By Ng Weng Hoong
In Sam Cooper’s world, every Chinese person is either a Communist infiltrator, a murderous criminal, a triad drug dealer, an arms smuggler, a casino money launderer, a gambling addict, a human rights-abusing politician, a housing speculator, or a helpless victim to all of the above. According to his best-selling book, Wilful Blindness, these people have found their way into Canada and the West.
In case readers think this portrayal is racist, Chinese human rights activist Teng Biao has written a two-page defence that it is not. In the introduction on page xv, Teng assures readers that “it is ridiculous” to conflate anti-Chinese “racist narratives” with criticism of Beijing and the Chinese Communist Party (CCP).
With that disclaimer, Cooper is freed from political correctness to frame Canada’s China Question as an outright struggle between good and evil. His 460-page book has no room for nuances or cautionary reflection. There is no mention of Canada’s long history with systemic racism and Sinophobia, and nothing about the anti-Asian hate currently sweeping across North America and Australia. Sinophobia is really a fabrication of the CCP’s propaganda.
It is all but impossible to accuse the Global News star investigative reporter of balanced, thoughtful writing.
The “Vancouver Model”: China’s plot for revenge
Sam Cooper builds on Project Sidewinder to sell his “Vancouver Model” of the Chinese Threat. In the late 1990s, the RCMP and the Canadian Security Intelligence Service (CSIS) compiled a series of intelligence reports, collectively known as Sidewinder, that concluded Chinese state agents and their assets had infiltrated and “corrupted Canada’s institutions and markets” (page 63). For reasons not fully known, Project Sidewinder faded away and was largely forgotten until recently.
In the Vancouver Model version, the CCP’s United Front Works (UFW) Department is the mastermind of the new elevated threat to the West. The UFW controls a global network of agents, spies, influencers, tycoons, criminals, and pro-CCP elements that Cooper argues has thoroughly infiltrated Canadian society since the late 1980s.
An anonymous source—among many cited throughout his book—sees China prosecuting “the Opium Wars in reverse” (page 49). The source speaks of a long-term CCP plan for revenge against the West for having carved up and colonized China during the two Opium Wars in the 19th century. By selling narcotics to their host countries, the infiltrators—Chinese government officials, tycoons, criminals, and some members of the diaspora—aim to weaken western societies and strengthen China while enriching themselves in the process.
The proceeds of crime are laundered through Metro Vancouver’s casinos and real estate markets, earning more “threat-financing” profits to fund the UFW’s operations, says Cooper (page 341). This has been going on for over three decades because the UFW has bribed or influenced Canadian officials at all levels to look the other way, from the prime minister down. In brief, Canada is completely compromised, and “the Chinese” are taking over the country.
According to Cooper, the CCP began implementing its master plan after the 1986 World Expo in Vancouver when the British Columbia government courted rich immigrants from Hong Kong, Macau, and other parts of Asia to invest in the province. The CCP seized that opportunity to mobilize Chinese tycoons, triad members, money launderers, and members of the diaspora to do its dirty work in Canada.
“The Vancouver Model couldn’t function without the blessing of officials inside China,” he writes on page 43.
I will address Wilful Blindness’s Chinese-scapegoating messaging and insidious Sinophobia another time. In this review, my critique is focused on the wilful blindness of Cooper’s selective reporting.
Released by Optimum Publishing in May 2021, Wilful Blindness has won rave reviews from some influential people. They should read it again with a more critical eye.
The book is remarkable for its astonishing number of sweeping statements that are unsubstantiated, distorted, exaggerated, or downright false. As there are just too many, I will cover only some of them here.
Buried in between long paragraphs of details, these nuggets of disinformation are intended for easy consumption. Their effect is to distort and sensationalize an already difficult discourse about China and the Chinese Question.
Here is a selection of endorsements that is helping to sell Cooper’s wilful disinformation.
Charles Burton, a former Canadian diplomat and proclaimed China expert, wrote the foreword praising Cooper’s “relentless painstaking work” in constructing the Vancouver Model.
Alex Joske, a well-regarded China analyst at the Australian Strategic Policy Institute, praised its “eye-opening examination of Chinese organized crime and the Chinese Communist Party.”
