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>The whistleblower, whomThe Bureau is calling D.M., immigrated to Canada as an international student from India, making him a minority among mostly Chinese-Cana

>The whistleblower, whomThe Bureau is calling D.M., immigrated to Canada as an international student from India, making him a minority among mostly Chinese-Canadian co-workers at the Aurora branch. I mean it's real Chinese income backed by fake paperwork. There's PRC capital controls, rich PRC national who buy RE abroad are going to do it via laundering services and has been for decade+. Banks are fine with this and have dedicated branches in diasphora area to handle because the money is good and reliable. Sometimes rich Chinese immigrants also do odd jobs to fill time, bored aunties with multi million dollar mansions in Richmond working shifts at River Rock Casino. It's a bizarre world.

seanmcdirmid 3y ago
It could be real Chinese income backed by fake paper work (money laundering) or fake income backed by fake paper work (fraud). You can take out $50k per year, a lot more via exemptions, so you don’t need money laundering to get money out of china into the USA (I had to move a few hundred K before, all the paper work was legit).
- maxglute 3y ago
  I presume you were foreign national with more options. Options for diasphora Chinese, many who illegally hold dual citizenship and relies on PRC nationality to do transactions/capital flight in PRC is different. I highlighted the original quote where branch is mostly Chinese-Canadian for context. Aurora is 20% Chinese, it's a big diasphora neighbourhood. There isn't some big "fake chinese income" conspiracy, it's the entire (proven) business plan (money laundering) with occasional fraud. I think pretty much everyone knew Chinese are buying million+ propertiers with laundered money, and it fuels the bubble as much as any other foreign buyer.
  - seanmcdirmid 3y ago
    Ya, foreign nationals are allowed to export their earnings. But even Chinese citizens can also pool those $50k yearly allocations, it doesn’t take a lot of friends and family to do that. I’m not really sure what is happening among the rich, but among the middle class, it isn’t so much money laundering but having lots of savings with no good investment options, or just wanting to make money while someone else takes on the risk. They don’t have access to money that needs laundering.
    - jabbany 3y ago
      > But even Chinese citizens can also pool those $50k yearly allocations, it doesn’t take a lot of friends and family to do that. So as an observer of this, you will see money coming out of one place, spread to many accounts, wired overseas to different recipients, then re-aggregated... What do you think that looks like...? Surely not money laundering?
      - maxglute 3y ago
        Not on Canada's end, it's a bunch of people using legal capital controls to get money into Canada. On PRC end, it's evading capital controls, which depending on your geopolitical alignment, can be illegal activity. But if you're in the west, you want that Chinese money. Free money from competitotrs as good as brain drain from competitors.
        seanmcdirmid 3y ago
        Capital controls have bad intentions anyways, I have no qualm with PRC citizens trying to avoid them. Not everyone in the west wants or likes Chinese money. It does lead to them basically exporting their bubble abroad, but Japan did the same in the 80s before their big bust.
        jabbany 3y ago
        Yup. Hence the capital control (less money leaking out means an easier recovery after the bust). Of course, as is rational in capitalism, this just makes it even more urgent to skirt the capital control, lest you be caught with the burden of the bust. This was also why crypto was even an option for doing this, for a short while at least.
        maxglute 3y ago
