How China's 'crooked consultants' help the rich enter Canada

MARK MACKINNON

BEIJING — The Globe and Mail

Thursday, Jun. 09, 2011

He is in his 50s and has spent his entire career in the quality-control department of a company owned by the Chinese government. His salary isn't much, but he has made millions on the side - he won't say precisely how - and now wants to emigrate to Canada.

There is a special program designed to fast-track immigrants with money to inject into the Canadian economy, but he doesn't really qualify.

He has the required minimum of $1.6-million in assets. What he doesn't have are the documents Canadian immigration officials want: neither banking and pay statements to show that his wealth has accumulated gradually and legitimately nor proof that he has paid taxes on it. He also doesn't have the necessary two years' experience in managing employees.

In China, however, manufacturing a personal history that will satisfy Immigration Canada is no problem for almost anyone willing to pay.

To overcome his obstacles, the well-off quality-control officer approached 22 China-based immigration consultants for advice. He soon found that his destination is so popular for wealthy people like him that a black market has arisen to generate the forged documents and massaged back stories that so many seem to need.

And the image doctors appear to be good at what they do: Several claim to have a 100-per-cent success rate. "If you make a fake," observed a consultant in the southern city of Guangzhou, "you should fake it real."

That admission was surprisingly frank, considering that it was made over the telephone to a caller whose own identity was no more genuine than the one he wanted to have fabricated. In reality, the quality-control officer was a character invented by The Globe and Mail to see just how far people will go to help someone leave China.

Disreputable consultants have long been the subject of controversy in Canada. Just before the May 2 federal election was called, Bill C-35 was read into law, making it illegal for anyone who is unregistered to charge a fee for immigration advice.

But a bigger threat may lurk abroad. More than 80 per cent of the companies The Globe's counterfeit client asked for help offered to sugarcoat the past, even if it includes a criminal conviction and time in jail.

Immigration Minister Jason Kenney confirms that "crooked consultants" in such places as India, Pakistan and especially China are a problem. "A lot of people," he said in an interview, "are willing to pay a lot of money to cut corners."

Canada-China relations thorny

For years, China has been the No. 1 source of newcomers to Canada, and applying as an investor is the fastest route to permanent resident status. Permission to come is often granted within a year.

In 2009, about 2,000 investor immigrants and their families were accepted from China, most of them private citizens drawn by the promise of a better environment, education system and health care.

A report in Friday's Global Times newspaper found that among those Chinese with at least 100 million yuan (about $15-million) in assets, 27 per cent had already begun the process of emigrating, and another 47 per cent were also considering leaving the country.

Consultants in China say that those being fast-tracked also include public employees, who, like the quality-control officer, are surprisingly well off.

Ying Hong, a Guangzhou firm that bragged of its 100-per-cent success rate, made no secret of helping wealthy bureaucrats. "Many officials take foreign passports," the agent said, laughing. "But I can't tell you who."

China's relationship with Canada is often thorny, and one of its more charged issues is the claim that Ottawa provides refuge to at least 70 fugitives, including former government officers accused of corruption. Beijing says Canada turns a blind eye to immigrants' shortcomings if they have money - and then refuses to extradite those who stand accused of serious crimes.

At the top of the most-wanted list is Lai Changxing, who is suspected of masterminding China's biggest-ever smuggling ring and has been in Canada fighting extradition since 1999. Although he entered on a visitor's visa and is trying to stay as a refugee, his case has demonstrated how reluctant Canadian courts are to deport people to China, where serious economic crime often results in the death penalty.

Canada, meanwhile, blames Beijing for not cracking down on those who profit by helping dodgy migrants cheat its system.

An estimated 400 firms based in China offer their services to prospective immigrants. Of the 22 approached by The Globe's fictitious client, no fewer than 18 advised fabricating documents to produce the required background.

Although many suggested he ask someone who owns a company to create the income and tax documentation, eight said they could produce the papers themselves. Two even offered to have a Canadian company speed the process by hiring the applicant, if only on paper.

The fees for all this ranged from 50,000 to 60,000 yuan ($7,500 to $9,000). "We are not charging you 50,000 for doing nothing," said a representative of Ying Hong, adding that "we have succeeded with clients who have several hundreds of millions in assets, a lot of money, that they can't report."

As a further test, The Globe's client claimed to have a relative who also wanted to emigrate but had an even bigger problem: Several years ago, he served time for stabbing someone in a fight.

Several firms called the jail sentence a deal breaker for immigration to Canada, but 12 of them suggested that a certificate attesting to a clean criminal record can be obtained if a person possesses the right guanxi,which means "relationships" or "connections."

If the relative were to persuade - bribe, if necessary - someone at his local police station to issue such a certificate, explained an agent at Kunpeng International, a Beijing-based firm, Canadian officials "can't come to China to check the archives" in person.