Clive Hamilton, an Australian academic who has himself written about the CCP’s ‘silent invasion’, described Cooper as a “terrific investigative journalist, with scoop after scoop”.
Paul Finch, treasurer for the powerful British Columbia General Employees’ Union (BCGEU), wants Wilful Blindness to be mandatory reading for anyone interested in Canadian politics and economics.
James Cohen, a leading anticorruption figure who heads Transparency International Canada, said he had “the pleasure of reading an advance copy of…Wilful Blindness”.
Meena Wong, a former Chinese Canadian politician, tweeted that “Sam’s book” made her angry with its revelations about CCP infiltration and money laundering.
Canadian writer Terry Glavin, who worked with the author in the book’s early stages, said he is “astonished that…Hollywood…hasn't already signed him for a big-screen treatment of this story”.
Echoing that comment, Margaret McCauig-Johnston, a Chinese-fluent analyst, wants Netflix to turn the book into a miniseries.
The Vancouver Sun’s self-proclaimed “diversity expert” Douglas Todd gushes over the book being a No. 1 bestseller on Amazon.ca while the National Post’s Sabrina Maddeaux uses it to beat the federal Liberal Party government for letting “a narco state to fester under their noses”.
China’s oil trade
On page 125, Cooper writes that Chinese crime boss Lai Changxing “was allowed to monopolize China’s oil trade with his access to the country’s military vessels and ports”.
This is false. No company has ever monopolized China’s oil trade. Given that oil is strategic to China’s national security, Beijing will never allow a single entity to dominate energy supply, especially one that was run by an out-of-control maverick entrepreneur turned criminal.
The world’s biggest money launderers
“Baccarat was the primary channel for money-laundering in B.C. casinos.” (page 179)
So, what happened when the B.C. government raised the bet limits for baccarat card gambling from $25 per hand to $500 in 1997 and to $100,000 in 2014?
According to Wilful Blindness, “if you raised bet limits, you opened the flood-gates wider and attracted the world’s biggest money launderers.”
This raises some interesting questions.
Does Cooper know who the “world’s biggest money launderers” were in 2014 and today? Did they all visit Metro Vancouver’s casinos after the betting limit was lifted? Can he confirm that baccarat is their “primary channel” for laundering money in B.C. casinos?
Why would “the world’s biggest launderers” hustle over $100,000 card games in Vancouver when they can far more efficiently—as they have always done—wash billions through the capital markets or the arms trade that are worth trillions of dollars? Also, why would all these big money-laundering bosses make in-person appearances at casinos knowing that they will be captured on surveillance cameras and tagged?
The world’s richest and most powerful people
On pages 2 and 3, Cooper reports that 100 foreign VIP patrons came to gamble at Metro Vancouver’s main casinos in 2015.
“These visitors were among the richest and most powerful in the world,” he declares.
According to Forbes, the world’s richest people in 2015 included Bill Gates, Jeff Bezos, Mark Zuckerberg, Carlos Slim, Jack Ma, Warren Buffett, Charles and David Koch, Michael Bloomberg, Larry Page, Sergey Brin, George Soros, Prince Alwaleed, and Rupert Murdoch, among others.
Representing the most powerful (in 2015 were Vladimir Putin, Angela Merkel, Barack Obama, Pope Francis, Xi Jinping, Janet Yellen, David Cameron, Narendra Modi, Mario Draghi, and other politicians.
Based on Google checks, there were no reports that any of these world’s richest or most powerful people visited Metro Vancouver casinos in 2015. Could they have sneaked into the River Rock Casino in disguise for a desperate game of baccarat with the rest of the rich and powerful? Imagine the Pope, Gates, Putin, Xi Jinping, Merkel, Bloomberg, and Murdoch huddled inside a smoky room trying to hustle each other at their favourite card game.
The "epicentre" of money laundering
The alleged “mind-blowing” money-laundering activities at the River Rock Casino in the B.C. city of Richmond are among Cooper’s most popular stories about the Chinese Threat. His reporting was so alarming that it contributed to the B.C. government’s 2019 decision to launch an inquiry into money-laundering in the province, with the casinos a major focus. It also landed him and his colleagues a Jack Webster award for “Excellence in Feature/Enterprise Reporting” the same year.
