Chinese courts pursue dodgy to Vancouver

From the Vancouver Sun:

Lawyers in Vancouver say they are seeing a substantial increase in B.C. court cases filed by Chinese companies seeking to seize real estate assets from Chinese immigrants in B.C.

The Chinese plaintiffs are asking B.C. judges to enforce monetary judgments awarded in Chinese courts. These Chinese rulings typically involve people found in China to have defrauded Chinese banks or business partners and then fled to Canada with the money and invested in real estate here.

The rapid rise in the numbers of Chinese cases in Canada and the U.S. — two preferred destinations, according to the Chinese government, for financial fugitives — has also been recognized by Dan Harris, a Seattle lawyer who advises international law firms on strategies for recovering assets from Chinese defendants.

Such cases have been trickling into B.C. courts for several years, including a 2015 B.C. Supreme Court award of $670 million to the Bank of China against money allegedly laundered through buying multiple homes and setting up bank accounts in Richmond.

But, according to Vancouver lawyer Christine Duhaime, a precedent-setting case in June appears to have opened the flood gates.

Duhaime says that after her client, China Citic Bank, won a so-called Mareva injunction from B.C. Supreme Court, prohibiting the sale of four Vancouver-area homes worth $7.2 million, calls from China poured in. The homes belong to a couple who were alleged to have “fled China” with an unpaid $10-million loan.

Duhaime says she understands this is the first case of a Mareva injunction, also called a freezing order, being won by a Chinese bank in North American courts. Such injunctions prevent assets from being sold before a court can rule on whether they should be used to repay a court award.

Based on the case, Duhaime says she has obtained information from China alleging that “billions of dollars” of bank fraud proceeds are invested in B.C. real estate. She said she could not share the documents for reasons of client privilege.

“The (Citic) Mareva case absolutely increased the interest in China, and caused a number of banks in China to reach out to us and say ‘We have all these cases. Can we do something in B.C., too?’” Duhaime said. “There is lots of cases coming down the pipe, and there is lots of appetite in China from the government, down to the banks, to come to B.C. to enforce judgments.”

Talk about bonfire of the vanities. Canadians are no doubt chuffed that Communist Chinese courts are offering them protection from dodgy money launderers in a property market that has been betrayed by its own liberal democratic principles. Or, at least, those on the take that pretend to defend it.

David Llewellyn-Smith
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Comments

    • Yes, and real estate isn’t something you could hide… If they wanted store their ill gotten gains, they would have faired better with gold bars in safety deposit boxes.

      • Probably difficult for an amateur to do. Buying $500k (a 1 bed studio in Sydney?) of gold would draw attention almost anywhere, and if you try to do it through backchannels how can you be sure you’ve gotten what you paid for? Its also a “holder is owner” product, whereas property has a register.

      • Nah, you can hide ownership of real estate. Enough offshore shelf companies and trust structures should do it.
        Failing that is the use of front men.

      • Gramus, as Fek said, shell companies et al are not for amateurs. Small time crooks are the issue here and their booty is at best measured in the low six digits. They can´t afford nor consider essential the annual fees of these shady accountants. I suspect most purchases have been done on the cheap hoping Beijing will not cast the net too far. I guess the Chinese gov is tired of bailing out banks just so a bunch of lowly officials run with money to hide in bricks. If they get traction, I can expect many dodgy accountants and lawyers turning on their former customers as soon as they feel the peak.

  1. “Lawyers in Vancouver say they are seeing a substantial increase in B.C. court cases filed by Chinese companies seeking to seize real estate assets from Chinese immigrants in B.C.”

    Another reason to tax foreign investors heavily. How much will all this court time cost the resident taxpayers of Canada?

    • Court costs are paid by either the plaintiff or defendant. Could be a nice source of income for the country!

      • We could even be proactive about it. Supply them with a list of names we could prosecute for a fee. Say 20% of asset value.

      • Speedy courts could be popular. If you are caught, do you want to be left destitute by the hug of the panda? Better hand the keys back quickly!

