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Politics

Liberal whose B.C. law firm was tied to alleged Chinese gangster loses re-election bid

WATCH: NDP leader grills Prime Minister Justin Trudeau over "bare trust" real-estate deal facilitated by Richmond MP's law firm.

Liberal incumbent Joe Peschisolido has lost his bid for re-election in the Vancouver-area riding of Steveston-Richmond East to his Conservative challenger Kenny Chiu.

A Global News investigation from earlier this summer tied Peschisolido to a legal, though highly controversial, financial transaction that was facilitated by a lawyer who worked at Peschisolido’s Richmond, B.C., law firm.

READ MORE: Alleged gang kingpin may have used Liberal MP’s law firm to launder money through B.C. condo deal

The financial transaction was a “bare trust” deal that involved alleged Chinese gangster and convicted drug trafficker Kwok Chung Tam, who used Peschisolido’s law firm to facilitate a secretive Metro Vancouver real-estate development deal worth $7.8 million in 2011.

Chiu’s win was a big turnaround from the 2015 election, when Peschisolido won by six percentage points. On Monday, Chiu captured 42 per cent of the vote compared to Peschisolido’s 35 per cent.

READ MORE: Ethics commissioner investigating Liberal MP whose law firm was linked to alleged Chinese gangster

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Chiu is a software engineer who immigrated to Canada from Hong Kong and has served as school trustee in Richmond.

During the campaign, Chiu criticized the Liberal government for its response to housing affordability concerns in B.C. and for its handling of issues with the Chinese government. He said the government’s handling of the case of Huawei executive Meng Wanzhou has tarnished Canada internationally.

Meanwhile, the financial transaction facilitated by Peschisolido’s law firm was struck while Tam was still serving a conditional sentence for drug trafficking that stemmed from a 2006 police raid on his Richmond home. The deal allowed Tam to hide his ownership stake in a Coquitlam condo development.

Liberal MP says he has no knowledge of ‘bare trust’ real estate deal facilitated for alleged ‘drug boss’
Liberal MP says he has no knowledge of ‘bare trust’ real estate deal facilitated for alleged ‘drug boss’

At the time Global News reported these claims, Peschisolido denied any knowledge of the bare trust deal involving Tam. He also said he did not know Tam and that he was not familiar with how bare trust deals worked.

Peschisolido also said lawyers at his firm operated as independent contractors and that he was not aware of their specific business transactions.

READ MORE: Alleged ‘heavyweight’ gangster could be poster child for B.C.’s public inquiry into money laundering

Tam, meanwhile, has denied any involvement in organized crime. Police and immigration officials have alleged he was a member of the mainland China-based drug cartel The Big Circle Boys, however in federal court documents, Tam has said the allegations are completely untrue. The documents were submitted by his lawyers and the government as part of an ongoing immigration dispute.

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According to claims made by Canadian law enforcement officials between 1991 and 2014, Tam is a heroin importer, a chemical drug lab operator and a “known loan shark” with a history of violence.

Although Tam has faced multiple weapons- and drug-related charges, he has only been convicted of theft under $1,000, for which he received a pardon, drug trafficking for his role in a marijuana grow operation and possession of narcotics.