Attracting the wealthy

Last year, Immigration Canada doubled both the minimum assets investors need to qualify (from $800,000) and how much each must invest (from $400,000) in a bid to ensure, Mr. Kenney said, that Canada gets "adequate value" for fast-tracking an application. The money is effectively an interest-free loan to the province in which the investor settles, and is later repaid in full.

However, China-based consultants reported no drop-off in either the number of applicants they were seeing or the pace with which the cases were handled by Canadian officials. Quebec has its own immigration program, and was compelled to raise its standards when the federal government did.

Mr. Kenney said the government is reviewing the effectiveness of the new threshold - which still makes coming to Canada cheaper for an investor than going to Australia, the United States or Britain, all of which require an investment of at least $1-million, which isn't repaid.

But he defended the need to have a fast-track program: "Obviously, we do want to attract high-net-worth individuals. Our hope is they'll stay in Canada and be a positive force in the economy." According to a report in a state-run Chinese newspaper, the 2,000 investors who emigrated in 2009 transferred almost $1-billion to Canadian banks.

The minister acknowledged that embassy officials struggle with the sheer volume of applications from China - which accounted for more than 32,000 of the 45,000 the program received in total last year.

He also described as "a challenge" attempts to have Chinese police co-operate in pursuing consultants suspected of fraud, but contended that relations improved after he raised the issue in Beijing last year with Public Security Minister Meng Jianzhu.

John Ryan, chief executive officer of the Canadian Society of Immigration Consultants, agrees that, along with guanxi, the inability of officials to verify documents is at the root of the problem.

But he spent nine years as a consultant in China and observes that the bureaucratic landscape there is very different: "In Chinese culture, they feel that, in dealing with governments, they need an edge. They don't really understand that, in our Canadian system, they can deal openly and honestly with the government and be dealt with fairly."

According to Mr. Ryan, staff at the embassy in Beijing - which declined to comment for this article - are "doing yeoman's work, but the time that they spend on any file is limited. They have limited time to look behind the file, unless there's something glaring, and those [Chinese immigration consultants]are sophisticated enough to know where the holes are."

No choice but to cheat

In their own defence, some consultants say they have no choice but to break the rules. Canada, they claim, asks for documents that even legitimately wealthy Chinese are unlikely to possess.

One official, whose company did not suggest doing anything illicit, complained that immigration officials demand a perfect background, something that is rare among those who have become wealthy during China's wild transition from socialism to a market-oriented economy.

Many of the nouveau riche, the consultant said, earned their money legally through stock trading or because real-estate values have soared in Beijing and Shanghai. So they have the requisite assets but not all the paperwork.

Charles Qi, president of Beijing East J&P Star Consulting Co. and a member of the Canada-China Business Council, said that, if an applicant is determined to leave and knows his acceptance depends on documents he doesn't have, "he will fake them. What other choice do they have?"

Mr. Kenney rejects the notion that Canada has set the bar too high, saying it is still more difficult to gain residency in the United States and Britain, and that there is no good reason to falsify an application.

But a veteran consultant who divides his time between China and Canada argues that honesty has become a handicap. He said the investor system is now so rife with fraudulent applications that anyone who fails to add some "polish" almost certainly winds up at the back of the line.

"I kept silent for many years and tried to … play by the laws, but I'm almost ready to close my company," he said, speaking on condition of anonymity. (He fears being harmed for revealing what his competitors do.) Because he won't cheat, "I can't compete. People who come to me are unlucky people. They are the ones in danger of refusal."

Investor immigration

Citizenship and Immigration Canada has set up special "business immigration centres" in nine cities around the world, making investor applications an especially rapid route to permanent residency. Those hoping to use it must:

- Have $1.6-million in assets, which they can show was obtained legally via bank statements and pay stubs. Proof that taxes have been paid is also necessary.

- Prove they have at least two years' experience in managing either a business of their own or no fewer than five full-time co-workers.

- Sign a declaration of intent to invest at least $800,000 in Canada. The money is managed by CIC and used, according to its website, "to create jobs and help [provincial]economies grow." It also is returned, without interest, after five years and two months.

- Pass a test to determine whether they can become "economically established" in Canada.

By the numbers

- China is the No. 1 source country for immigration to Canada, with more than 343,000 Chinese gaining permanent resident status between 2000 and 2009.

- Canada accepted 2,872 investor applications in 2009, allowing 7,435 people (including spouses and dependents) to gain permanent residency.

- According to the state-run China Daily newspaper, about 2,000 of the applicants were from China and they transferred nearly $1-billion into Canadian banks.

- Of the estimated 400 immigration consultants based in mainland China, just seven are registered members of the Canadian Society of Immigration Consultants.