On page 280, Cooper reiterates his winning theme: “B.C.’s River Rock Casino has been called the epicentre of money-laundering by international organized crime groups.”
Who are these international crime groups? He does not name any nor mention if they are prepared to share their data to prove his claim that the River Rock is the epicentre of money laundering. The reader must accept yet another of his unsubstantiated sweeping claims.
Even when the sources are identified, the information published in Wilful Blindness is beyond dubious.
In 1997, Muriel Labine, a supervisor at the River Rock Casino, started keeping a journal.
On page 95, citing her journal, Cooper writes: “A senior shark would have 40 to 50 boys working as runners to distribute heroin cash to high-rollers.” This implies there was more than one senior shark, each with his own team of up to 50 runners.
According to Labine, the runners earned about $10,000 per month, suggesting it would cost at least $500,000 a month to maintain a team, and this is before other expenses are counted.
She adds that a senior shark must “return” $3 million in laundered funds per month to the cartel, implying his total cost of operation could easily top $4 million.
None of these numbers are verified.
Then she writes that the senior shark “was allowed $2 million in ‘overhead’ for gambling losses”.
This is a real head-scratcher. Why $2 million, and not 50 cents or $3 million? What is to stop the senior shark from pocketing $2 million in “gambling losses” every month? How does the triad make money if its sharks are allowed such a generous loss on top of runners’ salaries and the monthly return of $3 million in laundered funds to the cartel?
Cooper does not explain the peculiar, concocted economics of this high-risk, labour-intensive money-laundering operation.
For any serious publication, Labine’s method of gathering information would be cause for alarm. Not for Wilful Blindness and its publisher. On page 95, she is quoted as attributing vital information in her journal “to an unnamed co-worker” who is “close to a senior loan shark” who allegedly cites a “high-ranking Big Circle Boy” gang member. In short, she relied on hearsay and gossip. But all this is great material for Cooper, who in his wilful blindness, readily accepts her word as authoritative. Readers should take note that this is being passed off as investigative journalism by one of Canada’s award-winning reporters.
For helping him fill up the blanks about the Richmond casino scene in the late 1990s, he immortalizes Labine on page 90: “She was on the frontlines of a major geopolitical shift.”
On page 267, Ross Alderson, the B.C. Lottery Corporation's former anti-money-laundering director, recounts his interview with a whale gambler who lost $57 million at the casino over a two-year period. Apparently, the man, who lives in Canada and owns mining conglomerates in China, did not satisfactorily explain why he was prepared to gamble and lose so much money.
He was not the only one. According to the Gaming Policy and Enforcement Branch (GPEB), there were 60 to 80 whales who gambled between $100,000 and $1 million per session. They would gamble for a few months, return to China, and come back again.
An incredulous-sounding Cooper asks on page 268: “What kind of businessman would bet like this?”
The inference is that these wealthy Chinese people were likely criminals or drug dealers who were secretly laundering money. His assumption is that no rational rich people gambled to lose.
Did Alderson and Cooper consider the fact that casinos are a magnet for people with gambling addiction? This would include bored tycoons from China who are prepared to fly in, play big, and lose big.
“The staff at River Rock was allowing this, and BC Lottery Corp wasn’t doing anything. I believe it was being encouraged. They were flying people in.”
Indeed, they probably were flying these whales in. Sadly, that is the nature of the business. Casinos hit the jackpot when they can lure people, especially the wealthy, to gamble with abandon. Some could well be criminals, but the majority are likely not.
Given their concerns with crime, did Alderson or the BCLC study the profile of Metro Vancouver’s casino whales, particularly the 60 to 80 mentioned by the GPEB? How many were found to have an addiction problem? If no studies were undertaken, why not? As an experienced investigator and law enforcer, it would be surprising if Alderson did not try to learn as much as he could about these people, especially if it is such a small group of 60 to 80.
