture, and that civil forfeiture has been very successful in being able to get wealth and property from individuals,” he said. “Even with all the concerns that it might not be fair at the end of the day, civil forfeiture has still been very successful, even in the face of those concerns. And so I don’t see it as necessary in that way.”
Moreover, Baze said it allows the B.C. government to treat certain citizens in an unfair way.
“They’re supposed to be fair in the way they treat us, no matter what they might think about who we are as individuals or as a society. They need to be fair in how they treat us,” Baze added. “This seems to be taking that unfairness to another degree, because what it is, is it’s allowing defendants to be put in a position where they’re even more prejudiced than they are in the standard civil forfeiture proceedings. So not only is it not necessary but it goes further in terms of not being fair to the citizen.”
The civil forfeiture action in this case alleges the house on Salt Spring Island was purchased by a couple, with the proceeds from a $200 million international stock fraud.
The government now wants to seize the house under civil forfeiture laws.
“I can’t provide you at this point with the specific circumstances, but what I can tell you, it often involves fraud in significant cases,” Farnworth said. “It could, for example, involve stock fraud, organized crime, criminal activity. It could involve money laundering. It could involve what’s often referred to as pump-and-dump scams. There’s a whole range of activities where this legislation is going to allow us to go after criminals and their assets.”
But Baze cautions how this law might affect different British Columbians.
“I know the impression out in the public…is that all of the people that are going to be affected by this are going to be rich people who, you know, are probably getting a ton of money from laundered sources,” he said.
“But the act doesn’t say that this will only apply to rich people who have millions of dollars. We don’t know how it may affect some mom and pop, for example, who have gotten wealth perhaps from an inheritance, perhaps from a relative. All of these things that could happen. And there’s nothing to say it necessarily came from an illegal source.”
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— with files from The Canadian Press