Anti-money laundering policies at B.C. colleges and universities under review

Cash-for-cheque swaps done by institutions could facilitate money laundering, report concluded

Nearly 400 post-secondary institutions in B.C. will be asked by the provincial government to report their cash transaction policies in an effort to better understand anti-money laundering measures in the sector.

Minister of Advanced Education Melanie Mark announced Tuesday (May 28) she will have 25 public post-secondary colleges or universities and 342 private, career institutions report to her within one month.

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“We’re asking them to review their policies and take corrective action to close any loopholes,” said Mark.

The announcement followed two reports on money laundering in the province, one of them an independent, government-ordered study by Peter German, a retired RCMP deputy superintendent, alleged money-laundering activities in real estate and other numerous “vulnerable sectors,” including post-secondary institutions.

German outlined several cash-for-cheque tactics students may be using to launder proceeds of crime. For instance, some schools reported students overpaying for fees and then asking for a refund by cheque. Others will pay for multiple semesters at once, then withdraw before the deadline.

In one instance, German was told a lieutenant of drug cartel kingpin Joaquin “El Chapo” Guzman allegedly registered at a private college in Vancouver, as a cover for his illicit activities.

“692 tip files which we received also referenced the willingness of private colleges

in Greater Vancouver to accept cash for tuition fees and for other purposes,” German wrote. “Tuition for an international student tends to be a minimum of $7,000 to $10,000, before living and other costs.

“Some private and public colleges accept cash from domestic and international students for tuition fees and for other purposes,” he concluded in the report, titled Turning the Tide – An Independent Review of Money Laundering in B.C. Real Estate, Luxury Vehicle Sales & Horse Racing. “Some students have dealt with colleges through nominees and have engaged in schemes to convert cash.”

The report states there is no suggestion institutions are knowingly facilitating money laundering.

Mark downplayed the role of international students, not wanting to “single them out.”

International student numbers reached an all-time high in 2018 in B.C. On Dec. 31, 2018, there were more than 134,000 foreign nationals with a valid study permit with British Columbia as their “intended destination,” according to the federal government. A record 82,140 students were admitted into B.C. in 2018. 

“Some institutions don’t accept cash; some do. So we’ll need to level the playing field,” said Mark.

Attorney General David Eby, who recently launched a two-year public inquiry into money laundering in B.C., said colleges are not required to report large cash transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

He said collecting information on how post-secondary institutions handle cash transactions is “one piece of a larger array of anti-money laundering” efforts underway. Mark said the government is conducting an audit of all industries.

Eby announced May 15 Justice Austin Cullen has agreed to lead what will be known as the Commission of Inquiry into Money Laundering in British Columbia, which is expected to produce a report in May 2021.

 

gwood@glaciermedia.ca

 

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