As for Cooper, has he ever addressed the scourge of gambling addiction in his casino stories? The assumption in his reporting is that every big gambler, especially if it is a whale, is likely a criminal and Chinese. With the proliferation of online gambling and casinos over the past two decades, could addiction be the far bigger threat to Canadian society than money-laundering? Also, would unmonitored Internet-based gambling be the better channel for laundering money rather than the casino?
In November 2018, B.C. attorney general David Eby was stunned to learn that federal prosecutors and B.C. RCMP would not back his high-profile campaign to prosecute what would have been the biggest money-laundering case in the province’s history. Richmond-based Silver International Investments Limited, and its two directors, Paul King Jin and Caixuan Qin, were arrested in 2017 and were to have been charged in early 2019 for a number of alleged criminal activities, including money laundering.
For the B.C. government and law enforcers, the collapsed case represented a huge loss after years of investigations. Until that point, media reports by Cooper and other journalists had pointed to an imminent public relations win for the ambitious attorney general.
According to the CBC, Public Prosecution Service of Canada spokeswoman Nathalie Houle said the charges did not meet its prosecution test, which stipulate there be a reasonable prospect of conviction on evidence likely to be available at trial and it would best serve the public interest.
Federal prosecutors have not explained why and how the charges did not meet its prosecution test but Cooper offers his take that the safety of a key informant was at risk.
While the real reasons may never be revealed, I wonder if Cooper’s sensational stories about Silver International might provide a clue. In Wilful Blindness, he cites a secret audio recording of a 2017 private briefing given by RCMP Inspector Bruce Ward to an audience comprising U.S. Secret Service agents, financial professionals, and Canadian police.
On page 273, citing the briefing, Cooper describes Silver International as “a financial juggernaut allegedly capable of laundering and moving over $1 billion per year for the import and export of drugs”.
In the pages that follow, he shows how running a global money-laundering business for drug dealers is incredibly easy and risk-free. Not to mention extremely profitable since it is handled by one staff working out of an office in downtown Richmond.
“A single woman standing behind a desk with a cellphone and a ledger. That was it—no bodyguards with a gun,” says Ward.
The unidentified woman is also super-efficient and completely reliable. She helps drug dealers “instantly make mountains of dirty cash” in Canada “materialize in bank accounts in China, Mexico, or Peru”.
Cooper reports this faithfully without question or comment.
Ward plays a video of “a typical event” that shows a drug dealer bringing in a duffel bag containing $1.4 million in cash ready for washing. Most of the money is in $20 notes, the rest are $100s and $50s.
“She receives a call, she goes out to receive a trusted customer,” he is quoted as saying on page 274.
As described by Cooper, there is complete honesty and cooperation among criminals. Such is the level of trust that she has already wire-transferred the credit to China “before the cash even comes in the door”.
Just as remarkable, she counts all $1.4 million “by hand”, he writes. It means that she manually processes the entire amount—anything between 14,000 (if all are in $100 notes) and 70,000 (in $20s)—within the same day.
After writing the amount down in her ledger, she even “double checks” the money.
Just like that.
If this operation is laundering over $1 billion a year, how many cash notes will that staff have to count “by hand” every day? And, that is not the end of her work. After the counting, she has to put in more hours to bundle, stack, and pack all those notes.
After deducting 110 weekend days from the calendar year, she has at least 255 working days. Assuming she does not take vacation, medical, or emergency leave, she will have to process “by hand” around $4 million in hard cash every day in order to turn over $1 billion in a year. It means between 40,000 notes if they are all in $100s, and 200,000 notes if in $20s, every day from Monday to Friday.
Is it possible for one person to count so much money within a nine-hour office day? How does she remain sane doing this every day? What are the chances of her making mistakes like undercounting or overcounting the amount? How are mistakes rectified and disputes resolved? Who mediates when there is a discrepancy in the money count since this cannot be reported to the police? What is the risk of her absconding with the money or making side deals with somebody?
Ward’s story as reported in the book is clearly absurd, but the reader is expected to accept everything as undisputed fact. Cooper does not ask questions or comment. Questions have a nasty habit of ruining the flow of exciting stories.
