Police in Surrey are investigating a suspicious vehicle fire.

Police were called after Surrey Fire Department responded early Saturday morning to reports of a car on fire at a residence in the 12400-block 113B Avenue. 

The fire spread from the car to the exterior of the home it was parked beside, police said in a statement.  

The vehicle was completely destroyed by the fire, but firefighters were able to extinguish the blaze with only minor damage to the residence. 

The fire’s exact cause is unknown. Detectives are asking anyone who may have witnessed a person near the vehicle before the fire or fleeing from the area around 5 a.m. Saturday morning to call the Surrey RCMP at 604-599-0502.

Experts say that money laundering, fraud and tax evasion in B.C.’s speculative real estate market could be impossible to tackle unless agency information silos are broken and enforcement is increased with high-tech efficiency.

Concerns first reported by The Province in August 2015 that Vancouver’s property market is at risk of being flooded with dirty cash were confirmed after a six-month review by Fintrac, Canada’s anti-money laundering agency. Fintrac audited about 80 real estate firms in Vancouver and found 55 companies had “significant deficiencies” in the way they report the identities and money sources of investors.

Spokesman Darren Gibb said findings show Vancouver homes can be used to launder money.

In addition to Fintrac’s findings, The Province and other media have uncovered cases showing that realtors, unlicensed brokers and circles of investors are involved in shady flip deals which can allow investors to launder money and dodge taxes while insider agents score excessive fees and rip off clueless sellers.

Prominent West Vancouver realtor Grant Connell told The Province he recently came across a Lower Lonsdale condo deal in which a realtor represented both the buyer and seller in an unlisted sale, and seems to have caused the seller to lose $500,000.

“She sold it for $700,000 and shortly after an identical unit in the building was sold for $1.2 million,” Connell said. “I am tired of my clients and other vulnerable, unsuspecting people getting screwed.”

Dan Zitting, chief product officer for Vancouver “big data” analytics firm ACL, is an expert on detecting patterns of crime in vast pools of data. In interviews, he explained his fears of widespread fraud in B.C.’s property market, and how Canadian agencies could start tackling it.

“Vancouver real estate is obviously at very high risk for being used as a transfer and holding vehicle for laundered money,” said Zitting, adding that the results of Fintrac’s compliance review “really is quite scary, both for the stability of the housing market and the potential to support and propagate issues of organized crime.”

Zitting said Fintrac’s compliance review is a good start, but the information should be shared among other agencies and “across the entire population of real estate records and transactions.”

Every B.C. real estate deal piles up records from realtors, mortgage brokers, bankers, notaries, lawyers, buyers, sellers and industry overseers. In isolation these records are just noise. But by combining all records in a smart software program and “asking the right questions” of the data, bad deals and bad players automatically rise to the surface, and a big picture emerges.

Software would flag questionable deals for further investigation, as opposed to the current system in which various agencies get tips and do one-off investigations.

In limited cases, Fintrac and the CRA say, they are allowed to share information with other agencies, but it is clear that these agencies generally operate in silos, or “black holes” of information, as NDP MLA David Eby describes Fintrac.

The CRA employs data-analytics in some cases, but there is not a system in which relevant agencies freely share real estate records to gain the omniscient anti-fraud overview that Zitting’s firm is advocating.

Proof is in the lack of enforcement. In the past five years the CRA has prosecuted one man, Dr. Raymond Ambrose Liang, for $365,000 in unreported income from four assignment clause flips and a condo sold through a shell company. Fintrac has fined only seven realtors across Canada, ever.

“Until those risk indicators are automated and the red flags are investigated, and ultimately prosecuted as crimes, it may be nearly impossible to actually change the behaviour,” Zitting said.

As an example of how data from different sources can be crossed-referenced to make suspects pop up, Zitting pointed to B.C. Hydro utility transactions and property transactions. Names, addresses and power amounts used over certain periods could be compared to the identities of individuals involved in real estate deals at these properties to develop alerts around suspicious investment, Zitting said.

In another example, transactions could be tested to show where the same buyer and seller are involved in multiple transactions — a tipoff for collusion in flipping schemes. Also, if certain realtors are repeatedly involved with certain investors, transactions would be red-flagged.

A test for valid buyer address is an extremely simple screen that would be triggered when realtors record the buyer’s address as a shell company or an address that matches the realtor’s brokerage, which raises money-laundering concerns.

Similarly, properties that see excessive transactions or tend to have multiple payouts connected to each transfer — indicating that they are being used as hot potato investment vehicles rather than homes — could be hot-listed and cross-matched with suspect players.

“You see if there is a systemic problem, and how wide or deep it is,” Zitting said.

Eby said data analytics could be used to better identify fraud in B.C. real estate, but he is worried that police forces don’t have the financial crimes staffing to investigate even the known cases.

“I was disappointed to see the significant non-compliance by realtors, found by Fintrac,” Eby said. “Police should be knocking on the door of these brokerages and saying, ‘Who are you taking money from and why are you hiding it?'”

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Residents of a Lower Lonsdale condo tower are concerned their home values could be harmed by the unusual below-assessed value sale of a vacant unit owned by investors from China.

In late March, North Shore realtors including Grant Connell noticed what they perceived as irregularities in a deal for the condo unit 1901 at 151 West 2nd St. in North Vancouver, which was listed for $700,000 and sold in one day for $730,000 according to an MLS filing.

Connell said that shortly after unit 1901 was sold, an “identical” unit in the building was sold for $1.2 million.

According to emails reviewed by The Province, Connell and his colleagues believed the property was under-priced by about $500,000, thus harming the seller, and also devaluing property for other unit owners in the building.

“Apartment sales are all based on comparables within your building,” Connell told The Province.

The unit in question was built in 2005, has a 1,104 square-foot floor plan and a balcony view over the Burrard Inlet to Vancouver’s skyline. It was sold on March 19 by Mandy Wingman Siu, according to an MLS document.

The realtor represented both the buyer and the seller. In real estate this is known as “double-ending” a sale, and some experts say the practice raises questions about how a realtor can fairly serve both buyer and seller.

The MLS sale record for unit 1901 says its days on the market was “0” and its previous price was “$0.”

In a letter sent to The Province, the owner of unit 1801 in the same building, Mr. R. Thompson, called for an investigation into the deal.

“The Lower Lonsdale suite cited was listed at $700,000 and was not only listed within days of an identical suite two floors up selling for $1,280,000, but just weeks after a suite a floor below sold for $1,100,000,” Thompson wrote.

“The listing realtor … knew or ought to have known what the same floor plan in the same building was worth.”

The seller of unit 1901 is listed as “J. He, J. Li” on the realtor’s MLS form. The form says “seller is aware … listing below assessment value.”

In an interview Saturday, Thompson said unit 1901 has had three owners since 2005, and a couple from China reportedly bought it for about $765,000 from the second owner about five years ago.

The unit has been mostly vacant except for a period several years ago when a student resided there, he said. He said neighbours are filled with “wonderment” at the sale of unit 1901 and there is concern the deal will “confuse” market pricing.

“About three weeks ago my realtor called me and said ‘Someone just lost $500,000.’ She said she could have sold it at least for $1.1 million,” Thompson said.

“This is world-class stuff. You’re looking out my window at Vancouver.”

The Province reached the listing realtor, Mandy Wingman Siu, in a brief phone call on Saturday. Siu was asked why unit 1901 was sold for $730,000, and whether she is aware that other owners in the building are concerned unit values could be impacted.

Siu said that she would prefer that her brokerage respond, but offered a quick explanation.

“This is not a normal sale,” Siu said. “The buyer and the seller know each other.”

Siu’s brokerage did not respond by deadline Saturday.

Connell told The Province that he was contacted by Maureen Coleman, head of investigations for the Real Estate Council of B.C., after Coleman read his initial comments about the Lower Lonsdale deal in a Province story on Friday.

Coleman could not be reached by The Province on Saturday.

Meanwhile, on Friday afternoon the Real Estate Council announced it is increasing its investigative capacity and will employ private eyes to probe cases with significant risk to the public.

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In a private speech to the B.C. Real Estate Association, the province’s top financial regulator warned realtors “your business is dead” if the public loses trust.

Superintendent of real estate Carolyn Rogers also said she is “worried” that risk conditions prevalent in B.C.’s housing market are “creating many other risks” across the financial system.

The text of the March 31 address by Rogers was obtained by The Province.

Rogers oversees a number of sectors as the chief of the Financial Institutions Commission (FICOM).

What is striking in her speech to the association, whose members are regulated by the B.C. Real Estate Council, is how concerned the government is about systemic risks connected to real estate, and Rogers’s warning that the industry’s “privilege” of self-regulation is in danger.

Rogers told realtors this was only her second visit to an association meeting in six years as FICOM’s chief.

“The fact that I didn’t spend a lot of time focused on your sector was a sign that you were very low on the list of things I worried about,” Rogers said. “Well, I’m back. And I am worried.”

Rogers told the association she has “spent little time on anything but your sector in the last two months,” but she said other sectors face similar concerns. “The conditions that have (bred) the issues in your sector of late are affecting many areas of the financial sector that we regulate, and creating many other risks,” Rogers said.

“But your sector has captured the attention of the media, and in turn the attention of the public and the politicians.”

Rogers stressed it is false for realtors to dismiss media scrutiny by saying, “This is just a few bad apples.”

“Let me be clear — we have a problem and it’s not the media,” Rogers said.

“Your business rests on the public’s trust. You handle what is, for most, the single largest financial transaction they will ever make. If they don’t trust you to act in their interest, your business is dead.”

British Columbia’s superintendent of real estate Carolyn Rogers.

The speech came in the early stages of a special panel review of industry problems including widespread failures to report identities of clients, leading to money-laundering concerns, and allegations that realtors are colluding with certain clients to scam home-sellers in so-called assignment clause flipping schemes.

Rogers told the association on March 31 the panel “has met several times now and I would describe us as still firmly in the information gathering stage.” Nevertheless, in early April the panel filed an “interim report.”

In an interview Tuesday, Rogers said the panel is moving toward increasing fines and penalties on rogue realtors who see minor fines “as a cost of doing business” in Vancouver’s soaring market.

In her speech, Rogers hammered the point that too many realtors are failing in their duties of self-regulation, which “like any great privilege, comes with great responsibility.”

She said she has heard numerous reasons why realtors do not report on bad actors, including fear of reprisals from colleagues or firing by bosses, but these excuses are “not acceptable.”

“Self-regulation works when an industry holds itself to a higher standard than anyone else does,” she said. “Self-regulation puts on each of you a positive obligation to report any, and all bad behaviour — anything that has the potential to harm the public — there are no exceptions.”

On that point, Rogers told reporters Tuesday that the panel may look at redefining the council’s oversight, which sometimes overlaps with that of various real estate boards. Rogers also said the panel could examine whether “double-ending” — having a realtor represent both buyer and seller in a sale — is a fair practice that should continue in B.C.

NDP MLA David Eby

NDP MLA David Eby, a critic who says the council is not capable of self-regulation, said the message of Rogers’s speech is, “There can’t be a conspiracy of silence.”

Eby said, though, he understands why realtors are not confident in reporting others to the council, because it mostly seems to issue wrist slaps in punishment.

“There are no consequences, except professional consequences,” Eby said. “Someone pays a $1,000 fine and then comes back to work and makes your life miserable. So until more licences are cancelled, that is the problem.”

Eby said he believes the risk factors Rogers spoke of in the speech include B.C. banks that are currently issuing 50-per-cent mortgages to offshore buyers with no proof of income, which raises concerns of exposure to bad debt and money laundering.

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A Chinese tycoon found butchered last year in his West Vancouver mansion has been linked to a government corruption scandal in southwestern China.

The scandal, which led to a 19-year jail term for Yunnan province official Lin Yunye, is also tied to a Chinese couple who at one time owned an abandoned multimillion-dollar Vancouver home. 

Yunye was jailed last November for selling $234 million in state mining assets to a number of businessmen from whom he accepted tens of millions in bribes — including gold bars, luxury watches and rhinoceros horns.

Yunnan, where Yunye was deputy director of land and resources, is a province of lush, bamboo-covered mountains. It is also known as China’s gem-trading hub because of its border with Myanmar, a failed state with bounties of ruby and jade stones that are illicitly smuggled into Yunnan.