  2. Hyperthical: If Chinese residents from the communist motherland venture overseas and purchase property using fraudulent funds, and those properties are then seized… do they become the property of the china state itself or are they required to liquidate said properties?

    like a hostile takeover of a country without wars…yet

  3. a substantial increase in B.C. court cases filed by Chinese companies seeking to seize real estate assets from Chinese immigrants in B.C

    Citizen: We are worried about Chinese buying our houses and making them unaffordable for hard-working local kids. What will you do about it?

    Politician: Don’t worry. You are just being racist.

    2011) Don’t worry. You are just being racist. There are very few Chinese here. The census from 2001 proved that.
    2012) Don’t worry. You are just being racist. Statistics show that 99% of Vancouver houses are owned by Canadians.
    2013) Don’t worry. You are just being racist. Sure, many Auctions are being won by people of Chinese race. But these are probably Canadian-born people with Chinese ancestors.
    2014) Don’t worry. You are just being racist. It is true that Chinese interpreters are present to assist many auction winners. The buyers are probably recent immigrants keen to bring their skills to Canada and help improve the economy by hard work. Canada is a country built on immigration and immigration is essential to the economy and an unracist society. Besides, we don’t actually collect the data on who owns Canadian land. We have always assumed it would work out all right in the end.
    2015) Don’t worry. You are just being racist. It is true that Chinese do own most of the houses and many are kept empty. But these are very frugal people who simply outsave the average Canadian. Most of them report a very low income. They must be exceptionally good savers to be able to save-up the suitcase of cash they used to buy the house. As to being empty, it is their house, they can do with it what they want.
    2016) Don’t worry. You are just being racist. It is true that some of these Chinese do have irregularities with their tax affairs, but since they are Chinese it WOULD BE RACIST to enforce Canadian law.
    http://www.theglobeandmail.com/real-estate/vancouver/out-of-the-shadows/article31802994/
    2017) ?

  4. Even the legit’ could get caught out if there are a lot of cases as property prices will tumble as all the dodgy dealers try to sell their houses before they get a court order to freeze them! No wondera lot were happy to pay over the odds with money stolen from the banks! Though as the court judgments have to come from Chinese courts those well connected to the CCP will get to keep their homes, no doubt.

  5. Gee those Chinese “investors” should come here. With our weasel lying politicians in govt, all working hard to keep high house prices for the benefit of the country there is no way they would allow a court judgement to occur against them. Why i bet Bob carr himself would represent them all free of charge.
    And of course it would be racist to allow a court judgment against them.

    • It would be racist to put a criminal in jail.

      Criminals from the 3rd world should be exempt from complying with the law.

      • Yes, because we need to remember that their criminal behaviour is simply a natural response to the oppression they have suffered at the hands of western, white middle class males.

  6. Another great photo. I love it that he is in front of the sign for the toilet!

    This news will make millions of ordinary Chinese who are not on the take, and are quite pissed off that their fraudulent fellow ‘citizens’ have so far managed to escape with their ill-gotten gains to the relative safety of the west, really happy. If this is the start of a trend gazillions of litres of baijiu would be drunk in celebration.

    There is real, deep and lasting anger at the financial and social injustice that this type of fraud has occurred. Long may it continue!

  7. Only matter of time before they kick-start same in Oz and NZ. I really want to see how our politicians will respond.

  8. TailorTrashMEMBER

    I still think we should welcome a contingent of Chinese police to Australia ( and give them a floor of the AFP building in Canberra ) and let them go for it with the crooks that are hiding here too . It appears the only way any action will happen cos our authorities sure don’t seem capable or interested ……….and the Chinese police could hardly be called racist persueing all those brand new just purchased Australian
    Citazens who committed crimes in China

  9. These prosecutions should be followed up with a bit of that famously rapid Chinese justice ie “March in the guilty bastard. You’re guilty, you bastard”….sound of gunshot…sound of high-pitched whining as saws and drills are used to harvest organs….”March in the next guilty bastard….” etc…