'Whale' gamblers also placed bets on B.C. real estate

SAM COOPER, VANCOUVER SUN  10.03.2017

Corrupt Christy

Paul King Jin, the alleged suspect at the centre of a major RCMP probe into money laundering and underground banking, is connected through big B.C. real estate loans to “high-risk” VIP gamblers from China, a Postmedia investigation shows.

The RCMP’s investigation, dubbed E-Pirate, alleges that Jin and his associates used an illegal cash exchange business in Richmond to lend suspected drug dealer cash to high-roller gamblers who, with troubling ease, used massive wads of small bills to buy chips in B.C. casinos. These ultra-wealthy Chinese ‘whale’ gamblers, who were recruited in Macau casinos, could pay back these loans in China, thus ending up with cash in Canada while avoiding China’s tight capital-export controls.

While the RCMP and B.C. government have focused on alleged money laundering using B.C. casinos and underground banks in Mainland China and Richmond, investigators have not apparently traced whether these Chinese VIPs sometimes cashed in their chips for B.C. casino cheques in order to fund real estate investments and luxury homes in B.C.

It would be odd if they didn’t, according to experts on the Macau gambling model.

In Macau style junkets — which are designed specifically to get big money out of China — gambling is often a secondary consideration.

“Once they’re done gambling, they can take their winnings in U.S. funds or Hong Kong dollars and invest it in property or offshore tax havens,” explains a Business Insider report, citing a legal study on Macau casino junkets. “In many cases, there will be no actual transfer of funds, but rather a simple balancing of accounts between credits in mainland China and debits in Macau.”

BCLC documents, obtained by Postmedia through freedom of information requests, allege that 36 VIP gamblers, mostly from China, were linked to massive cash drops from Jin’s network.

Postmedia’s cross-referencing of B.C. civil court filings, land title documents and BCLC documents suggests that B.C. real estate was indeed a big bet for a number of these “high-risk” VIPs.

In 2014, one high-roller was able to take $645,000 in small bills dropped off to him, and buy gambling chips at River Rock Casino. B.C.’s gaming enforcement branch was interested in the gambler’s “recent use of large volumes of un-sourced cash and casino value chips at River Rock Casino,” documents say. Documents say BCLC knew the man had significant assets, including a Vancouver mansion.

Land title records show the man has a $14-million house near the Point Grey Country Club.

Information from B.C. civil court cases, usually filed when a loan was not repaid, claim that Jin made big loans to some casino gamblers to fund B.C. real estate development. In other cases, filings allege, loans were made by Jin to BCLC-identified VIPs for them to make mortgage payments on Vancouver homes. Another common transaction for Jin and these Chinese gamblers, according to civil filings, was for Jin to give them massive short-term loans, secured against their Vancouver property holdings.

The most stunning alleged example of this is the civil claim filed by Jin against gambler Jia Gui Gao. Gao was identified in BCLC’s probe of Jin’s casino cash delivery network as logging 28 suspicious casino transactions, documents obtained by Postmedia show.

Gao has owned at least five properties in Greater Vancouver since 2012, and has sold at least four, for total proceeds of $48.4 million, B.C. land title records show.

Jin’s claim says that Gao and he met in 2014.

“(Gao) advised … that he was a man of great wealth and was involved in real estate development in both Canada and the People’s Republic of China,” the claim states. “The defendant knew that the plaintiff was a member of a private lending business.”

Gao was developing land in West Vancouver’s British Properties, filings say, and he needed capital for his real estate projects. Gao’s main purpose for taking multiple loans from Jin was “for real estate development … (however, Jin) is also aware that on occasions (Gao) spent the money lent to him on gambling and women,” Jin’s claim states.

Jin’s loans to Gao were to be secured through a promissory note by three of Gao’s West Vancouver properties, and two of his Vancouver properties, the claim states.

Jin, in 2015, claimed he was owed $2.3 million against Gao’s West Vancouver home. The home was valued at about $8 million at that time.