Gem exchanges, $50,000 gold bars, a $500,000 bribe, and deals benefiting two Vancouver-area tycoons feature in the lengthy record of charges proven against Yunye in Yunnan Provincial Court. The verdict states Yunye abused his power from 2007 until his arrest in 2014.

Chinese millionaire Gang Yuan was found slain at his home in West Vancouver on May 2, 2015. (Submitted)

But Yunye’s 38-page verdict tells a different story.

In early 2010 Yunye met Yuan, then director of Beijing Datang Investment, in a restaurant in Yunnan’s capital city, Kunming. At stake was a contract for Yuan’s firm. Over dinner he asked Yunye to permit Beijing Datang expanded coal mining rights on a Yunnan mountainside.

As the men dined, Yuan handed Yunye a bag that contained a 1,000-gram gold bar, worth about $50,000. In exchange, Yunye gave Beijing Datang rights to mine in Yunnan until April 2014. And Yuan’s company later provided Yunye with additional gold bullion gifts, the verdict states, for more mining permits. Yuan was named as a witness in the verdict, but not charged.

Meanwhile, back in Vancouver in 2010, Yuan bought a $5-million British Properties home, adding to his numerous B.C. assets including a private island and a vacant $14-million Shaughnessy mansion. The West Vancouver home was purchased in the names of relatives Li Zhao and his wife, Gang Yuan’s cousin, court filings say. Zhao now is charged with Yuan’s slaying, and Yuan’s estate is the subject of a court battle between relatives in China and Vancouver, and his numerous mistresses and illegitimate children.

Gang Yuan’s private island has been used as a set on the reality show Ultra Rich Asian Girls.

Zhao’s criminal case continues, and no allegations in the criminal or civil case concerning Yuan’s assets have been proven in court.

In another twist, Yuan’s West Vancouver home, private island and Bentley have been used as set pieces in the Vancouver reality TV show Ultra Rich Asian Girls. The daughter of alleged murderer Li Zhao is a star of the show, in which she claimed to own Yuan’s assets.

Huaican Ren, the other known Vancouver-area tycoon who testified against Yunye, is worth about $400 million, according to Forbes China. Ren reportedly made his fortune in gem trading before founding a number of Yunnan-based real estate and tourism companies, including North Star Enterprise Company Limited.

The Province first reported in early February that Ren and his wife Xuepei Sun possess two Vancouver homes worth about $10 million, including a home in the 4100-block West 8th Avenue bought for $4.6 million in July 2011. Neighbours said the Chinese owners have never been seen in the rotting Point Grey home, which was cited in a City of Vancouver “untidy premises” order in June 2015.

The Yunnan verdict says that in 2013 Ren invited Yunye’s family to a dinner meeting. Yunye asked Ren if he could help Yunye’s wife with her personal business, and Ren immediately agreed, Yunye testified.

Yunye’s wife testified that after the dinner meeting, Ren invited her to North Star’s offices to discuss business. It was proposed that she sell several gems to him. Ren testified that he felt the gems were not worth much, but after negotiations he paid a large sum. He claimed he was afraid that Yunye would be offended if he paid too little, and the official would not permit North Star’s massive state-land tourism development, Ancient Dian Kingdom amusement park.

The final verdict states that Ren’s version of the gem deal could not be confirmed, but that documentary evidence showed that in September 2013 he made a 2.48 million RMB ($500,000 Cdn) cash payment to Yunye’s wife, in exchange for a construction permit. Subsequently, “the state-owned construction land use right transfer contract,” for North Star’s “Ancient Dian Kingdom Investment and Development Co.,” was confirmed for the June 2013 to January 2014 period. Ren was not charged for bribery.

Underlying the disturbing evidence in Yunye’s verdict is a big-picture story about how business is conducted in China as its economic system changes from communism to crony capitalism.

Reporting on Yunye’s November 2015 sentencing verdict, Chinese financial journal Caijing wrote: “The time period during which Lin (Yunye) was in charge of land resources coincides with the period featuring nationwide integration and acquisition of mineral resources. Aside from (Yunye), most corrupt officials in Yunnan have more or less intervened in the restructuring of mining companies, leading to the fire sale of many large state-owned mines and the loss of state-owned assets.”

And an April 2014 report from Yunnan business website GoKunming says that “while China’s economy slows after two decades of explosive growth” Yunnan strongly promoted tourism and real estate development to reignite growth.

“Fuelling investment numbers are several enormous projects aimed at expanding Yunnan’s already thriving travel industry to places that the government has deemed underdeveloped,” GoKunming reported. “Perhaps the largest of these is (North Star’s) sprawling Ancient Dian Kingdom, a $3.5 billion USD amusement park which covers more than 6,000 acres.”

Ren is from Wenshan, a state of Yunnan, and reports from China highlight his connections to Yunnan and Wenshan officials. For example, a Wenshan State website shows a picture of Ren and his wife “Mrs. Xuepei Sun” donating 10 million yuan ($2 million Cdn) for disaster relief to state Governor Huang Wenwu in 2010. In the ceremony a state party committee director declared Huaican Ren a friend of Wenshan’s government.

Chinese investment statements filed for Kunming North Star Enterprise Company Limited say that Ren is chairman, and a Chinese citizen with permanent resident status in Canada. According to the Global Real Estate Institute, Ren is among “the world’s leading real estate players.”

As for Ren’s Point Grey property, it was listed for sale about 10 days after The Province exposed its decrepit conditions.

It appears to have been sold for $6.5 million on March 3 according to MLS documents. But over a month later, a new owner has yet to be registered on title.

B.C. land title documents say that Ren and his wife bought the Point Grey home for $4.6 million in 2011 through a property transfer executed in a Beijing law office. The previous owner, Chinese investor Wei Min Zhang, flipped the home after buying it for $3.35 million in 2010.

According to MLS documents, Wayne Du was the listing agent for seller Wei Min Zhang in 2011, and George Xia was buyer agent for Huaican Ren. MLS records show the same two realtors involved in the March 3 sale. This time, however, George Xia is the listing agent for Huaican Ren, and Wayne Du is listed as the agent for an unidentified buyer. Legally, Huaican Ren is still owner until a notary or lawyer files transfer documents, B.C. land title office staff said.

B.C. Notary Society counsel Ron Usher — who is a member of the B.C. Real Estate Council panel investigating so-called “shadow flipping” — said he can’t determine the status of the Point Grey home sale.

“We can’t really tell anything from the MLS data,” Usher said. “Has any money changed hands? We don’t know.”

Li Zhao, the West Vancouver man charged in the horrific butchering of a Chinese mining tycoon, may have registered a $14,000 donation to the B.C. Liberals just days after the crime.

The victim, Gang Yuan — a multimillionaire who has been linked to a bribery and corruption scandal in China’s Yunnan province — was found allegedly chopped into 100 pieces at his British Properties mansion on May 2, 2015.

Yuan lived at the mansion with his cousin Xiao Mei Li and her husband, 55-year-old Li Zhao. Legal filings say that on May 8, 2015, Li Zhao was charged with murdering Yuan and “interfering” with his corpse.

B.C. Elections donation records show that on May 12, 2015, 10 days after Yuan’s remains were found, a man named Li Zhao paid $14,000 to the B.C. Liberal Party. The donor Li Zhao also paid $1,000 to the B.C. Liberal Party in a Vancouver riding in May 2005, election records show.

As election records only show the English language spelling of Li Zhao — rather than the Chinese characters — public documentation can’t confirm that it is the same man charged in Gang Yuan’s murder.

A review of B.C. property and financial documents only showed one Li Zhao with millions worth of assets living in the Lower Mainland.

A battle for the control of Yuan’s estimated $50-million estate continues in court. Yuan’s family from China has alleged that Li Zhao and his family had “unjustly enriched” themselves. Court filings say Yuan bought the West Vancouver home where he was murdered for $4.5 million in 2010, but he allowed the home to be purchased in the names of Li Zhao and Xiao Mei Li.

“I am very concerned that Xiao Mei Li or Li Zhao have been and will in the future dissipate the estate’s assets, including most immediately, the West Vancouver property,” an affidavit from Yuan’s brother Qiang Yuan stated. “It would be most troubling if Li Zhao were permitted to use an asset bought and paid for by my brother to secure his release on the charge of murdering him.”

According to the civil suit filed by Gang Yuan’s family, when the British Properties mansion was bought in 2010, “it was always the intention and understanding” that the property “was beneficially owned by Gang Yuan and that he permitted the registration … in the names of Zhao and Xiao Mei Li as a temporary measure.”

The home is now worth $7.6 million, assessment documents say.

In the background of the criminal and civil cases surrounding Yuan’s killing are questions about the source of his many assets, and how his fortune was transferred into Canada and invested by Gang Yuan and others.

According to reports in 2015, Yuan made his fortune after coming to Canada as a permanent resident in 2007, by developing real estate, buying B.C. homes and investing in Saskatchewan farmland. As The Province reported this week, there is more to the story.

In early 2010 Yuan bribed a corrupt Chinese official with a 1,000-gram gold bar worth about $50,000, a November 2015 verdict obtained by The Province states. Yuan’s mining company continued to pay gold bribes in exchange for coal mining rights into 2014, the verdict states.

Adding to the confusion over Gang Yuan’s investments in Canada, Qiang Yuan’s civil suit alleges that Xiao Mei Li was given a power of attorney in December 2010 to control Gang Yuan’s CIBC bank accounts and safety deposit box, and also sell securities for Gang Yuan. The suit alleges that Li Zhao and Xiao Mei Li “used the power of attorney to fraudulently misappropriate” funds from Gang Yuan’s CIBC accounts in order “to benefit the defendants.”

Li Zhao and Xiao Mei Li, in a legal response, claim they rightfully own title to the British Properties mansion and they have not misappropriated Gang Yuan’s assets. No allegations in the criminal and civil cases have been proven in court.

Lending documents say that a 55-year-old B.C. man named Li Zhao owns a 2014 BMW 528I xDrive Sedan, and a 2015 Infiniti QX60.

Land title records filed by the same notary who registered ownership of the British Properties mansion for Li Zhao and Xiao Mei Li in 2010, also show that in 2013, Li Zhao became owner of a $1.79-million Point Grey home. A Li Zhao is owner of a $555,000 home in Richmond, and a $713,000 home in Surrey, title records say.

The next date in the preliminary stages of Li Zhao’s criminal case is set for April 28, in North Vancouver Provincial Court.

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The B.C. Liberal Party says a fundraising event organizer has confirmed that alleged murderer Li Zhao is not the man who donated $14,000 to the party last May. 

Elections B.C. records accessible to the public show “Li Zhao” donated $14,000 to the B.C. Liberals on May 12, 2015, and “Li Zhao” also donated $1,000 to the party in a Vancouver riding in 2005.

Chinese mining tycoon Gang Yuan was found killed and allegedly chopped into 100 pieces in his British Properties mansion on May 2, 2015. A relative of Yuan named Li Zhao, 55, was charged in connection with his murder and dismemberment.

B.C. Liberal spokeswoman Jillian Stead said that the party has investigated and has established that Li Zhao, the $14,000 party donor, is from Hong Kong, and the alleged murderer Li Zhao is from Mainland China.

“There is privacy around our donors, but the relationship that this Li Zhao, our donor, has to our party, has been confirmed by the event organizer and we have been able to trace him back to an identity that is not consistent to the Li Zhao murder suspect.”

Public donation records cannot confirm whether the “Li Zhao” listed twice as a B.C. Liberal donor is the same person, or where the person lives in B.C.

Stead said the party could not say whether the two donations made in 2015 and 2005 and attributed to “Li Zhao” come from the same person. But the donor “Li Zhao” lists two different addresses in B.C., Stead said.

Elections B.C. records show that on May 12, 2015, five donors with names common to Mainland China made large individual donations totalling $82,000 to the B.C. Liberal Party.

More than 30 entities donated $105,000 to the party that day, records show. Aside from the five big individual donors who each gave more than $13,000, others who donated on May 12 gave between $50 and $850. A May 12 donor named Bao Li Zhu gave the party $17,000. Another named Yong Sheng Zhao gave $19,000.

