4 ms·

Canada has a huge money laundering problem (source: my company makes anti money laundering tech). Interesting how the article shows how this translates to dest

by alfl 5y ago

Canada has a huge money laundering problem (source: my company makes anti money laundering tech). Interesting how the article shows how this translates to destruction of capital assets and, eventually, people. That’s not necessarily clear otherwise.

spurdoman77 5y ago
Probably all wealthy countries are big destinations for dirty money. Wouldnt make sense to bring dirty money to poor country because there it would attract more attention.
hellbannedguy 5y ago
I don't know about Canadian laws, but in the United States we let foreigners buy real estate with a phone call, or email. So basically we let foreigners buy our land. They can't live in the house/building, but they control the people whom do. We make it difficult for hard working Americans to buy a home, but let foreigners scoop it up with funny money? This has bothered me for years. Especially when it's not easy for Americans to buy foreign land. (Supposedly the government asks about the origin of the wealth before the sale now, but in my county (Marin County) it looks fishy. I have neighbors who don't speak a lick of english, but are living in mansions. My gripe isn't cultural. I just have doubts on the origin of the cash they buy houses/land/buildings with.)
- hippich 5y ago
  Isn't there like 30% immediate tax that is required to be withheld by the agent and then later buyer is responsible to file a return to attempt to get that money back? I am sure some do, but for the rest - it looks like it is a price paid to the USA for the privilege of owning real estate there.
  - Scoundreller 5y ago
    Local LLC owned by an offshore corp. Buy/sell the offshore corp, ergo no change in an US ownerships and poof, no withholdings. Actually, I think you can skip the LLC part. That becomes an issue if you want to later sell to a local, but if it's unaffordable to locals, who cares. Might be a non-issue if there's a tax-treaty reduction on withholding if the US was dumb enough to sign one with a tax haven (Canada does with Barbados and Bermuda) and you form the corp there. Not a lawyer/US resident/citizen.
- lotsofpulp 5y ago
  If you’re buying land in the US with a phone call or email, you are probably dealing with sufficient money to acquire an EB-5 Visa, so they can live in the US. Although, they did just increase investment amounts to $1.8M (and $900k for economically disadvantaged areas) from $1M/$500k, so the bar did get higher. https://www.uscis.gov/working-in-the-united-states/permanent-workers/eb-5-immigrant-investor-program https://www.uscis.gov/working-in-the-united-states/permanent...
- astrange 5y ago
  If you live in Marin homes aren't expensive because of foreigners. It's because Marin is full of ravenous NIMBYs who haven't allowed any homes to be built since 1970. Especially "foreigners are buying homes to leave them vacant" is not a real thing - that does nothing except lose them money.
  - Scoundreller 5y ago
    For the former, it could be both. Gold is valuable because you can't just survey and frame up more of it. And real estate starts functioning like that when you can't survey and frame up more in an area. A vacant home has made good money in any desirable area, for the past 10 years anyway.
motohagiography 5y ago
The missing simple description in the article is: Launderers with tainted money buy struggling businesses that have large assets as collateral for loans, and then walk away with the loan. It leaves the bank holding the asset to be sold off. From the launderer's value at risk perspective, $10m in dirty money is worth probably $5m or less clean, because if you taxed that $10m and did all the fees, and then there is the risk of being caught for the crime that generated it, 50% free and clear seems pretty good. The more I learn about the investment business, the more I think it's like crime without the violence. The money laundering problem in Canada is most obvious by the oversupply of certain retail businesses, but there are other scams I see on investment prospectuses more often than seems normal. The two problems I think is a lot of the launderers are politically connected, so there is no scrutiny, and even if leadership did something, it would only be to put even more of a burden on law abiding businesses. Imo, complex laws and regulations only affect the people who follow them, and they reward corruption.

by alfl 5y ago

spurdoman77 5y ago

Probably all wealthy countries are big destinations for dirty money. Wouldnt make sense to bring dirty money to poor country because there it would attract more attention.

hellbannedguy 5y ago

I don't know about Canadian laws, but in the United States we let foreigners buy real estate with a phone call, or email. So basically we let foreigners buy our land. They can't live in the house/building, but they control the people whom do. We make it difficult for hard working Americans to buy a home, but let foreigners scoop it up with funny money? This has bothered me for years. Especially when it's not easy for Americans to buy foreign land. (Supposedly the government asks about the origin of the wealth before the sale now, but in my county (Marin County) it looks fishy. I have neighbors who don't speak a lick of english, but are living in mansions. My gripe isn't cultural. I just have doubts on the origin of the cash they buy houses/land/buildings with.)

hippich 5y ago
Isn't there like 30% immediate tax that is required to be withheld by the agent and then later buyer is responsible to file a return to attempt to get that money back? I am sure some do, but for the rest - it looks like it is a price paid to the USA for the privilege of owning real estate there.
- Scoundreller 5y ago
  Local LLC owned by an offshore corp. Buy/sell the offshore corp, ergo no change in an US ownerships and poof, no withholdings. Actually, I think you can skip the LLC part. That becomes an issue if you want to later sell to a local, but if it's unaffordable to locals, who cares. Might be a non-issue if there's a tax-treaty reduction on withholding if the US was dumb enough to sign one with a tax haven (Canada does with Barbados and Bermuda) and you form the corp there. Not a lawyer/US resident/citizen.
lotsofpulp 5y ago
If you’re buying land in the US with a phone call or email, you are probably dealing with sufficient money to acquire an EB-5 Visa, so they can live in the US. Although, they did just increase investment amounts to $1.8M (and $900k for economically disadvantaged areas) from $1M/$500k, so the bar did get higher. https://www.uscis.gov/working-in-the-united-states/permanent-workers/eb-5-immigrant-investor-program https://www.uscis.gov/working-in-the-united-states/permanent...
astrange 5y ago
If you live in Marin homes aren't expensive because of foreigners. It's because Marin is full of ravenous NIMBYs who haven't allowed any homes to be built since 1970. Especially "foreigners are buying homes to leave them vacant" is not a real thing - that does nothing except lose them money.
- Scoundreller 5y ago
  For the former, it could be both. Gold is valuable because you can't just survey and frame up more of it. And real estate starts functioning like that when you can't survey and frame up more in an area. A vacant home has made good money in any desirable area, for the past 10 years anyway.

motohagiography 5y ago

The missing simple description in the article is: Launderers with tainted money buy struggling businesses that have large assets as collateral for loans, and then walk away with the loan. It leaves the bank holding the asset to be sold off. From the launderer's value at risk perspective, $10m in dirty money is worth probably $5m or less clean, because if you taxed that $10m and did all the fees, and then there is the risk of being caught for the crime that generated it, 50% free and clear seems pretty good. The more I learn about the investment business, the more I think it's like crime without the violence. The money laundering problem in Canada is most obvious by the oversupply of certain retail businesses, but there are other scams I see on investment prospectuses more often than seems normal. The two problems I think is a lot of the launderers are politically connected, so there is no scrutiny, and even if leadership did something, it would only be to put even more of a burden on law abiding businesses. Imo, complex laws and regulations only affect the people who follow them, and they reward corruption.