Canada: Mexican set up B.C. front company to launder money, CBSA says - PressFrom - Canada

CanadaMexican set up B.C. front company to launder money, CBSA says

08:05  18 september  2019
08:05  18 september  2019 Source:

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While the companies set up are legal in nature and can operate like ordinary businesses, they can overstate their income, which comes from over-invoicing to allow inflow of ‘dirty’ Shell companies that are set up without any significant assets or operations can also be used for money laundering .

Money laundering is the process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process " launders " it to make it look clean.

Mexican set up B.C. front company to launder money, CBSA says© CBSA/QMI Agency Canada Border Services Agency officers interviewed Sergio Antonio Reyes Garcia at the Vancouver airport in March.

A B.C. company set up by Mexican businessmen was used to launder millions of dollars of criminal proceeds, the Canada Border Services Agency alleges in Federal Court documents.

The CBSA interviewed one of the men it claims is involved, Sergio Antonio Reyes Garcia, on March 3, 2019 when he arrived at Vancouver International Airport with his family and undeclared cash.

In the interview, a CBSA agent alleged Reyes Garcia and his business partner Manuel Barreiro had been misusing foreign companies, including one set up in B.C. called Kross Investments Ltd.

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In a recent money - laundering case against 32 members of a Mexican cartel, special agent with For example, the trafficker could use its accounts to purchase over-valued items from a company the Trade- based money laundering . When avoiding banks, drug traffickers first deliver drug proceeds

The Mexican cartels have grown so large not solely because of their high revenue or their violent actions, but because of their infiltration of hundreds, if not thousands, of institutions. They were able to continue laundering money even after Tremor Enterprises, the nucleus of the operation, was raided.

“What connects you to Manuel is a money laundering scandal in Mexico,” CBSA agent Rahim Bajwa said to Reyes Garcia, citing conversations found on the Mexican man’s cellphone.

“There is discussion about money leaving Mexico and entering Canada — discussion about you and Manuel attempting secret meetings in Canada and opening up false companies in Canada.”

Reyes Garcia is claiming all the allegations against him and his business partner stem from a “political problem” in Mexico. He said the former Mexican president’s party targeted Barreiro for investigation because he had business with a rival presidential candidate named Ricardo Anaya.

And Reyes Garcia said in an affidavit filed as part of his Federal Court challenge that the CBSA unfairly cancelled his Electronic Travel Authorization to visit Canada, falsely claiming he had lied when he said he had never been charged with an offence in Mexico.

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Anything that launders money is going to make it look like legitimate income; so generally speaking you are going to have to pay taxes on it if you do this Another reason to launder it is to have a front , so no particular scrutiny falls on the criminal, but the professional gambling angle would cover that.

Reyes Garcia said that while allegations were made against him in the Mexican media, he was never formally charged and has since been cleared of any wrongdoing. He returned to Mexico after his interview at the airport and is now seeking to be allowed to re-enter Canada, and wants his travel document to visit Canada restored. The case goes before a Federal Court judge in Vancouver on Wednesday.

“This starts with politics,” Reyes Garcia told the CBSA agent in March. “As a political strategy, they say that Manuel was a money launderer for Anaya.”

CBSA agent Bajwa noted that on Reyes Garcia’s cellphone were details of financial transactions involving cash sent from Mexico through the B.C. company to a Swiss bank.

He cited one transaction for 600,000 Euros documented in an email on Reyes Garcia’s phone and said there were others of up to 2 million Euros between the B.C. company and the pair’s Mexican business.

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The place to launder money . HSBC’s money - laundering lapses in Mexico and elsewhere were cited in an extensive Senate report earlier this year, but the documents filed in court on Tuesday provided new details. Despite the known risks of doing business in Mexico , the bank put the country

Prosecutors found the bank had facilitated money laundering by Mexican drug cartels and had moved tainted money for Saudi Arabian banks tied to terrorist In July, HSBC was thrust into the spotlight after the Senate Permanent Subcommittee on Investigations said that between 2001 and 2010, the

“In the most basic form, what is happening right now is called money laundering. These activities and these sorts of transactions are confined to money laundering — money leaving Mexico, going through Canada and various other parts of the world,” Bajwa said. “Once the money has left Mexico, it is difficult to trace. Money launderers are aware of this and try their best to hide the trade because they don’t want anything to come back to them. This is done because the money is earned through illegitimate means, including drug trafficking, embezzlement, misappropriation of funds etc.”