Several weeks later — on June 22 2015 — Bao Li Zhu donated $48,000 to the B.C. Liberals. And Yong Sheng Zhao donated $30,000.

The B.C. Liberal Party did not respond to questions about who organized and hosted the events associated with those large individual donations.

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The son of one of Malaysia’s wealthiest tycoons has finished selling the $360-million Trump Tower and is now preparing rezoning applications for the rest of his family’s Vancouver landholdings.

After being chosen by his dad, Tony Tiah Thee Kian, to invest hundreds of millions in B.C. property, 36-year-old Joo Kim Tiah automatically became one of Vancouver’s key development players as head of the Vancouver property development firm, the Holborn Group. 

While working from Asia, the young developer responded to emailed questions from The Province about his vision for important Vancouver sites, how much foreign wealth will pour into Trump Tower condos and his understanding of the criminal probe his father faced years ago in Malaysia.

The exterior of the Trump Tower at 1151 West Georgia.

In January, Joo Kim was named CEO of TA Global Bhd, the property arm of TA Enterprise Bhd, the company his father built. It was the culmination of a plan announced in 2009 — according to an article posted on TA Enterprise’s website — when Tony Tiah re-emerged years after his conviction in a stock-fraud probe to pass the torch to his descendants.

Despite a PR snafu six months ago when Vancouver leaders, including Mayor Gregor Robertson, asked Joo Kim to remove controversial U.S. presidential candidate Donald Trump’s name from the Tiahs’ 63-storey tower on West Georgia, the building’s ultra-pricey condos have been successfully marketed. Asked about the profile of typical investors, Joo Kim said 10 per cent of buyers provided foreign passports for ID — mostly citizens of China, Hong Kong, Taiwan and the U.S. — and 90 per cent identified themselves with Canadian passports or permanent-resident cards.

Joo Kim said he plans next to develop the $300-million, 15-acre Little Mountain site his family bought from the B.C. government in 2007, with hopes to market the first residential units in spring 2017. After receiving initial city approval in 2013 for his plans to build up to 10 mid-rise towers with 234 social-housing units among about 1,400 new homes at Little Mountain, Joo Kim applied for increased height and density last fall. A public hearing is due this summer. 

Little Mountain lands at Main street between 33rd and 37th Avenue in Vancouver on April 26.

 Simultaneously, Joo Kim is working on plans for a major rezoning at Vancouver’s prime downtown redevelopment site, the block bounded by West Georgia, Seymour, Dunsmuir and Richards streets, on lots mostly owned by his family. He hopes to break ground in 2018 for a large mixed-use development that will include retail, office, hotel and residential units.

He will have to decide how to proceed with 500 Dunsmuir, a large plot that houses a heritage-designated and social-housing-encumbered building. The Dunsmuir Hotel has been vacant since 2013 when impoverished residents were moved to other sites. The developer would have to obtain a permit from the city to demolish or repurpose the building for market housing.

“We are exploring all options with regards to what is the best use of 500 Dunsmuir building,” Joo Kim said. 

This SRO-zoned heritage building at 500 Dunsmuir is owned by the Holborn Group. 

In a previous interview with Postmedia, Joo Kim commented, “it’s hard to get anything done,” with Vancouver’s development consultation process, but the benefits of investing in Canada outweigh negatives because “it’s politically stable, and … I think corruption is less here or almost non-existent.”

The Province tried to question Joo Kim on the context of his comments. While Malaysia’s reputation for corruption continues to escalate with an international probe into a state investment-fund scandal, Joo Kim said his family has never been questioned in such probes. 

“No questionable capital has ever been involved in our course of business all over the world,” he said.

Photo credit: The Star ( Malaysia) From left: Datuk Tony Tiah, Datin Alicia Tiah, Joo Kim and daughter Sook Lin.

In 2009, Tony Tiah gave his “first and last interview to the press” and faced tough questions from the Malaysian Star about a stock-fraud probe reported internationally. 

“My past is something difficult to explain. What’s the point of blemishing me? What can you achieve?” Tony Tiah said. 

In the case, Tony Tiah and another Chinese-heritage Malaysian businessman, Soh Chee Wen, were charged with defrauding Omega Securities in August 1999. In 2002, Tony Tiah was convicted on a reduced charge.

“My father was convicted for an oversight in reporting certain wrong information to the Stock Exchange on the transaction of Soh Chee Wen,” Joo Kim told The Province. “Subsequently my father was fined and the case was closed.”

Soh Chee Wen fled Malaysia and was returned to face justice after being placed on Interpol’s wanted list. He eventually pleaded guilty and was fined in the case. 

In 2016, Bloomberg reported that Singapore prosecutors had arrested and were considering charging Soh Chee Wen for “serious criminal activities” in a massive stock fraud involving Canadian and Australian mining properties. Soh Chee Wen denied the allegations to Bloomberg.

Vancouver city councillor Geoff Meggs, Eric Trump, Magnum Projects’ George Wong, CEO of the Holborn Group Joo Kim Tiah, Donald Trump, Donald Trump Jr. and Ivanka Trump.

Meanwhile, in his 2009 interview with The Star, Tony Tiah made clear the high expectations Joo Kim will have to live up to developing the family’s land in Vancouver.

“I don’t want to be associated with the Chinese saying that wealth does not extend beyond the fourth generation,” he said. “Without Tony Tiah, there is no TA … I am the visionary one.”

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A Surrey realtor who failed to report on an application to renew his licence that he was judged to have fraudulently benefited in a $250,000 debt avoidance case has received a slap on the wrist from the Real Estate Council of B.C.

In December 2015 Shahin Soheili of Sutton Premier Realty was reprimanded in a disciplinary decision and fined $1,500 to cover the council’s enforcement costs.

In a consent order the council — a self-regulating industry body composed of real estate agents — said Soheili broke a number of rules in failing to report a 2011 provincial court judgment against him.

On licence renewal documents, realtors are asked to confirm whether they or their personal corporations have been involved in fraud or breach of trust related to real estate and financial services.

Soheili answered “no” twice on his October 2012 application, “when in fact a judgment for fraud was rendered against him and (his corporation) on December 16, 2011,” the council’s order states.

Soheili also failed to report the fraud judgment to the council in writing and tell his managing broker, in breach of council rules.

Legal filings for the fraud case say Soheili had mortgaged two properties he owned in Surrey to build a $1.4-million family home.

Although a contractor who was a personal friend of Soheili understood construction was for Soheili’s family home — and gave favourable financing terms for that reason — the project was financed through Soheili’s corporation, Homemark Construction and Building Industries Corporation.

When Soheili’s homebuilding loans fell through and his mortgage was foreclosed upon, he was forced to sell the home at a $350,000 loss. However, a judgment says, the use of a personal corporation enabled Soheili to benefit from contractors’ work without paying them when his project went sour.

“The $250,000 in goods and services went to him personally. As a result, instead of losing approximately $350,000 in the foreclosure, he lost $100,000,” the judge wrote.

“In effect Soheili has set up this company in order to avoid paying (contractors) those debts. As a result, there was either a fraud or something akin to fraud, and at the very least improper conduct by Mr. Soheili in order to avoid the debts personally.”

Since the council issued its reprimand and fine against Soheili in December 2015, both it and the B.C. Real Estate Association have come under criticism as weak self-regulators, amid a number of reports about scams involving realtors.

In a private speech to the BCREA in March, superintendent of real estate Carolyn Rogers said the industry’s bad reputation is not caused by just “a few bad apples” and that too many realtors are failing in their duties of self-regulation, which “like any great privilege, comes with great responsibility.”

“If (clients) don’t trust you to act in their interest, your business is dead,” Rogers warned.
In April, Rogers told reporters that a special panel reviewing practices in B.C. real estate is moving toward increasing fines and penalties on realtors who see minor fines “as a cost of doing business” in Vancouver’s soaring market.

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The City of Vancouver appears to have breached its procurement policy after Vision Mayor Gregor Robertson reportedly approved a contract worth almost $95,000 for a prominent supporter of his party, according to a legal expert.

Documents obtained by The Province through freedom of information show the “sole source” contract for developer, Vision political funder and consultant Bob Ransford — with payments of $94,838 over four months — was awarded “to provide support to Vancouver’s referendum staff team” in the 2015 transit tax vote.

As an experienced political campaigner and media-savvy lobbyist for developers, Ransford made headlines in the 2011 Vancouver city election by publicly endorsing Vision and Robertson after campaigning against Robertson for the NPA in the 2008 election. At the time, a Postmedia reporter summed it up, writing: “the conversion of Bob Ransford from one-time vociferous critic of Vision Vancouver to best buddy of Mayor Gregor Robertson is complete.”

Internal emails about Ransford’s 2015 transit referendum contract show Vancouver bureaucrats scrambling to get Ransford’s invoices approved and paid out, months after the contract was actually signed on Jan. 16, 2015. Vancouver staffers eventually got TransLink to pay city hall back for Ransford’s fees. But TransLink’s reimbursement was not a sure thing. And Ransford contacted city staff in apparent efforts to get his payments approved and moving.

On February 23, 2015 Ransford emailed city transportation head Jerry Dobrovolny saying he had submitted his first invoice after working “for a month and a half.”

“Paul Bruce in your procurement says he has it and is trying to figure out who approves it and I told him I thought it might be you,” Ransford wrote. “I’m sure something will get set up to get this paid.”

“Yes I’ll approve it … it’s not a problem if we end up keeping these costs,” Dobrovolny responded, also asking whether Ransford knew if the city would be reimbursed by the regional Mayor’s Council, which oversees TransLink.

As the campaign wound down and after many emails exchanged between referendum staff and Vancouver procurement officials Dobrovolny still appeared to be nervous.

“Can you please check to make sure we’ve transferred all of the costs we were holding to TransLink,” Dobrovolny emailed on May 25. “The door will close very quickly and we don’t want to be caught.”

On May 26, a city transportation engineer asked if the invoices should be paid and Marnie McGregor, a city staffer seconded to the referendum team replied “these two invoices should be approved,” and that Ransford wanted to pick the cheque up at city hall in three days rather than receive it by mail.

Lawyer Nathalie Baker, after reviewing documents provided by The Province, perceived a number of policy breaches made by city officials.

Vancouver municipal lawyer Nathalie Baker said after reviewing internal documents obtained by The Province she could not find any indication of how Ransford’s contract came about, but she perceived a number of policy breaches made by city officials.

“I looked at the FOI documents and the procurement policy posted on the city’s website, and it really does appear that the procurement policy wasn’t followed with respect to this contract between the City of Vancouver and Bob Ransford.”

In an interview Ransford said Mayor Robertson — who reportedly took over the Mayor’s Council “Yes” campaign in January 2015 — approved the sole source contract that was signed Jan. 16, 2015. Ransford said that Surrey Mayor Linda Hepner was also involved in the decision as Robertson’s campaign vice-chair. However, Hepner’s office told The Province that the contract was paid out in Vancouver city hall and Hepner did not approve any individual contracts for the “Yes” campaign.

Despite spending about $6-million in public funds to sway support for a $7.5 billion transportation project tax, Mayor Robertson’s “Yes” campaign was eventually defeated 62 to 38 per cent by a “No” campaign that reportedly cost about $40,000.

In Vancouver’s procurement policy any contract over $75,000 is supposed to be awarded through competitive bidding. However there are exceptions that allow “sole source” contracts to be awarded in some circumstances.

Mayor Gregor Robertson and his chief of staff were asked to respond directly to questions about Robertson’s role in approving the contract according to Ransford, and whether the city followed its procurement policy. Robertson and his chief of staff Kevin Quinlan did not respond.

“Mr. Ransford’s contract followed the city’s procurement process,” city spokeswoman Sarah Zaharia wrote in an email. “He had a specialized skill set required to prepare the referendum staff team, and the city was reimbursed by TransLink.”

Based on the city’s responses to The Province and procurement documents, Baker said the city appears to be relying on “single supplier” and “emergency” exemptions to bypass public tender in Ransford’s contract. The first is a circumstance in which the procurement official believes “only one supplier is available and capable of performing the contract.”