Regardless, the holes in Ward’s story are just too big to ignore.
Apparently, neither the employee nor Silver International has any fear of being robbed despite handling the daily “mountains of dirty cash”.
“Five minutes later is the end of her shift. And she walks out and locks the door,” says Ward.
“There is no need for security because no one would know it is there or dare rob that place.”
This is truly astounding in a city notorious for never-ending violent turf wars and deadly gangland shootings.
If street-smart gangs have been using this office every day to launder over $1 billion a year, how bizarre is Ward’s claim that “no one knows it is there”? Another remarkable piece of contradiction is revealed in the description about Paul King Jin’s fleet of Sienna vans on Page 259. The vans were being driven “in an incredible beehive of daily activity” to move cash between the Richmond office, casinos, and various locations. How does any violent, money-grabbing, drug-dealing gangster not know about this heavy traffic of easy cash flowing in and out of a particular office in downtown Richmond?
“This was global drug crime at the highest echelons,” Cooper declares of Silver International’s operations on page 16. It is another of his hyperbolic statements made without evidence.
Thankfully, his wilfully blind fans will not question it. So eager are they to believe the threat of Chinese money-laundering through B.C.’s casinos that they will do anything, including pay $39.95 for a compilation of “true” detective stories.
But others might not be so fawning. Perhaps there is another perspective of the Silver International story that suggests why Ottawa discontinued the charges against Silver International.
What if the company had been processing far, far less cash than Eby, Cooper and the rest of the media wanted the public to believe? Was the company involved in shady business? Who knows, but did the prosecution overreach and overstate the severity of whatever was happening in trying to prove that Silver International was operating at “the highest echelons of global drug crime”?
The Hells Angels sleeping on park benches
Some of Canada’s most powerful, well-established organized crime groups are barely acknowledged in a book that purports to explain the country’s booming narcotics trade. This is an oddity. It is like discussing 9/11 with scant reference to Al Qaeda, Osama bin Laden, and George W. Bush, or a physics lecture with barely a nod to Sir Isaac Newton.
The reader has to wait till page 78 for the first grudging mention of the Hells Angels and a few homegrown gangs. Apparently like out-of-shape Canadian manufacturers, they too could not compete against their more efficient Chinese rivals.
By the late 1990s, Cooper claims, the Hells Angels “didn’t run Vancouver anymore”. Their members were tragically reduced to “sleeping on park benches”.
A decade after the Expo 1986 event in Vancouver, Chinese criminals had grown so fast and powerful that they “were taking over in western Canada” and forcing the Hells Angels out as “they had mastered drug importation and distribution.”
This is crucial to the Vancouver Model plot, but Cooper does not explain how the CCP sidelined the outlaw motorcycle gangs to take over the Canadian crime market. Why did Canada’s ruthless, well-established organized crime groups surrender their lucrative turf to a handful of newly arrived Chinese immigrants who barely spoke English? Did the CCP co-opt the bikers and other gangs into its Vancouver Model to try take down Canada? Better yet, did the CCP bully Canada’s toughest guys into complete submission?
Cooper appears to have a low opinion of the Hells Angels and other gangs like the Red Scorpions, the United Nations, and the Canadian Mafia. They are not even listed in his book’s index from pages 429 to 437.
Thankfully for the Angels and their reputation, two reporters and the U.S. Department of Justice provide a different picture to contradict Cooper’s account.
“Hells Angels still expanding after 35 years in B.C.”, the Vancouver Sun’s veteran crime reporter, Kim Bolan, wrote in July 2018.
“They are still expanding, they are still looking to shore up their power base and ensure that they maintain the highest levels of influence and intimidation within the criminal landscape, the organized crime landscape,” B.C. anti-gang police officer Lindsey Houghton told Bolan.
In 2016, Patrick Lejtenyi wrote a story for Vice News entitled “How the Hells Angels Conquered Canada” and “why they’ll continue to be at the top of Canada’s organized crime hierarchy.”
“The Hells Angels have a capacity to adapt to change,” former RCMP analyst Pierre de Champlain told Lejtenyi.