Reyes Garcia said repeatedly in the interview that he didn’t have anything to do with the transfer of funds through the B.C. company, although he may have been provided details of some of the transactions by Barreiro’s lawyer.

The CBSA alleges there is evidence of his involvement based “on emails and the indictments in Mexico by the attorney-general.”

Reyes Garcia admitted he and Barreiro had been partners in a Mexican development company called Aspen, which was also mentioned in the emails on his phone.

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A front company for a Mexican cartel might sell m-worth of oranges to an American importer while creating paperwork for m-worth, giving it cover to According to American customs investigators, Mexican drug gangs copied trade- based money - laundering techniques from Colombian ones.

Transaction laundering works based on the same principle. By processing illegal transactions through a Cartels turned their attention to B 2 B payments and started using company credit cards to move illicit In the case of Mexican drug cartels, transaction laundering often occurs when a US based

Bajwa noted that the Mexican company and the B.C. company are “on the same emails.”

“Your partner was moving money to various accounts, including overseas to Switzerland. We can’t criminally prosecute you here in Canada. We aren’t the Mexican authorities, if that is something you are worried about. Initially, you didn’t mention anything about Kross Investments. Aspen is all there. It’s not by accident that you are involved in these emails. All of this is here,” he said.

Reyes Garcia said he came to Vancouver in early 2018 and rented a condo on West Georgia with Barreiro, hoping the controversy in Mexico over their business dealings would blow over. He said Kross Investments “was started before” and without his involvement.

“I shared an apartment, but that’s why I am here because of the persecution of the Mexico political problem,” Reyes Garcia said.

But Bajwa said Reyes Garcia was “well aware of what Manuel is doing in Canada.”

“I am not buying it when you are playing ignorant. It is a business which is registered on paper, but doesn’t exist. When someone opens a business, it should be visible. There should be bricks, walls. You guys were accused of funnelling money through shell companies,” Bajwa said.

Kross Investments “appears to be a shell company and it doesn’t exist. It is in the registry of British Columbia. As all this is going on, you are being investigated for this in Mexico — for money laundering. And you are sharing the same residence as Manuel in Vancouver. Yet you don’t seem to have an idea about this company?”

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Money laundering basics include making illegally-earned money look like it came from a legal The basic money laundering process has three steps: Placement: At this stage, the launderer bought during the layering stage or the purchase of a million screwdriver from a company owned by the

Money laundering has been a go to for countless criminals since taxes were first levied. Whether it was hiding high valued items in sacks of grain, or as in more recent cases, routing illegal transactions through hastily formed shell corporations. In this day and age, banks and financial institutions must

Postmedia has previously investigated the ease with which some linked to criminal organizations have set up shell companies through the government’s B.C. Corporate Registry.

Vincent Ramos, the Richmond man convicted in the U.S. of racketeering for selling encrypted devices to organized crime around the world, set up seven companies in B.C. through which he laundered some of the $80 million he made through his criminal enterprises.

Just this week, it was revealed that the FBI investigation into Ramos led to the criminal charges against senior RCMP intelligence officer Cameron Ortis, after an internal Mountie document was found in Ramos’ possession.

Others connected to the Wolf Pack and the United Nations gang have also set up companies through the government registry.

Corporate documents obtained by Postmedia show that Kross Investments Ltd. was registered in Victoria on Jan. 10, 2017 by a clerk at a Toronto law firm. The only director was listed as Juan Pablo Olea Villanueva, of Queretaro, Mexico.

In 2018, Reyes Garcia’s business partner Barreiro was added as a director of Kross Investments, listing a Miami address as his residence.

Kross’ Vancouver office is listed on official documents as 400-601 West Broadway, which is actually a company that leases office space called “Office Suites on Broadway.”

A company representative said Tuesday that Kross has never rented space at that address.

“I have nothing in our records,” the woman said.

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