However, in such a case the city must post notice of its intention to enter the contract for at least 14 days before the contract is signed in case there are public objections, Baker said. But in this case the city posted notice of the contract June 5, five months after it was executed and services were delivered, which defeats “the purpose of the notice” Baker said. Also, the notice is apparently inaccurate, listing the contract’s value at $80,000.

The second exemption for a non-competitive contract is for city emergencies where goods or services “are urgently required and delay would be injurious to the public interest.”

Vancouver bureaucrats and politicians certainly felt it was urgent to convince Metro Vancouver voters that the transit-building sales tax was in the public interest, media reports show. But the referendum’s final results indicate the majority of voters believed the tax itself would be injurious to the public.

“I think it’s hard to see, at the time the contract was signed in January, how the June referendum constituted an emergency,” Baker said. “I think the emergency exception in the procurement policy was intended to capture situations like (a recent case involving a) punctured aquifer in South Vancouver, which threatened several homes.”

In an interview, Ransford was asked if he believed he was the only supplier who could have completed his contract.

“It was a pretty urgent situation,” Ransford said. “Did I think I was the only one that could do the job? No, I don’t think of myself that way. But maybe they thought I was.”

Ransford was asked if he believed the city followed it’s procurement policy.

“I’m not an expert in city procurement policies. I did what they asked me to do,” he said.

Ransford was asked if there could be a perception that he was awarded a sole source contract by Vancouver as a Vision insider and Robertson supporter.

“If you want to create that perception,” Ransford said. “(The “Yes” campaign) was chaired by two different mayors. It was a bi-partisan campaign with 20 some mayors.”

Meanwhile, Ransford’s company Counterpoint Communications had an existing $74,000 contract with TransLink that was extended for an extra $100,000 in January 2015 with no bid. Company owner Bruce Rozenhart told The Province that Ransford, who is no longer with the company, took a sabbatical in January 2015 to take the personal referendum contract.

However, Ransford used his Counterpoint email address to communicate with city staff for the contract, documents show. And internal documents show that procurement funding was requested for CounterPoint Communications in a typed form — citing the firm’s “specialized knowledge” — but Bob Ransford’s name was later written into the procurement form by pen.

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Police in Surrey are investigating a targeted shooting after a man was shot multiple times at 75th Avenue and Scott Road.

The injured man was found in a silver SUV riddled with bullet holes by police responding to reports of shots fired at about 6:30 p.m. Saturday. He was transported to a regional hospital conscious and able to speak. 

“Police are currently working on obtaining a definitive description of the suspect vehicle and are not able to provide anything at this time,” Surrey RCMP said in a statement. “The investigation is still in its early stages, but initial indications are that this is a targeted incident.”

As police canvassed witnesses and completed forensic investigations onlookers watched Saturday evening. One woman at the location called it a “horrible scene.”

Anyone with further information who has not already spoken to police is asked to contact Surrey RCMP at 604-599-0502.

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As debate over skyrocketing home prices and foreign investment boils over in B.C., a new poll by Insights West shows 80 per cent of British Columbians support a tax on absentee owners.

And for the first time, Insights West has measured anger directed at B.C. politicians over housing costs. All three levels of government got scathing reviews in the poll. The provincial government was hit hardest, with 76 per cent of British Columbians expressing dissatisfaction with Victoria’s inaction.

Mario Canseco

Insights West pollster Mario Canseco said public support for taxing vacant homes in B.C. has climbed steadily from 72 per cent in 2014. Current support is broad, Canseco said, with all generations, ethnic groups, and income levels backing an absentee tax.

“It is very rare to get a number as high as 80 per cent, and it is very rare to get three generations and people from all income levels to agree,” Canseco said.

The poll comes as average single-family home prices in Vancouver have seen surreal price jumps of about 40 per cent over the past year. A ripple effect now is pouring across the region, with suburban areas such as Tsawwassen seeing benchmark prices jump as much as 48 per cent year over year.

A growing consensus of experts point to a surge of money from Mainland China as the major force driving housing price gains in Metro Vancouver.

Canseco noted that his poll “really takes away from the notion you are targeting a specific group for race, because you are only targeting investors because of their absence.”

Support for the absentee tax peaks with millennials, aged 18 to 34, at 89 per cent. Voters aged 55 and over show 75-per-cent support for the tax. The cross-generational agreement also applies to views of politicians.

“Anger is widespread, voters are upset with all levels, and most of all Victoria,” Canseco said. “It is inaction that is leading to more cynicism against the provincial government, which is understandable given the cosy nature they have with developers, including their chief fundraiser, (condo marketer) Bob Rennie.”

In a widely reported speech this week, Rennie said that Vancouver should “get out of the affordable ownership business” — and that investment from Mainland China should not be tampered with, and foreign investors should not be taxed.

In Metro Vancouver, 82 per cent support the absentee owner tax, Canseco said.

After playing down concerns about investment from Mainland China as “ridiculous” in 2013, Vancouver Mayor Gregor Robertson this week said that because of “unregulated, speculative global capital flowing into Metro Vancouver’s real estate, we are seeing housing prices completely disconnected from local incomes.”

Vancouver Mayor Gregor Robertson.

Robertson told Bloomberg News that his government is considering a number of measures, including a vacant home tax.

Vancouver millennial Eveline Xia, who several years ago launched “donthaveonemillion” — a popular social media campaign criticizing unaffordability driven by offshore investment — said she is gratified that politicians like Robertson have adopted the protest’s message.

“I think there has been an awakening that housing affordability is a global issue and we need to address global capital’s role in Vancouver,” Xia said. “We are behind other cities like Sydney and London, on taking action.”

UBC real estate economist Thomas Davidoff is among a large group of B.C. economists advocating a plan to decrease taxes paid by local workers and increase the property tax bills of investors who can afford to pay for vacant B.C. homes.

Davidoff said that in recent years money from Mainland China appears to be driving B.C. housing prices, but he can foresee that investment from Russia and the Middle East that is prevalent in New York City could soon pour into Vancouver.

“Something needs to be done or you have this two-tiered society where local people are pushed out, and international money is partying in Vancouver,” Davidoff said. “And then suddenly you have someone like Donald Trump winning an election in B.C.”

Vancouver resident Jason Czorna, 34, said he would support laws allowing only permanent residents and Canadian citizens to own homes in B.C.

“The state of our housing market is a disaster and (Premier) Christy Clark will never do what it takes to fix it,” Czorna said. “Real estate as an investment only benefits the rich and crushes the average person’s chance to live affordably.”

Not all Vancouver millennials support a tax on absentee investors.

“This will do absolutely nothing to change housing affordability. Do you not understand how much money these foreign buyers have?” said 33-year-old realtor Brad Richert. “Demand is insanely high and supply is falling. A tax isn’t going to stop or even slow down anything.”

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Metro Vancouver realtors will likely fall in line with major data sharing changes that have been forced on Toronto realtors in a competition ruling, Greater Vancouver Real Estate Board President Dan Morrison said Thursday.

Weeks ago, the federal Competition Tribunal ordered the Toronto Real Estate Board to release proprietary Multiple Listing Service sales data to consumers online.

Homebuyers in Toronto will now be able to access historical sales data that was tightly guarded by realtors in ways that stifled competition, according to a ruling. The new information should give consumers a better idea of the long-term value of properties compared to current asking prices, experts say, and help them avoid bidding wars that are encouraged under the current system.

Some analysts say consumer-friendly changes in Ontario could mark a long-predicted moment of disruption for Canada’s real estate industry, and Vancouver’s red-hot market. The most aggressive predictions envision consumers eventually using technology to directly buy and sell homes through an open MLS system.

Toronto realtors have fought to protect their MLS sales data for years, and say they will appeal the ruling.

Morrison that if the competition order is upheld in Toronto, Vancouver realtors would also release MLS data, but he could not give a timeline for changes.

“I can’t imagine we wouldn’t support a major change like this,” he said. “But I’m not sure I agree that this (ruling) is the thin edge of the wedge in terms of going to a fully open MLS system.”

Surrey realtor Mayur Arora believes the Ontario ruling means B.C. consumers will be paying lower commissions for transactions, and general secrecy around many deals that critics say fuels market-inflating bidding wars could be reduced.

In one example, Arora says he is aware of realtors who tell prospective buyers that many offers have been made on a home, encouraging higher offers. In some cases, Arora says, multiple offers are “greatly exaggerated” or may not even exist. Also, some consumers and realtors say there are cases where properties don’t make it to the open market and the highest bid may not win, for reasons only known by realtors.

In the future, Arora said he can envision all listings being publicly marketed on the MLS system, and disclosure rules that would make all offers officially recorded. Ultimately, Arora believes fewer realtors will be working in B.C. due to technology and increased powers for consumers.

“I think we are on the cusp of a huge shakeup in the industry, and this ruling is the catalyst,” Arora said. “If you remember in the 1990s there were travel agents on every street corner — where did they go?”

Arora’s prediction won’t be popular with many realtors, but he is already a controversial figure. He says he faced a death-threat from an anonymous caller claiming to be a Surrey realtor in 2010, when Arora introduced a comparatively low, flat-fee commission plan for MLS system sales.

There will be continued resistance to greater MLS data sharing and lower realtor fees, Arora says, but the forces of change in B.C. have never been greater, since consumers are already angered by reports of shady dealings in Metro Vancouver’s skyrocketing markets. B.C.’s Superintendent of Real Estate Carolyn Rogers has acknowledged consumers have reason to complain and realtors must regain trust.

“Right now there is so much secrecy and everything is done on the hush,” Arora said. “Everyone knows shadow flipping and these things are happening. If we open up the data, that will take care of half the problem.”

Rokham Fard, co-founder of tech-savvy Toronto real-estate brokerage TheRedPin, says the Ontario ruling will unleash a technological transformation of Canada’s real estate markets. TheRedPin has an office in Vancouver, and offers a large database of current MLS property listings. When brokerages can add historical MLS data to current listing data they will be able to judge for clients whether a home is fairly priced, Fard said. Also, consumers will be doing much of the market research now done by realtors, and therefore pay less for services, he said.

Fard says within five years he believes consumers will be able to ask “mechanical questions” of automated apps “before engaging” with human realtors.

“I don’t see the use of realtors going away in the next five years, because technology can’t answer emotional questions yet,” he said. “But who knows, maybe in the next 10 or so years we will be there.”

Morrison said B.C. realtors acknowledge the trust challenges they face, and he hopes the independent panel reviewing B.C. real estate complaints will offer solutions.

“There has to be a way of making the whole process better serve the consumer and all realtors involved,” Morrison said. “I know that realtors provide integral value to successful transactions, and we are working hard to stay relevant.”

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A Chinese bank is suing to freeze and recover the Metro Vancouver property assets of a Chinese citizen who allegedly “fled China” with an unpaid $10-million dollar loan.

A petition filed in B.C. Supreme Court by China Citic Bank alleges that Shibiao Yan and his family lied to the bank about managing a business and owning assets in China when they applied for a loan in June 2014.

The suit alleges that Yan and his wife were living in Vancouver and buying B.C. homes without disclosing the information to Citic. Citic’s suit says that the bank located four B.C. homes worth $7.2 million.

The allegations have not been proven in court and no statement of defence has been filed. 

Vancouver anti-money laundering lawyer Christine Duhaime acted for Citic on the case and helped investigators locate the man and some of his B.C. assets.

Duhaime says that banks in China have discovered in recent years that many citizens who own or claim to own assets in China have fled to countries including Canada, New Zealand, and Australia, leaving vast numbers of unpaid loans behind. Duhaime told Postmedia that she understands this is the first case of a Chinese bank using civil law to freeze real estate assets of a Chinese citizen in B.C. in an effort to recover and “repatriate” unpaid loans.

Citic’s suit says that the bank took legal action after discovering in April 2015 that “Yan had fled China and was living in the Vancouver area.”

Court records say that the 56-year-old Yan, president of Tanyuan Wood Company in Shijiazhuang, China, obtained a $10-million line of credit on behalf of his company in June 2014, and withdrew the entire amount within days.

Court documents say that Yan incorporated the company TYMY Investments in March 2014 and his 36-year-old wife bought a $2.5 million house in Vancouver a month later. 