“It’s something they learned from the Mafia. They can adapt to situations that are not necessarily favourable, mostly by going underground and staying quiet for a while.”
According to these two journalists, the Hells Angels had grown since they began operating in Canada in 1948, and were still growing 70 years later. Neither mentioned anything about the group losing ground to the Chinese, feeling threatened by the CCP, or having their members sleep on park benches.
In its latest report on April 29, 2021, the U.S. Department of Justice affirmed the Angels’ status as one of the world’s most powerful organized crime groups.
“The Hells Angels pose a criminal threat on six continents” and has members in 26 countries including Canada, it said. The group is clearly far more formidable than any Chinese gang as its members in North America are experienced in a wide range of crimes including international narcotics, money-laundering, extortion, and homicide, according to the DoJ report. No wonder Wilful Blindness steered clear of analyzing the Hells Angels and other Canadian gangs.
Cooper has fired up his career by warning Canadians that there is a large silent army of Chinese infiltrators living among them, and that they are awaiting Beijing’s orders to rise up against their adopted country. The commercial success of Wilful Blindness shows he could be making headway in his fearmongering.
For all its hyping of the Vancouver Model of the Chinese Threat, the book can only name just over 90 Chinese individuals who are criminals or alleged ones operating in Canada, stretched over the last 35 years.
This is a microscopic number for a 38-million population and a C$2.2-trillion economy. It gives a perspective of the size of Canada’s Chinese organized crime problem. With Xi Jinping’s China in a new Cold War with the West, it makes sense for the Vancouver Model narrative to incorporate the CCP so that the Chinese threat looks pervasive and overwhelming.
“There is very little light between Chinese organized crime and the CCP,” Cooper cites another anonymous source on page 69.
The warning about collusion between Chinese officials and the triads is not entirely without basis. Secret societies have been known to take sides in China’s countless power struggles through the centuries.
Scholar Martin Pubrick has referred to “the perceived patriotism of triads” for their part in the overthrow of the Qing dynasty in 1911. In more recent times, Deng Xiaoping, China’s great reformist leader, has remarked that “not all triads are bad, many are patriots”.
The issue is not whether Chinese government officials collude with shady characters. This is like asking if the CIA works with corrupt politicians, crooked businessmen, and organized crime.
Rather, the focus should be on the “quality” of their collusion: how extensive, effective, and durable? This is central to the Vancouver Model thesis.
Many of the criminals and alleged ones named in Wilful Blindness immigrated from China to Canada when bilateral relations were in their honeymoon phase. Faced with little growth prospects inside a tightly controlled China, they came to Canada to take advantage of the open environment to grow their operations. Most are opportunists, and their goal was and remains profit-seeking. Some collaborated with Chinese government officials along the way, but were they really part of a grand strategy by the CCP to infiltrate and take down the West?
The few heavyweights named in Wilful Blindness—Lai Changxing, Ng Lap Seng, Kwok Chung Tam, and Tse Chi Lop—have all been exposed and neutralized. Paul King Jin, the most prominent among the current batch, and his associates are so closely watched that their potential to grow is limited.
Even Lai Changxing’s sensational story does not fully fit into Cooper’s narrative. After building a business empire in Fujian province in the 1990s, he fled to Canada in 1999 to evade arrest by Chinese police for having operated a huge smuggling ring and for bribing public officials. If he was part of the CCP’s Vancouver Model plan during his stay in Canada, why was Beijing so eager to take him down? It took 12 years of negotiations before Canada allowed his extradition back to China where he is now serving a life sentence.
Cooper wants his readers to believe that the CCP runs a massive well-oiled Vancouver Model machinery of Chinese nationalists comprising officials, tycoons, and criminals. Yet, these are people not known for being the most trustworthy, especially toward each other, so it raises questions about the viability of the strategy.
How far do Chinese officials entrust the underworld to do their dirty work? What are the risks of these criminals making side deals with other parties or, worse, acting as double agents for western intelligence? For the triads, will their patrons and handlers sell them out when the political wind shifts in Beijing, as it often does. Any gangster knows better than to give blind loyalty to politicians, and vice versa. At what point do the tycoons cut their losses as they tire of the constant threats posed by collaborations with criminals and corrupt government officials? Overall, how often do these collaborators turn on each other?