        Yes, PRC citizens avoiding capital controls end up playing on the same field as other global wealth. I think PRC exporting their bubble is over stated - 10s of millions of tier1 buyers got into the speculation/RE game early in 90s that they'd be millionaires with wealth to enter western RE game regardless where PRC RE market stablizes. And there are just millions of millionaires in China, independant of wealth from RE bubble. Many buyers are simply independantly wealthy from other business ventures ontop of having multiple tier1 units to liquidate to buy western RE. The folks buying million+ dollar properties and 100k cars in the last few years didn't liquidate everything they have in PRC to start new life in Canada. Canada is a retirement plan they bought with change. Sure not everyone wants PRC money, but the sellers certainly do, as do the intermediates who benefits from PRC capital flight.
- jabbany 3y ago
  > You can take out $50k per year Try buying a house with 50k a year... This is exactly what the "scheme" solves. You have new immigrants who have (in many cases) legitimate money (e.g. by selling property back in china) but cannot move it out of the country quickly due to capital controls on the chinese side. Since mortgages are meant to spread out costs over time, it's the perfect solution. However, banks (understandably) care about income rather than existing capital. So you have a lot of "safe" customers who are unlikely to default and less sensitive to interest rates (compared to the local borrower pool), and banks looking for customers amidst high interest rates... You can see how something like this can easily arise from these conditions... > you don’t need money laundering to get money out of china into the USA I cannot comment on what your situation was (maybe through a business?), but AFAIK it is very hard to move capital out for regular individuals. Your realistic options to wire out capital are just "education" and "tourism". While technically you can claim "investment", it will almost always not be approved and cause a watch to be put on all your accounts. That being said, usually documentation of the funds outside of china is completely legitimate and above board. There is no need to fake this. The only paperwork magic that needs to happen is towards the chines government... However, it still _looks_ like money laundering because you can only wire $50k a year, so many need to resort to wiring from accounts of different individuals (friends and family) to different individuals, despite the funds already being fully documented and reported outside china.
  - seanmcdirmid 3y ago
    Foreigners on Z visas can wire out whatever they earn, so for me it wasn’t an issue. There are even foreigners who rent out some of their allocations since you always have PRC expenses, but this is of course illegal. I used my wife’s $50k allocation once because I was held up by some paper work (you need a lot of paper work, notarized, etc…). They didn’t ask any questions about what it would be used for, but this was 2016, and they changed the rules a few months later.
    - jabbany 3y ago
      Foreigners are not fully exposed to the local market though, so there's no need to do capital controls. _Income_ is never an issue, as there are taxes to cover that. The main thing being cracked down on is people moving accumulated _wealth_ out. Also, things have changed _considerably_ since 2016 (as these things tend to do). Indeed, nobody --- foreign or domestic --- needed to document use as long as you stayed within the $50k (you would be asked to if you went above that). Later it became a mandatory question, but wasn't enforced. These days it is enforced rather strictly. If you claim education, you need to provide statements of tuition and housing etc. For tourism there's similar requirements, and usually they limit discretionary spending budgets to ~$10k.
huhtenberg 3y ago
> has been for decade+ Try 25 years. Started right after the Hong Kong transition from under the British rule.