B.C. corporate documents show that Shibiao Yan of 712 West 64th Avenue in Vancouver registered the company TYMY Investments Ltd., on March 7, 2014. On the same day Shibiao Yan ceased to be a director, records say, and two new directors were named — Yahui Gao and Pengfei Luo — both with mailing addresses at 712 West 64th Avenue. 

Court documents say that investigators in Vancouver retrieved banking documents from the “periphery” of the home. An investigator on the case told Postmedia “garbage searches” outside the home turned up records connected to a number of Canadian banks.

Property records obtained by Postmedia in connection to the lawsuit show that Yan bought a number of homes in the summer of 2014, and that Yan obtained mortgages from Canadian banks including Bank of Montreal and HSBC. Two of the mortgages Yan took out from HSBC appeared to be for about 100 per cent of home purchase prices, land title records indicate. In such a mortgage, the homebuyer makes little or no down payment to buy property that is almost completely funded by the loan issuer. Financial experts say that in such cases, it is believed the creditor would be providing loans against existing assets owned by the customer.

Property records show 712 West 64th Avenue in Vancouver was mortgaged for $2.3 million. In one property mortgaged by HSBC Canada, title documents show that “Shibiao Yan, businessman” of 6151 Barnard Drive in Richmond, bought an Ocean Park home in South Surrey, now valued at $3.5 million. The home was purchased on June 5, 2014 with a $3,178,000 mortgage taken out by Shibiao Yan.

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Michael from Idaho won’t tell me his last name. But he will reveal heart-wrenching details of his family’s $500,000 medical debt and how “divine intervention” led him to California real estate guru Nick Vertucci.

I’m at the Nick Vertucci “Fortunes in Flipping” free seminar at the Hilton Vancouver Airport hotel in Richmond. There are about 50 other people gathered in a medium-sized conference room. Most are aged 50 or over. An elderly man aided by a walking device slowly hobbles to his front row seat.

“The nurses told my wife he wouldn’t live,” Michael says quietly, displaying an intensive care unit picture of a tiny, wrinkled baby. The prematurely born baby boy survived, Michael says, but left his uninsured family of six with huge medical bills. Michael said he had gone broke, and the situation was bleak before he found himself at a free real estate seminar. But after Nick Vertucci taught Michael how to flip homes, he said, he paid off the $500,000 medical bill, and “retired” on the riches of his rental income properties within 18 months, at age 49.

Nick Vertucci wasn’t at the recent seminars in Richmond, but his image was front and centre.

“I was sitting right where you are seven and a half years ago,” Michael says. “We were broke, and my wife pulled out a credit card I didn’t even know we had. Nick Vertucci changed my life.”

As we listen to Michael, we are packed tightly in a semicircle of rows arranged so that he can walk the aisles, reading our name tags, and speaking to us directly. Seminar staff quietly set out new rows of chairs as more attendees arrive.

“I can’t let you move that chair,” a woman staffer says forcefully when I try to shift a seat to gain more elbow room.

Vancouver’s surreal property market is the backdrop for this real estate seminar.

Attendees are hoping to learn the secrets of getting rich quick. But they won’t learn them today. A limited and exclusive number will be able to attend a three-day seminar in mid-July to learn the real secrets, if they pay $599, a discounted fee available today only. By the end of that three-day event students will have been trained how to “paper flip” a home and make a quick $3,000 profit.

“It’s like shooting fish in a barrel,” Michael says. “You need zero money to invest the Nick Vertucci way.”

Nick Vertucci is not here, but his brand name and his “NV Real Estate Academy” is the draw. Vertucci is one of the United States’ better-known get-rich quick-flipping gurus. He previously worked with an even bigger name, Armando Montelongo, star of Flip This House — a U.S. reality TV hit that reached peak popularity before the U.S. housing market crashed in 2008. 

The people at the Richmond seminar were drawn by Vertucci’s Metro Vancouver advertising spree.

“Be my next real estate millionaire,” touted ads for the free seminar. “People in the Vancouver area are making millions flipping houses.” Nick will teach students three surefire steps to making up to $50,000 a month flipping homes, his ads say. Vertucci’s tag line slogan: “Get in, get out, get paid!”

At the June 27 seminar in Richmond, Michael from Idaho quickly explains that while fortunes are being made in Vancouver’s real estate market, it’s not ordinary Canadians reaping the windfall. Sky-high prices are driven by foreign investors trading Vancouver homes for profit, Michael tells us. 

Michael assures us “the U.S. is on sale” though, and Canadians can easily become foreign investors and learn to “paper flip” U.S. homes from the comfort of our home computers.

Before getting into the meat of his pitch, though, Michael yanks on the heartstrings.

He’s a big man wearing a wrinkled grey suit with a blue dress shirt, with a beaded necklace instead of a tie. When he gestures, his chunky silver bracelet, large pinky ring, and silver watch command attention. His voice swings from quiet and vulnerable, generally when he’s telling stories about the dire financial position he used to be in, to loud and confident, when he speaks about his present wealth. But it’s when he speaks about how powerful Vertucci’s investment secrets are that Michael really turns on. His face gets red and his voice booms with a ‘come-and-be-saved’ fervour resembling U.S. evangelical pastors.

“If you have half a brain, when I show you this system you will jump in!” he bellows.

The outline of Vertucci’s “System of Success” according to Michael, is getting access to deeply undervalued or foreclosed-upon U.S. homes in beaten down markets, and financing renovation projects with “OPM” — an abbreviation for other people’s money.

After attending Vertucci’s three-day seminar in Vancouver and completing a “paper flip” on a U.S. home via the Internet, Michael says, students can move on to “traditional flips” in which homes are renovated and quickly sold for profits of $55,000 to $258,000 per deal. And, he says, students will be able to obtain loans to complete these flips without putting up a cent of their own money. They’ll also be able to fund some types of flip with loans from private lenders who don’t require credit or work history information.

“We recommend you start with the paper flip. Why? Because it takes no money, no credit,” Michael says. “So what risk do you have? Zero.

“And then you can move into a traditional flip where you buy low, sell high. That’s why we can show you how to retire in three years or less. That’s why we have such high success. That’s why in the U.S. and Canada now, we have zero complaints. Not from vested students.”

Lawyer Ron Usher says the real intention is to sign people up for the $50,000 course.

Michael’s pitch is hard to believe, according to Ron Usher, a lawyer and member of the review panel which recently tabled a damning report on practices in the B.C. real estate industry.

Usher says he has attended over 10 seminar events in Metro Vancouver from U.S. “travelling show” outfits similar to Vertucci’s. He has attended several Nick Vertucci free seminars, including one of the sessions in Richmond in late June. Usher says the seminars closely follow the same playbook used in U.S. presidential hopeful Donald Trump’s controversial real estate seminar business, right down to the way conference room chairs are arranged. Usher says he has made complaints about U.S. real estate seminars to consumer protection agencies in Ottawa, based on what he believes are misleading practices.

Phil Norris of the Competition Bureau Canada said that in May, the bureau posted consumer warnings on “free” real estate flipping seminars. The warning did not name names, and Norris could not say if any particular companies are under investigation. The bureau warns consumers to not believe “all testimonials,” be “skeptical of get-rich-quick promises,” and understand the risks of “no money down” real estate investment deals, Norris said.

“My main objection is they are not revealing the end game,” Usher said. “The real intention is to sign you up for a $50,000 course.”

Usher obtained and provided to The Sun a NV Real Estate Academy “Advanced Training Enrollment Form” which offers a next stage of training to those students who sign up for the $599 three-day seminars. The “4 day VIP Flipping Bus Tour” and access to other Vertucci training courses is offered for US$49,997. Usher alleges that the whole point of the $599 three-day seminar — for Vertucci and similar U.S. companies — is to assess students’ credit availability through counselling sessions, and then sign them up for “the really big sting.”

Another issue that Usher had with Michael’s presentation in Richmond was the perception Usher got that, through joining Vertucci coaches and fellow students, students would get access to secretive discount properties in the U.S. and easy financing arrangements.

“Part of what is great about joining Nick is getting cheap inventory,” Michael said at the seminar I attended. “You can’t find them yourself or with Realtors. When you try to find a cheap house from a Realtor, it’s like the blind leading the blind! But Nick doesn’t have that problem.”

Nick Vertucci: ‘There is an edge in working with me, if I train you to train the real estate agent in where to look.’

In an interview from California, Nick Vertucci defended his business, and explained Michael’s pitch.

“There is an edge in working with me, if I train you to train the real estate agent in where to look,” Vertucci said.

Michael would not provide his last name to me at the seminar in Richmond.

But Vertucci identified the pitchman as Michael Syme. Vertucci said that he believed in Michael Syme’s claims of rapidly becoming wealthy by flipping homes and then retiring, and paying off a $500,000 medical debt, by following the Vertucci methods.

“I never said, ‘Mike send me your bills.’ I don’t know when he retired, but I know he owns homes in Hawaii and wherever else it is, because he’s told me that. I can’t say that I’ve looked at his paperwork, but that is what Mike has always told me.”

As for Usher’s claim that the real aim of Vertucci’s seminar is to find students for expensive tours and coaching, Vertucci said he can’t teach students everything in a few days.

“(Usher) may look at it as an upsell or a dupe,” Vertucci said. “But I can’t disclose everything from the beginning. It is a process, not an upsell.”

Asked about his history with Armando Montelongo’s seminar company, Vertucci said he could not discuss details of the lawsuit that the two flipping gurus are contesting. U.S. court documents show that Montelongo sued Vertucci. He alleged that while Vertucci was employed to teach Montelongo’s students about buying and selling “cash flow” rental properties, Vertucci was also involved in a joint venture to sell his own “cash flow” properties to students at Montelongo seminars.

Vertucci said that he did previously sell his own properties to people listening to his real estate radio show, but he could not discuss whether he did the same at Montelongo seminars. 

“I do not sell properties to my students now,” Vertucci said.

Vertucci said that he wants to continue teaching Canadian students to invest in the U.S.

“The seminar business does have a black eye, and they kind of run people through,” Vertucci said. “And I’m trying to change that.”

Vertucci said that if his company receives any complaints from seminar attendees, he makes sure any issues are resolved. There is evidence online that Vertucci has reached out to dissatisfied seminar attendees and resolved complaints.

Vertucci was asked via email to identify whether a U.S. online advertisement from a Michael Syme — in which a pitchman made claims of being a successful eBay auction entrepreneur making about $10,000 a month, using very similar language to the flipping pitch made by Michael in Richmond — was the same person. As of Friday evening, no response had been received.

However, The Sun found archived photos of the online auctioneer that matched photos of the Vertucci pitchman in Richmond. A 2009 online profile for Michael J. Syme of Idaho, Utah and Hawaii, says he “is a popular online auctions expert, educator … (who) started selling on the Internet nearly seven years ago after losing his job. Mr. Syme for years has made his living selling with online auctions, where he has made over $12,000 a month … he now shares his ‘auction success secrets’ with tens of thousands of people around the world.”

Bankruptcy records for Michael J. Syme of Utah show that in 2003 he owed debts to a long list of creditors including the U.S. International Revenue Service and Utah Division of Consumer Protection.

Michael Syme could not be reached for comment after following the Vancouver seminars.

At the end of the free seminar in Richmond on Monday July 27, an attendee who only identified himself to me as Harry T., asked Michael if Vertucci’s system had “any drawbacks.”

“No,” Michael said.

“I’m a bit skeptical, but I signed up for the (three-day) course,” Harry T. said.

scooper@postmedia.com

A wealthy West Vancouver real estate developer faces an unusual lawsuit involving a $10 million loan which was advanced in China with the key term that it must be repaid in B.C.

The suit was filed in B.C. Supreme Court on June 1 against Qiang Wang (also known as Edison Washington) by a Chinese businesswoman who claims he defaulted on the loan after making an initial interest payment. Also listed as defendants are Amy Barsha Washington (also known as Feng Yun Shao) and her company Chongye Developments Ltd. 

The Washingtons live in a $7.3 million home on Eyremount Drive in West Vancouver. 

They have been active players in Vancouver’s real estate scene. Since 2011 the couple, whose citizenship is not known, has purchased at least 10 Vancouver properties worth an assessed value of $152 million, according to land title documents. Among their deals were a number of land assembly purchases on Cambie Street, made in anticipation of rezoning. 