No one knows for sure, but these are crucial questions that Wilful Blindness does not address. It assumes that just because everyone is Chinese, they must all be patriots who think and act as one. China’s long history is replete with palace intrigues, factional infighting, and bloody civil wars, suggesting that the country’s shadowy collusions are very likely to be opportunistic, unpredictable, and short-lived rather than systemic and organized.
It starts at the top where the politics among China’s elite is treacherous and merciless. Mao Zedong, founder of communist China, had no qualms destroying his closest comrades when he felt threatened, which was often. Xi Jinping, the CCP’s current boss, is just as ruthless and insecure. Since taking power in 2012, he has eliminated powerful rivals and purged more than one million officials on accusations that they were involved in criminal activities and subversion. Tycoons have been executed, their assets seized, and top military generals have been arrested and hounded to death on suspicion of corruption and colluding with criminals.
Amid such distrust and rivalry, it is downright dangerous for any Chinese official, however powerful, to keep close ties with shady tycoons and triad leaders for too long. How sustainable and effective is the Vancouver Model if its participants are constantly threatened by each other?
The Vancouver Model of casino money-laundering
From pages 265 to 267, Cooper tells how easy it is to launder money through a casino using an underground banker who has accounts in both Richmond and China. He cites the theoretical example of a Chinese VIP gambler visiting Canada who collects $100,000 in cash from an underground banker in Vancouver to play at the River Rock casino. At the same time, he deposits $105,000 in the banker’s account in China. The $5,000 difference represents the banker’s 5 percent commission.
This method of transferring money across borders is well-documented, and has been in use ever since banking became globalized. Using this method, Cooper claims the Chinese have been laundering “mind-blowing” amounts of money into Canada.
After receiving the $100,000 from the underground banker, the gambler goes into a casino to buy an equivalent amount of gambling chips. He limits his gambling as he plans to convert most of the chips back to regular money.
“The VIPs could cash their…casino chips for casino cheques…and deposit the funds in Canadian banks to buy Vancouver real estate,” Cooper writes on page 267.
There are problems with this story.
Why go through a casino at all? If the VIP’s goal is to transfer money out of China to Canada, he should just take the cash from the underground banker, skip the casino, and buy real estate. When he goes into the casino with a large amount of cash, his identity is captured, and he risks being called up for questioning.
The real problem and a major hurdle for money launderers is that most establishments including casinos are mandated by law to report as well as reject large cash transactions. There have been occasional breaches, but these were eventually exposed. The CBC reported suspicious cash-and-chip transactions worth millions of dollars in casinos over several months in 2010. CTV reported in July 2015 River Rock Casino had accepted cash totalling $13.5 million in $20 bills from “unknown persons or persons” under suspicious circumstances.
The rules and enforcement governing large cash transactions have grown tighter over the years. Canadian celebrity rapper Drake found this out when he attempted to use $10,000 in cash to pay for chips at the Parq Casino in Vancouver in November 2018. Casinos will also not write a large-sum cheque out to a VIP gambler unless it is for a confirmed winning.
Cooper’s idea that a money launderer can collect a cheque from a casino for unused chips for use to buy real estate is far too simplistic. That fact that past cases have come to light shows that these were anomalies, and they were quickly shut down.
But it wasn’t just the facts that ultimately undermined his storyline that the casinos are the epicentre of B.C.’s money laundering. In the next section, Sam Cooper will turn out to be his own enemy.
Wilful Inconsistency: the “Secret Police Study”
After years of selling whopper casino stories, Cooper suddenly drops a bombshell by contradicting his prized narrative.
“B.C. Lottery casinos are an important conduit in the underground transactions. But the money laundered through gambling is miniscule compared to the sums flowing through real estate,” he writes in a Global News story in November 2018 jointly authored with two colleagues.
With no warning, he puts the casinos on shaky grounds with that adjective, “miniscule”. They were no longer his glamour villain.
Apparently, his head was turned by a “secret police study” that claimed Chinese organized crime was responsible for more than $1 billion of high-end Vancouver real estate transactions in 2016.