seanmcdirmid 3y ago

It could be real Chinese income backed by fake paper work (money laundering) or fake income backed by fake paper work (fraud). You can take out $50k per year, a lot more via exemptions, so you don’t need money laundering to get money out of china into the USA (I had to move a few hundred K before, all the paper work was legit).

maxglute 3y ago
I presume you were foreign national with more options. Options for diasphora Chinese, many who illegally hold dual citizenship and relies on PRC nationality to do transactions/capital flight in PRC is different. I highlighted the original quote where branch is mostly Chinese-Canadian for context. Aurora is 20% Chinese, it's a big diasphora neighbourhood. There isn't some big "fake chinese income" conspiracy, it's the entire (proven) business plan (money laundering) with occasional fraud. I think pretty much everyone knew Chinese are buying million+ propertiers with laundered money, and it fuels the bubble as much as any other foreign buyer.
- seanmcdirmid 3y ago
  Ya, foreign nationals are allowed to export their earnings. But even Chinese citizens can also pool those $50k yearly allocations, it doesn’t take a lot of friends and family to do that. I’m not really sure what is happening among the rich, but among the middle class, it isn’t so much money laundering but having lots of savings with no good investment options, or just wanting to make money while someone else takes on the risk. They don’t have access to money that needs laundering.
  - jabbany 3y ago
    > But even Chinese citizens can also pool those $50k yearly allocations, it doesn’t take a lot of friends and family to do that. So as an observer of this, you will see money coming out of one place, spread to many accounts, wired overseas to different recipients, then re-aggregated... What do you think that looks like...? Surely not money laundering?
    - maxglute 3y ago
      Not on Canada's end, it's a bunch of people using legal capital controls to get money into Canada. On PRC end, it's evading capital controls, which depending on your geopolitical alignment, can be illegal activity. But if you're in the west, you want that Chinese money. Free money from competitotrs as good as brain drain from competitors.
      - seanmcdirmid 3y ago
        Capital controls have bad intentions anyways, I have no qualm with PRC citizens trying to avoid them. Not everyone in the west wants or likes Chinese money. It does lead to them basically exporting their bubble abroad, but Japan did the same in the 80s before their big bust.
        jabbany 3y ago
        Yup. Hence the capital control (less money leaking out means an easier recovery after the bust). Of course, as is rational in capitalism, this just makes it even more urgent to skirt the capital control, lest you be caught with the burden of the bust. This was also why crypto was even an option for doing this, for a short while at least.
        maxglute 3y ago
        Yes, PRC citizens avoiding capital controls end up playing on the same field as other global wealth. I think PRC exporting their bubble is over stated - 10s of millions of tier1 buyers got into the speculation/RE game early in 90s that they'd be millionaires with wealth to enter western RE game regardless where PRC RE market stablizes. And there are just millions of millionaires in China, independant of wealth from RE bubble. Many buyers are simply independantly wealthy from other business ventures ontop of having multiple tier1 units to liquidate to buy western RE. The folks buying million+ dollar properties and 100k cars in the last few years didn't liquidate everything they have in PRC to start new life in Canada. Canada is a retirement plan they bought with change. Sure not everyone wants PRC money, but the sellers certainly do, as do the intermediates who benefits from PRC capital flight.
jabbany 3y ago
> You can take out $50k per year Try buying a house with 50k a year... This is exactly what the "scheme" solves. You have new immigrants who have (in many cases) legitimate money (e.g. by selling property back in china) but cannot move it out of the country quickly due to capital controls on the chinese side. Since mortgages are meant to spread out costs over time, it's the perfect solution. However, banks (understandably) care about income rather than existing capital. So you have a lot of "safe" customers who are unlikely to default and less sensitive to interest rates (compared to the local borrower pool), and banks looking for customers amidst high interest rates... You can see how something like this can easily arise from these conditions... > you don’t need money laundering to get money out of china into the USA I cannot comment on what your situation was (maybe through a business?), but AFAIK it is very hard to move capital out for regular individuals. Your realistic options to wire out capital are just "education" and "tourism". While technically you can claim "investment", it will almost always not be approved and cause a watch to be put on all your accounts. That being said, usually documentation of the funds outside of china is completely legitimate and above board. There is no need to fake this. The only paperwork magic that needs to happen is towards the chines government... However, it still _looks_ like money laundering because you can only wire $50k a year, so many need to resort to wiring from accounts of different individuals (friends and family) to different individuals, despite the funds already being fully documented and reported outside china.
- seanmcdirmid 3y ago
  Foreigners on Z visas can wire out whatever they earn, so for me it wasn’t an issue. There are even foreigners who rent out some of their allocations since you always have PRC expenses, but this is of course illegal. I used my wife’s $50k allocation once because I was held up by some paper work (you need a lot of paper work, notarized, etc…). They didn’t ask any questions about what it would be used for, but this was 2016, and they changed the rules a few months later.
  - jabbany 3y ago
    Foreigners are not fully exposed to the local market though, so there's no need to do capital controls. _Income_ is never an issue, as there are taxes to cover that. The main thing being cracked down on is people moving accumulated _wealth_ out. Also, things have changed _considerably_ since 2016 (as these things tend to do). Indeed, nobody --- foreign or domestic --- needed to document use as long as you stayed within the $50k (you would be asked to if you went above that). Later it became a mandatory question, but wasn't enforced. These days it is enforced rather strictly. If you claim education, you need to provide statements of tuition and housing etc. For tourism there's similar requirements, and usually they limit discretionary spending budgets to ~$10k.

huhtenberg 3y ago

> has been for decade+ Try 25 years. Started right after the Hong Kong transition from under the British rule.