And several weeks ago they put three empty lots up for sale on Belmont Drive, a street lined with mansions commanding some of the city’s highest prices. The three properties are believed to be the most expensive undeveloped single-family lots in Vancouver. MLS listings for the three properties asked for a total of $68.5 million.

In the lawsuit, Gui Hua Chen claims the “informal” $10 million loan was negotiated with Chongye Developments. 

The money would be deposited in Chinese currency into a bank account in China with the key term that Chongye would repay $10 million in B.C., according to legal filings. It is not known if any of the money loaned in China actually made its way to Canada.

Ron Usher — a lawyer and member of the independent review panel that investigated practices in B.C.’s real estate industry — reviewed legal and land title documents relating to the case that were obtained by Postmedia.

Usher said the case has a number of financial and legal details that he has never seen before. 

“It looks like you put some money down overseas and that gets you a credit in B.C., so there is no actual international wire transfer of money,” Usher said, of the transaction described in this lawsuit.

The case takes place in the context of a historic flight of capital out of China. The New York Times reported over $1 trillion has left China since early 2015, as the Chinese yuan is devalued to combat economic weakness.

China has strict rules barring citizens from transferring more than $50,000 out of the country. In Canada, funds over $10,000 must be reported to Canada’s border agents and large cash transfers must be reported to the government. 

As tough as China’s capital flight rules are, individuals and companies attempting to transfer money into Chinese banks face equally strict rules. The Financial Times noted some investors employ “underground banks” in China which provide “matchmaking services.” These institutions connect Chinese citizens who want to move money abroad with offshore investors who want to move money into China, and no money crosses borders.

According to Gui Hua Chen’s claim, in June 2015 she loaned Chongye $10 million with a “promissory note” that stated “the borrower promises to pay the plaintiff in British Columbia,” by May 1, 2016.

Interest would be 10 per cent, with $875,000 interest due to be paid in December 2015.

The loan was guaranteed by “personal assets including but not limited to real properties,” the claim says. Chen claims that the defendants paid interest in December 2015, but failed to pay back $10-million that was due May 1, 2016.

A pair of B.C. investors were sued by a Chinese national for defaulting on a $10 million loan. The couple own at least 10 Vancouver properties worth an assessed value of $152 million, including three lots in the 4800 block of Belmont Drive (shown here) in Vancouver that are currently on the market for a combined $68.5 million.

Chen asks the court to declare the defendants in default and to order a mortgage charge against seven Vancouver properties in the Cambie Street area and the West Vancouver home owned by the defendants. The three empty Belmont Drive properties — which were purchased in February 2015 for $26.5 million through three numbered companies — were not among those listed in the court case.

The defendants do not dispute that Chongye Developments borrowed $10-million in China to be repaid in B.C.

But they contest Chen’s version of the terms and agreement behind the loan, according to court filings. In a statement of defence filed July 8, the defendants claim B.C. courts have no jurisdiction over this case.

“The contract between the plaintiff and the defendants was an oral contract made in China,” the documents state. According to the defendants, Chen resides in China, is not a citizen of Canada, and has no connection to British Columbia or Canada.

The loan was negotiated in China for Chongye Developments by Edison Washington with an agent for the lender only identified as “Mr. Tian,” according to the defendants. They say the loan did not have any fixed date of repayment and interest.

One “specific term” was that the “the loans were demanded by Mr. Tian to be advanced in China but to be repaid in Canada … the lender in China could deposit funds to an account in China as an advance of a loan. The funds advanced to the borrower in China would come to Canada and be received in Canada.”

The defendants say Chinese currency funds were advanced to Chongye Developments in a Chinese bank account from May 27 to June 19, 2015.

On November 18, 2015, there was a meeting in Vancouver between Amy Washington and Edison Washington, Mr. Tian and an accountant named Jonathan Wang, the defendants claim. A promissory note was drafted by Wang “at the direction of Mr. Tian,” the defendants state. They claim they have never dealt with Gui Hua Chen and were not aware she was the person to be repaid in B.C. until the meeting with Mr. Tian in Vancouver.

“Mr. Tian demanded that the lender be Gui Hua Chen, the plaintiff. Mr. Tian gave no reason to Mr. and Mrs. Washington for this request,” the defendants state.

Richmond lawyer John L. Leathley, counsel for Chen, was asked if he could provide any information about Chen and the case.

“I can’t comment because anything I know is privileged for my client,” he said.

scooper@postmedia.com

A Chinese property tycoon linked to a massive banking scandal in China’s industrial north is at the centre of more than $500 million in B.C. property deals, a joint investigation by Postmedia and global due diligence firm IPSA International shows.

Chinese real estate magnate Kevin Sun — also known as Hong Sun, Kevin Lin, Hong Wei Sun and Sun Hongwei — founded Sun Commercial Real Estate in 2013. In addition to buying and selling hundreds of millions in B.C. property, the B.C. company, which focuses on immigrant investors, has raised over $200 million from investors. 

The banking scandal, at Industrial and Commercial Bank of China, started with a $500-million loan fraud audit in Jilin, a corruption-plagued northeastern province. 

“As far as my client knows, there are no ‘Chinese police warrants’ in China for Kevin Sun (under that or any other name) nor are there any RCMP files in relation to same,” Sun Commercial lawyer James Carpick stated in an email to Postmedia.

But law enforcement officers interviewed by Postmedia say investigations in China concerning Kevin Sun and Sun Commercial’s CEO Davidson Guo are known to a number of agencies, including the RCMP, the Canada Border Services Agency and the B.C. Securities Commission.

So exactly who is Kevin Sun and what are his plans for Canadian and Chinese real estate markets?

Despite repeated efforts by Postmedia, Sun would not agree to answer questions about his business interests.

But a B.C. Supreme Court civil case connected to a South Vancouver property flip provides insight.
Detailed testimony from Bo Jiang, Sun’s friend and first employee in B.C., points to Sun’s fortune in China, his arrival on B.C.’s real estate scene, and complex land investment strategies that preceded Sun Commercial’s incredible growth.

‘I don’t give a damn about this little money’ 

Gitzy advertising, here promoting a corporate event, is a hallmark of SunCom. 

Bo Jiang — or Bobo, as Sun affectionately called him — was Sun’s translator and jack-of-all trades in property speculation, Jiang would recall in the 2008 B.C. Supreme Court civil case. Bobo was the worker who asked Richmond bureaucrats for land subdivisions, opened a Marine Drive Royal Bank account to manage Sun’s cash, and took care of all the little things, such as maintaining Kevin Sun’s growing roster of empty homes. 

Sun hired Jiang in 2004 to work for Qiji, a real estate investment company based in Richmond. It’s not clear how much Jiang knew about his boss’s history in China. But according to Jiang’s testimony, he did know that Sun claimed to be enormously wealthy.

“At that time he said something like, ‘Eventually I would give you more than what you want or what you ask,'” Jiang told the Supreme Court. “He said that, ‘Given that I’m so wealthy, I don’t give a damn about this little money.'”

Also in 2004, Chinese media including Sina, an online financial news service, were reporting that a Jilin entrepreneur named Sun Hongwei had left behind “a $2.8 billion (yuan) credit maze, infamy and misappropriation of state assets.”

Sun Hongwei had rapidly amassed a conglomerate of state-owned companies in the 1990s, multiple Chinese media outlets reported. In 2003, he was named China’s 388th richest citizen according to a profile in New Fortune magazine. But by that time, according to reporters in China, Sun had already disappeared.

‘He says Montreal was too cold’

Kevin Sun in a photo illustration from a Chinese identity document.

Kevin Sun is a mysterious figure. In an era when many B.C. real estate titans seek the media spotlight in person to market their projects, Sun prefers the shadows.

Ads for his namesake company, Sun Commercial (also known as SunCom), are plastered across Vancouver transit buses. But Kevin Sun has avoided interviews with Postmedia.

And Carpick, SunCom’s lawyer, distanced Kevin Sun from Sun Commercial, the company Sun founded in 2013. Sun ceased to be a corporate director in June 2015, documents show. “Mr. Sun is not a director, officer, employee or shareholder of my client,” Carpick said.

Postmedia could find only one public picture of Kevin Sun since his arrival in B.C. The September 2015 photo of him posing in front of a large SunCom ice sculpture, standing beside the company’s star employee and vice-president Julia Lau, was removed from Lau’s Facebook page after securities regulators launched a review of the company in connection to a January 2016 report by The Province.

Then SunCom VP Julia Lau poses in front of luxury vehicles lined up at a SunCom event, at Edgewater Casino. 

The bottom line is, apart from a few well-informed Mandarin speakers in Richmond’s real estate and political fundraising circles, very few people know that Kevin Sun is the magnate behind the rapid expansion of Sun Commercial and many associated companies in B.C.

“Kevin Sun has been here for a while,” said one leader in the Chinese community. “He is pretty good at staying out of the spotlight.”

Associates, who would be interviewed only on condition of anonymity, say that Sun has claimed he landed in Montreal after leaving China. Sun has permanent resident status in Canada. A photo I.D. copy of Sun’s permanent resident card says his nationality is Chinese, and the card is marked “04 05 2001 Vancouver.”

“He says Montreal was too cold,” one associate said. “I think he came to Vancouver around 2001 or 2002.”

Once in Vancouver, Sun and his wife Ling Lin reportedly lived in a small apartment near Langara College where they socialized with Chinese immigrants. Soon they had single-family homes in Vancouver and Richmond. Kevin Sun and Ling Lin were sued by HSBC Bank Canada, which alleges they defaulted on a $3.2-million mortgage on one of Sun’s homes — a $9.5-million gated mansion in Richmond complete with stables and sprawling grounds that served as corporate mailing address for Sun’s companies. SunCom lawyer Carpick said his client would not comment on a case “still pending before the courts.”

There are no known records indicating whether Kevin Sun transferred wealth from China to Canada. China has strict capital controls barring citizens from transferring more than $50,000 abroad per year.

Allegations of ‘conspiracy to defraud banks’

Sun was born in Changchun City, Jilin Province, on June 17, 1968. His name at birth was Sun Hongwei. News reports now published online in China for over 10 years allege details about Sun’s mysterious rise and abrupt disappearance from Jilin.

One of the reports is a document-based investigation by Caijing, which is called China’s “respected business magazine” by the New York Times. Confidential U.S. diplomatic cables sent in 2008 to the U.S. National Security Counsel and the Central Intelligence Agency, and revealed by WikiLeaks, cited Caijing’s “hard-hitting” reporting on “endemic” corruption in Jilin province.

“The somewhat dated media reports you attach make various statements, but my client has no confidence any of them are true,” lawyer Carpick said. “Anyone who places any faith in the accuracy of media reports from the PRC (China) would be wise to remember that freedom of the press does not exist there.”

Chinese media reports focus on Sun’s humble background as a hairdresser whose fortunes abruptly changed around 1990. Sina Finance reported that after meeting a person reportedly connected with a manager of Jilin’s branch of the Industrial and Commercial Bank of China, which is China’s largest bank, Sun founded Jilin Heng Enterprise Group in 1995. He was 27. In a few short years, Sun’s conglomerate acquired a number of former state-owned enterprises, including semiconductor plants and factories that produced tractors, light bulbs and wire, according to Sina Finance and business documents cited by the media outlet. Soon Sun moved into pharmaceuticals and retail chains.

In 1999, he founded Jilin’s largest supermarket chain. Sun’s supermarket chain faltered when Walmart arrived in Jilin, according to Sina Finance, and Sun faced a cash crunch.

A number of reports allege that some Jilin Heng companies were financed through loans obtained fraudulently. In one case, Caijing cited business documents and reported that Sun was connected to “dubious” venture agreements for a business that “does not exist.”

Jilin City, China.

Yet, by 2001, Sun’s conglomerate was counted among China’s top 100 private enterprises. That year, Sun was a representative for the National People’s Congress for Jilin City, public documents in China say.