On page 302, he hails the study for its “blistering indictment of B.C.’s economy.”
So, what happened to those $100,000-per-hand baccarat games that supposedly attracted “the world’s richest and most powerful people” to launder “mind-blowing” amounts of money through Metro Vancouver’s casinos?
If the casino’s dirty money flow was “miniscule” all along, why did the B.C. NDP government spend a huge amount of political capital and public resources on an inquiry that largely focused on events at the River Rock Casino before 2015?
Recall Wilful Blindess’s dramatic opening pitch on page 1: "…it was insane how these gamblers were allowed to lug bags of cash into the casinos every day. All you had to do was watch the casino surveillance footage. Mind-blowing.”
More than 300 pages later, the reader is told the casinos were really a bit player.
Cooper launches into an immediate hard sell of the “secret police study”. On page 301, he praises its methodology as “elegant and robust”.
A closer read reveals the mysterious study is far from elegant and robust.
Like Wilful Blindness’s many anonymous sources, it remains a phantom, and its author(s) are also unknown. David Eby, B.C.’s attorney general and the mastermind behind the province’s money-laundering inquiry, said he only learned about its existence from the Global News story. It is not known if he has seen it yet. Apparently, the rest of the Canadian media have not seen it either.
According to Cooper, the author(s) focused on 1,200 luxury homes or about three percent of Metro Vancouver’s total home sales of nearly 40,000 in 2016.
On page 302, he writes that over 10 percent of those 1,200 properties were sold to people with criminal records, with 95 percent of them “believed by police intelligence” to be linked to mainland China crime networks. In absolute numbers, it means 120 of those homes were bought by criminals, of whom 114 may have links to Chinese gangs.
These reported findings must be taken with caution since the study itself is not available to be scrutinized. The allegation that many of the Chinese homeowners may have gang connections should be treated with the same skepticism as many of Cooper’s casino stories.
Even if reported accurately by Global News, the data must also be seen in the context that it was for a single year, and only covered homes costing between $3 million and $35 million. For a more accurate finding that Chinese gangs have been laundering money through Vancouver’s properties, the study would have to cover several years, and a broader segment of the market covering properties worth less than $3 million.
How much of “believed by police intelligence” can be trusted? What if 2016 was actually an anomaly and the high point of alleged Chinese criminal ownership of luxury homes throughout the 2010s? The investigators must also look into the ownership of real estate by Canada’s own homegrown criminals. Has the RCMP studied how much B.C. real estate is owned by outlaw motorcycle gangs? Canadian criminals have the advantage of incumbency, and knowledge of local laws and conditions.
On page 302, Cooper attempts to defend the study’s narrow focus: “The RCMP could only afford to study the high-end.”
If a limited study is all the RCMP can afford, does that justify declaring its finding “a conclusive result” that “significant money-laundering was pouring into Vancouver homes” from Chinese gangs? (page 301)
Perhaps this is why the RCMP has kept the “study” a secret, available only to a friendly journalist “in a secure and confidential transfer of information” (page 302). Might that “study” be just a few spreadsheets of data that will not stand up to detailed questioning?
But that has not stopped Cooper from issuing his favourite conclusion.
“It was a mind-blowing finding,” he declares on page 302. It is the same adjective he used on the casinos on page 1.
The facts and storylines may have changed but his use of “mind-blowing” is as consistent as can be.
Canada’s China challenge
Wilful Blindness is filling a vacuum at a time when Canadians are struggling to make sense of China’s challenge to the U.S.-led global order. That order, in place since the end of the Second World War, is crumbling, but what will replace it is far from certain.
The uncertainty has spawned a huge and growing market for ideas that speak to the China challenge. Politicians everywhere are grappling for answers to reckon with a new China under Xi Jinping that is clearly not a benign force.
Some of the ideas will be thoughtful and nuanced. Most will attempt to explore solutions for a peaceful outcome.
But watch for those with little to offer other than a wilful blindness to sow disinformation and stoke fear. It is imperative to call them out early or these early dark days of the post-2020 order will grow darker.More