But a foreclosure petition filed by another mortgage lender Gao used to buy the home, Accountable Mortgage Investment Corp., said that as of June 2017, the property had over $28.8 million in mortgage loans secured against it from eight different lenders. Jin, who was eighth lender in line, claimed he was now owed $8 million on the property, according to the petition.

Foreclosure filings from Accountable, says Gao’s lawyer David Chen, advised them: “The private lenders were well-aware of Mr. Gao’s gambling problem and took advantage of his addiction. … Moreover, the owner has already sold at least three real estate properties, amounting to more than $35 million CAD, to satisfy the alleged debts owed to these private lenders. … It is questionable whether the interest charged on these loans are legal and may at worst be criminal.”

In an affidavit, Guiyun Ogden, the CEO of Accountable Mortgage Investment Corp., said that she located Gao in a Macau casino hotel by talking to a number of the private lenders on Gao’s West Vancouver property.

Ogden’s affidavit says she was told, “Gao gambles excessively and the mortgages (from the private lenders) secure gambling debts … and Gao moved from the (West Vancouver property) to Macau and was staying at the Venetian Hotel.”

Ogden’s affidavit says she was informed the private lenders were hoping “they could recover some money from ‘Gao’ directly.”

“I am concerned that the petitioner’s security is in jeopardy and want to see the property sold through the judicial process,” Ogden’s February 2017 affidavit says.

Zachary Ng, Jin’s lawyer in the case, told Postmedia this week he would “convey” requests for comment on allegations and cases involving Jin. Neither Jin nor Ng has responded for comment.

According to B.C. government documents, in 2015, Guo Tai Shi was among the first of the Chinese VIPs identified by internal casino investigators. Shi was on a list of about 10 gamblers that BCLC investigators planned to interview. BCLC documents obtained by Postmedia say investigators believed these gamblers were “known to have confirmed cash drop offs involving Jin, or a known associate of Jin, primarily at River Rock Casino.”

Postmedia’s review of B.C. land titles shows that Shi owns at least eight properties in Greater Vancouver, for a total current value of $28.8 million. The luxurious properties include Fox Island on the Sunshine Coast, and the $7.5 million Abode Island, a private island just off the coast of West Vancouver. Shi owns two downtown penthouses worth $10 million in total, as well as two Richmond farmland properties. One of the properties reportedly includes a 22,000-square-foot mansion where Shi will offer luxury hotel rental suites to visitors from China through his B.C. hotel and travel companies.

Another Paul Jin claim against two of the gamblers named in BCLC’s cash-drop off list, Pi Long Sun and Ying Wang, says the couple are real estate developers from China who live in Richmond, according to Jin’s claim.

According to Jin’s claim, Jin lent the defendants $600,000 on Aug. 1, 2015, which was secured by their Richmond property, and was to be repaid on Sept. 1, 2015.

Another Paul Jin lawsuit that alleges unpaid debts says that in 2013 a borrower who owns a Point Grey home, now valued at about $7 million, borrowed $892,000 to “purchase a property … (and that, Jin) transferred $500,000 into the bank account of the defendant. The balance of the loan was paid to the defendant by the plaintiff in cash.” The loan was recorded with a promissory note that was secured by the defendant’s “primary residential property,” on Sasamat Place, Jin’s claim states.

Another case shows that Jin tried to locate a Chinese man who, Jin alleged, had borrowed $750,000 from him for a one-month term, with the mortgage secured by the man’s Arbutus Ridge property in Vancouver. Jin’s filing says the home was left vacant, and the man refused to repay the loan, and the man said he was in China, but would not say where. Jin visited the man’s adult son at a Surrey residence, the claim says, and was told the alleged debtor would be away “for a long time.”

“Mr. Jin tried all friends and associates who might know (the man) both here, and in China,” the filing says. “Mr. Jin does not know where to start looking in China.”