Around that time, Industrial and Commercial Bank launched a nationwide audit and irregular loans were discovered in the Jilin branch. According to a statement quoted by Sina Finance, the Industrial and Commercial Bank of China audit commission alleged: “Since 1994, Jilin Heng Enterprise Group Co. Ltd. and 13 affiliates, used a variety of techniques in conspiracy to defraud banks. By the end of 2002, the Group’s total Industrial and Commercial Bank of China provincial branch loans stood at 2.8 billion yuan” — about $500 million Canadian.

Reports say that police arrested a number of Sun’s business associates in Jilin. Sun was not arrested and apparently had left China by 2003, Sina Finance reported.

The first known corporate record tied to Kevin Sun in B.C. is his August 2004 registration of the Qiji real estate investment firm. Court testimony by Qiji employee Jiang provides the most-detailed account of Sun’s ventures in or before 2004.

“I was already doing things together with Kevin Sun,” Jiang testified in 2008. “In the beginning, we tried to start an investment company. That investment fund company is for the China real estate market. We also conducted market research in supermarkets. Kevin Sun back then also had an idea he would want to run a soccer gambling club.”

Jiang’s testimony does not make clear if Sun’s earliest plans were for an investment fund for Chinese investors to buy B.C. property, or for investors in B.C. to buy Chinese real estate. However, a Bloomberg News profile of SunOil Ltd. president and chairman Kevin Sun says that in 2015 he had been in the resource industry for 10 years and “during this time Mr. Sun has been active in the international real estate markets as an adviser.”

‘Multiple regulated entities’

In Sun’s Richmond home around 2005, according to Jiang’s testimony in 2008, he and Sun discussed a land deal for the 2400-block of Southwest Marine Drive in Vancouver. Qiji would own the property. But Sun wanted Jiang to sign a mortgage for the home to get “favourable” terms, according to Sun’s legal claim. Also, Sun wanted Jiang to use his name on the home’s title. The reason, according to Jiang’s testimony, was so Sun and Qiji could use Jiang’s first-time homebuyer tax benefits.

Jiang sought assurance that he would get about a 10-per-cent share of the Marine Drive flip profits and similar terms for all the other deals he would complete for Qiji and Kevin Sun. Although no contract was signed, Jiang claims that through Chinese cultural understanding, Sun verbally agreed.

Jiang testified that Sun told him: “‘Bobo, you have peace of mind when all this is done and over with, what you are going to make is not going to be less than $200,000.’”

The Marine Drive home was bought in December 2005 by Bo Jiang for $1.09 million, title documents show. It was listed for sale in April 2006 and sold in September 2006 for $1,368,800.

But legal filings in the case say Jiang paid net sale proceeds of $492,257 to Kevin Sun’s wife Ling Lin and $10,000 to Qiji.

In a contract dispute that arose in 2007, Qiji Investment Ltd. and Sun sued Jiang, alleging he unjustly withheld $137,000 of sale proceeds.

In his statement of defence, Jiang said: “Sun did not wish to proceed with the Marine Drive Project, with the property registered in the name of the company, because Sun believed that the taxes that would be incurred by the company … would render the project less profitable.”

The parties agreed in 2008 to a dismissal of the lawsuit.

Sun Commercial lawyer Carpick said “I rather doubt that the public is interested,” in the Kevin Sun vs. Jiang case, when asked if Sun would answer questions.

In a brief emailed response to a list of questions forwarded by Postmedia, Carolyn Rogers, B.C.’s top real estate regulator and CEO of B.C.’s Financial Institutions Commission, said the case “involves multiple regulated entities.”

“Trustees and beneficial owners, as well as anyone assisting them, must comply with all applicable laws and must not commit tax fraud or mortgage fraud,” Rogers stated.

Rogers said that she would forward the Marine Drive case to B.C.’s Real Estate Council. She said the RCMP, Fintrac (Canada’s anti-money laundering agency), the Canadian Revenue Agency, and B.C. Securities Commission could all answer questions on various aspects of the case. All the agencies were contacted by Postmedia, but none would say whether it would investigate the Marine Drive deal.

“The CRA cannot provide an opinion on the aspects of the transaction described,” Canadian Revenue Agency spokeswoman Colette Turgeon said.

Turgeon stated that generally: “An employer of an employee who is a first-time homebuyer cannot claim the homebuyer’s tax credit.”

In the court case, Kevin Sun’s lawyer quizzed Jiang on a number of cash withdrawals connected with the Marine Drive Royal Bank account, and pointed to a number of large deposits from Kevin Sun, ranging from $10,000 to $30,000.

Jiang said some transactions were for Qiji’s Marine Drive project. He told the court that Sun gave him only large amounts to deposit on Sun’s behalf, and other cash withdrawals were taken out for Sun for unidentified purposes.

“It was not about other projects. It was payment for other purposes,” Jiang said. “I don’t know how to explain to you because Kevin likes to do things this way. Whenever he want cash, he would want me to do something like this.”

Jiang also testified that “we have already conducted a lot of projects,” before the Marine Drive deal and “during some of our very early projects it was this realtor who introduce us to meet the branch manager of Royal Bank.”

The real estate agent, who was only identified in the transcript by his surname Cheung, was believed to be from the Sutton Group Richmond office, Jiang testified.

Jiang’s testimony seems to raise questions about whether real estate agents and bankers regulated by Fintrac and subject to Canada’s anti-money-laundering laws would have completed proper due diligence or would have needed to report suspicious or large cash transactions linked to Kevin Sun.

According to guidelines on Fintrac’s website, a number of aspects of the Marine Drive deal and Jiang’s testimony about Sun’s property investments apparently could have raised red flags for a reasonable professional. For example, Fintrac advises that any real estate transaction in which the buyer is foreign and their purpose is to invest rather than live in a home could be reported. Also, if a non-Canadian home purchaser buys multiple properties in a short time-period, uses a shell company, or attempts to remain anonymous, red flags could be raised.

Management at Sutton Group in Richmond was asked whether it could identify a realtor named Cheung allegedly involved in deals with Kevin Sun and Bo Jiang. Brokerage owner Scott Russell, who is a board director and past president of the B.C. Real Estate Association, said that the office does employ a realtor named Cheung, and Russell did not recognize the names of Kevin Sun and Bo Jiang.

“I don’t know anything about it,” Russell said. “I don’t know what I could add.”

Fintrac would not say whether it received any suspicious transaction reports in connection to the Marine Drive flip case or whether it will investigate.

“This is not for Fintrac to answer as it is not an investigative agency,” a spokeswoman said. “The police would be better placed to address questions relating to possible criminal offences.”

However, regarding Fintrac’s due diligence rules, spokeswoman Renee Bercier said “financial entities must also use reasonable measures at the opening of an account to determine whether a third party, other than the account holder … is directing what happens with the account.”

The Marine Drive case also seems to highlight the vague, failed regulatory structure of B.C.’s real estate industry. After a damning independent report into shady industry practices, Premier Christy Clark recently announced a complete overhaul of real estate regulation.

Rogers, the head of B.C.’s Financial Institutions Commission, was not able to tell Postmedia whether she, as superintendent of real estate, is the regulator of Kevin Sun’s company Qiji, the related real estate company Sun Commercial and those involved in the negotiation and marketing of deals associated to Kevin Sun’s various investment companies in B.C. 

Aside from regulatory questions surrounding the Sun vs. Jiang case, about 80 pages of Jiang’s testimony under oath provides unique insights into Kevin Sun’s early deals and investment methods. After Jiang was examined, Jiang’s lawyer asked to examine Sun. Sun did not testify. 

Chinese media reports in 2004 referred to a “maze” of financing connected to Sun’s many companies. Similarly, in 2008, Jiang claimed in court that to explain his employment terms and provide accounting for Sun’s projects on “many pieces of land” would be an extremely complex task.

“It is quite a complex issue because some were related to Qiji, but others were related to companies owned by him. Because when he conducted real estate projects, for each project he would register an individual company,” Jiang testified. “Everything was merged together. His individual ventures, ventures by his own company, or ventures where he would co-operate with other people.”

Jiang, who now is a licensed realtor but was not in 2005, was contacted by Postmedia. He said he did not want to comment on the Marine Drive deal or answer questions about Sun.

One of the properties that Jiang referred to in court, a 94-acre farm in Richmond, was raided by the RCMP in 2008 in connection to an alleged meth lab and marijuana grow op. The Richmond Review unsuccessfully attempted to contact the landlord, Qiji Land Syndicate, and its sole director Hong Wei Sun, a 2008 news story said. Cpl. Dennis Hwang of the Richmond RCMP told Postmedia he could not answer any questions about the outcome of the case.

One associate said that in B.C., Sun seems to be repeating the style of business he started in Jilin.

“He is an opportunist. You know, in Jilin he bought factories very cheap and he sells it for the real estate value and then leaves,” the associate said in an interview. “Now he moves very fast from buying farmland to flipping houses to flipping commercial property. If a developer from China wants to develop in Vancouver, Sun buys the land first and sells it to them. He is very secretive and smart.”

An associate of Sun told Postmedia: “In Vancouver, it is not just Kevin, though. There is hundreds of people similar to him.”

The belief that there are hundreds of real estate investors in Vancouver who are under suspicion in China is shared by Canadian law enforcement sources.

“Sometimes we ask ourselves if we’ve already lost the battle,” one such source said. “I think this guy is just part of a large network.”

A maze of B.C. land deals

 After examining many hundreds of pages of corporate, legal and land documents connected to Kevin Sun, a visual metaphor helps to focus the picture. Revolving around Sun are a handful of key people, luxurious homes and Metro Vancouver properties with highrise potential. The people, homes and land are connected to about 14 investment companies which are related to Sun Commercial. If Kevin Sun is the centre of this financial solar system, the planets orbiting him are connected in highly fluid relationships where personal names, corporate locations and company names and directorships constantly change. In one simple example, Sun’s land company Qiji has had five different name variations. 

Kim Marsh, executive vice-president of IPSA International: ‘This case has many alarming red flags.’

Kim Marsh, executive vice-president of IPSA International and a former commander of a RCMP international Organized Crime Investigation Unit, said at the conclusion of a year-long joint investigation by Postmedia News and IPSA: “This case has many alarming red flags.” 

“The modus operandi outlined in this case is similar to some of the operations that are using the Canadian real estate market to launder money,” Marsh said. “This situation begs many questions including, what happened to the visa vetting process, banking compliance, public company scrutiny and regulators of all sorts.”

Property documents indicate investors linked to Kevin Sun own or have owned well over $100 million in Metro Vancouver residential property, and some of these luxury residences are linked to Sun investment companies. Land records indicate that over $500 million in B.C. property has been bought and sold through companies related to Sun.

Additionally, Kevin Sun’s company SunOil has allegedly claimed in meetings with immigrant investors in the B.C. provincial nominee program, to possess over $1-billion in North American oil and gas reserves, according to an action in B.C. Supreme Court. 

Kevin Sun incorporated Sun Commercial in September 2013, and made De Xue Guo a co-director. Around the time he joined Sun Commercial, according to corporate records, De Xue Guo changed his name to Davidson Guo. Davidson Guo is listed as owner of 6050 Chancellor Blvd., a $2.5-million UBC area duplex purchased in 2010. As SunCom president and CEO, Guo does not answer media questions, SunCom staff said.

The house at 3899 Cartier St., in Vancouver.

Oakridge Centre realtor Denise She and the many properties and companies registered to various spellings of her name are central to Kevin Sun’s real estate investments. Denise Den She, who is called a “long-standing” friend and business associate of Qiji principal Kevin Sun in legal filings, is owner of 3899 Cartier St., a $12.9-million property in Vancouver’s Shaughnessy. Among her many Metro Vancouver property holdings, Denise She’s investment company She2006 Investment owns seven condos on the 7000-block River Road in Richmond. Additional Sun associates include SunOil Ltd. director Hai Feng Zhu, who is the listed owner of #5104 — 1128 West Georgia St., a $3-million Shangri-La Estates penthouse in downtown Vancouver. The penthouse is linked in corporate filings to a controversial SunCom property flip on Vancouver’s Nelson Street, and is also listed as the corporate address for Sun Commercial director Hui Zhen Fei.

6695 Dunblane Avenue, a lowrise apartment in Burnaby that could be replaced by 40-storey tower.

SunCom’s former vice-president Julia Lau — a former top B.C. realtor who claimed in SunCom ads to have sold $560 million worth of luxury residences from 2009 to 2014 — was one of the investors in a 2014 SunCom land assembly in Burnaby along with her business associate Mailin Chen. Mailin Chen, formerly a duck farmer in Nanjing, and his investment company Chungwa have owned or flipped 13 properties in B.C. since 2009, and Chen owns a $51.8-million Point Grey mansion. SunCom associates and investors bought 6695 Dunblane Ave., a three-storey Metrotown apartment building, for $9.36 million. The Dunblane property was flipped for $12.3 million in February 2016 — $4 million over assessed value — to Transca Development Ltd., a company incorporated in November 2015. Transca, which is authorized to issue preferred shares worth $100-million according to documents, has now made a rezoning application for a 35- to 40-storey tower on the property. 

Another Jilin Case With Vancouver Connections

Aside from its investigation of Sun Hongwei’s businesses, Chinese business magazine Caijing has published a number of stories on deep-rooted corruption in Jilin that were cited in a confidential 2008 report sent to the U.S. Central Intelligence Agency. Describing “endemic” rot reported by the “hard-hitting Caijing magazine,” the report says: “Northeastern Chinese of all stripes bemoan official corruption as a fact of life here. Hardest hit has been Jilin province.”

One such corruption case involved a $130-million bank fraud in northeastern Jilin and neighbouring Harbin, committed by Bank of China branch manager Gao Shan and his co-conspirators, businessman Li Dongze and Dongze’s brother, Li Donghu.

Companies including Northeast Expressway, a state-owned highway company, had looted money from a bank branch in Changchun City. When bank auditors discovered missing funds, the three men fled to Vancouver in 2004 to join family members. China requested the RCMP’s assistance in their return. Gao and Li Dongze were eventually persuaded to turn themselves in to Chinese police on fraud and forgery charges.

Other suspects in the case were charged with blackmail, bribery and drug dealing. Chinese newspapers reported that Li Dongze attempted to bribe and blackmail Chinese officials while hiding in Vancouver, before returning to China in 2012. Li Dongze, Li Donghu, and Gao Shan have all been convicted and jailed in China.

Overall, the confidential U.S. government report paints a depressing picture of life in Jilin. Ten of the province’s top judges were prosecuted for corruption in the mid-2000s, the report says, along with many top politicians, police, and the heads of state-owned companies. Several people connected with the Northeast Expressway fraud committed suicide, and the company’s chief was sentenced to death. The report also said collusion between police and Chinese mafia in the Jilin region is common.

Ipsa International

Ipsa is a company that works with foreign governments and banks to investigate financial fraud and recover offshore funds. The company employs an international staff of investigators, and has also worked with governments and banks to improve fraud detection networks and compliance.

Home sales dropped in Metro Vancouver by up to 86 per cent after the introduction of the foreign investor tax on Aug. 2, according to official MLS data only available to realtors.

The Multiple Listing Service data obtained by Postmedia News and anecdotal information from 10 real estate agents suggests that the region’s previously ultrahot market for single-family houses has frozen solid. Some luxury homeowners have already slashed their asking prices in order to quickly escape dangerous market conditions.

“The detached market has just fallen off,” said realtor Steve Saretsky. “It’s crazy. It’s actually scary. The week the tax was announced, it went dead across the board.”

And in an indication of just how powerful a force offshore buying had become in the Lower Mainland, MLS figures shows that the high-priced areas with the highest percentages of foreign buyers — according to government statistics and real estate agents — are now suffering the steepest drop-offs.

“The offshore tax just put on the brakes,” said realtor Nirma Desai, who sells homes in south Surrey. “The offshore buyers became a huge portion of the market. They were the driving force.”

Some examples of key markets for offshore buyers:

• Richmond. From Aug. 1 to 15 last year, Richmond had 89 detached sales. For the same period this month, 12 homes were sold.

• West Vancouver: Last year, 59 detached homes were sold during the first half of August. This year, nine.

• Vancouver’s west side: 72 detached homes were sold in the first half of August 2015, but only 15 this year.

And realtors said they expect the second half of August to be even slower, as foreign buyers rushed into the market in late July and the first day of August to beat the introduction of the 15-per-cent tax.

It is a different story in Abbotsford, which borders Metro Vancouver but is not subject to the new tax. Forty-five detached homes were sold in Abbotsford the first half of this month, one more than the 44 sold in Vancouver and West Vancouver combined, and down only 19 per cent from the first half of August in 2015. In Squamish, an increasingly popular market that is outside the Metro Vancouver tax zone, detached home sales in August 2016 are equal to August 2015.

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Meanwhile, with Metro Vancouver buyers now demanding discounts in a slowing market and offshore buyers either leaving or making lowball bids, some realtors say they are advising clients to cancel listings and come back in September, a month which usually has brisk sales.

“I’m telling all my clients, if we’re going to do anything, let’s come back in September,” Desai said. “I think the offshore buyers are being savvy right now, and playing a waiting game.”

Desai says she’s cautiously optimistic sales will bounce back in September after the shock of the new tax wears off.

Steve Saretsky says this optimistic view is held by many realtors.

“I might be the only one willing to accept that it might be a crash,” he said. “But I think a lot of realtors have the conception that it will pick back up in September.”

Saretsky says he worries that all the inventory pulled from the market in August “because nothing is selling” could pile onto September’s normal housing supply and skew the market even further in favour of buyers.

Prices rose in Metro Vancouver by 30 per cent in the past year. But Saretsky notes that in Tsawwassen, where his mother is a prominent realtor, veteran realtors say that surreal price rises of 48 per cent last year were driven mainly by buyers with links to Mainland China. Over the past 60 days, the only successful sellers in Tsawwassen were ones that dropped their prices sharply, Saretsky’s MLS data shows, sometimes by over $300,000.

He says that if September also experienced steep sales drops across Metro, more realtors would be convinced a serious correction was underway.

Brent Eilers, a veteran West Vancouver realtor, says that based on reported sales across Metro Vancouver he can already predict that the average prices of detached homes for August will be down between 15 to 25 per cent. Those figures roughly agree with the “real-time” average prices for August 2016 posted online by a national real estate firm, Zolo.

Eilers cautions though, that it is “a bit unfair” to judge the market on a 30-day period.

Regardless, choosing his words carefully, Eilers repeatedly said that he is advising his sellers — many of whom are downsizing baby boomers — to sell sooner, rather than risk being caught in a severe correction.

“The tax grossly expanded a shutdown in the market that was already happening,” he said.

Eilers draws on 35 years of market history and four different corrections to advise his clients of a range of possibilities.

In 1980, mortgage interest rates rose as high as 21 per cent, dropping prices from 40 to 60 per cent over six months in a gut-wrenching correction that took years to recover from, Eilers says. In the next three corrections, including 2009, prices dropped about 10 to 25 per cent and recovered within about 18 months to new highs.

The similarity in all cases, he says “is the urgency or fear drifts from the buyers to the sellers overnight, and prices always follow several months after the slowing in sales. That is why it’s so dangerous.”

Even though interest rates are unlikely to rise this time, Eilers fears that banks will not extend loans to local buyers with relatively low incomes if rich offshore buyers who have driven the market suddenly disappear due to the tax.

“The structure of the current market suggests it could go” to a 1980-type correction, Eilers says. “What I see suggests that this correction could be more significant than ones in the recent past.”

Danny Evans, a Langley-based realtor, says in some areas he has seen sales drop by 95 per cent in August and buyers are only making lowball bids.

In one case, a Vancouver property he listed had received offers of $2.3 million and $2.45 million. “The day after the tax was announced, the offer was for $1.7 million,” Evans said.

Evans said he is optimistic sales will bounce back in September because he believes offshore buyers will find ways around the new tax. He said he has already seen that happen in one sale that he feared could collapse after the tax.

“I’m sure there is a lot of people that will no longer go on title, but there still will be money coming in from China,” he said. “It all now will be under the table, and there will be side deals for the people that are going on the title (as owners).”

Meanwhile, lower-priced Metro Vancouver homes, including condos and townhouses, are still selling in a slowing market, realtors say.

Stephanie and Corey Goudriaan, a couple in their early 30s, say they were happy to sell their Surrey condo in early August at a slight profit.

Stephanie Goudriaan says the couple is living with her parents while they consider whether to dive back into the market for a townhouse, or rent while hoping for a market drop.

“We are confused to be honest,” she said. “It’s a crazy market. After being in for six years, it feels like to stay out is a gamble, and not to get back in is a gamble.”

UBC real estate economist Tsur Somerville says he believes that the offshore buyer tax slowed sales, but he would caution against reading too much into August statistics.

“It was a dramatic intervention,” Somerville said. “Part of that could be the foreign buyers (exiting the market) but more critically I think it is people saying ‘I don’t know where this is going, let me wait it out.’ So that would cause a drying up in market liquidity in August.”

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The B.C. government says it is premature to judge the effect of its foreign buyer tax, even as figures show that sales of detached houses in Metro Vancouver have plunged since the tax was introduced on Aug. 2.

“It’s too soon to conclude how the real estate market has responded to the additional tax,” said a statement on Thursday from the ministry, which has been criticized for abruptly introducing the tax. “The intent is to slow the rate of price growth and cool demand.”

Postmedia News reported this week that MLS figures show sales of single-family homes in Metro Vancouver home plunged by as much as 86 per cent in the first half of August, compared to the same period in 2015. Sales drops were steepest in markets where foreign buyers are most dominant, such as Richmond and West Vancouver.

The question now is whether significant price drops will follow the steep falls in sales. Already, sellers of luxury homes have had to lower their asking prices, MLS shows.

Vancouver Point Grey MLA David Eby, the NDP housing critic, said he believes the government intended to shock the market.

“Of course, they wanted to cause a panic, and they’ve got what they wanted,” Eby said. “And the only question is whether they will see it through or back off if polls go against them.”

UBC real estate economist Tom Davidoff said he believes Victoria might reduce the 15 per cent property transfer tax to 10 per cent, which is allowed in the tax legislation, if Metro Vancouver home prices drop dramatically in coming months.

“When I was told about the tax my reaction was ‘Wow, that is bold.’ It was like a megaton bomb,” Davidoff said. “It is consistent with shocking the system, and it was a loud and clear message.”

As soon as the tax was introduced in late July, the Greater Vancouver Real Estate Board complained the government had moved too rapidly and without consultation.

“I personally was shocked. Everyone was,” realtor Steve Saretsky said. “A lot of people were saying ‘They are going to kill the market. What are they doing?’”

“When a tax policy decision is made, there may be those who feel that the timing of the change should be different,” the ministry statement said. “We’ve found that the fairest and most efficient date for a change is usually to begin immediately after, or as soon as possible after, the change has been announced.”

While sales dropped 82 per cent in Eby’s Kitsilano riding in August 2016 compared to August 2015, he said homeowners there still don’t believe prices will drop sharply. In an indication of the changing market though, one of the sales this month was of a house in the 4000-block of West 15th Avenue that was listed for $4 million, but sold for $3.8 million. In comparison, in August 2015 a nearby West 12th Avenue home was listed for $4 million and sold for $5.86 million.

While the consensus of Point Grey residents seems to be that the market will pick up in September, Eby said, “I talk to many people who openly say they want a crash so that houses reflect local incomes and they can potentially raise a family in Metro Vancouver.”

Eby said an NDP government would take other measures to regulate the housing market, including taxing property transactions for offshore investors who represent themselves on land titles as “students” or “housewives” and likely pay little or no income tax in B.C. The NDP would also set up a money laundering and tax evasion unit, which Eby believes would generate revenue through seizing real estate assets related to crime, and collecting back taxes.

Realtors who are optimistic that Metro Vancouver home sales will bounce back in September note that a 15 per cent tax isn’t much of a deterrent to rich offshore buyers who have paid millions of dollars over asking prices in the past year.

But UBC’s Davidoff said he thinks the tax could prove very powerful by signalling to offshore investors that B.C.’s reputation of being an easy place to park money with “few questions asked” is a thing of the past. 

“In my opinion, if you take away the foreign buyer, I don’t know how prices don’t correct from 25 to 50 per cent,” Davidoff said.

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