Saturday, November 10, 2007


So ... cough, gak ... there's a provincial government crackdown on organized crime?


There's a front-page CanWest article in Vancouver Sun today with -- across the top -- a banner ad for Lotto 649 gambling, and the provincial government's motto: "Know your limit, play within it." [NB. Casinos are a prime outlet for money-laundering.]

Underneath that motto, Vancouver Sun is reporting a provincial government crackdown on organized crime. They assume that everyone knows what "Organized Crime" is. But we don't. More and more, I think it's represented by jolly little men like Karlheinz Schreiber. Even by tall handsome men like Erik Bornmann. Or Ken Lay. Or Robert Sommers. But hey, what do I know.

Go to the full Sun story. See how this dramatic crackdown event is "a clear message" for which citizens have hungered, not knowing which "lifestyle" to choose ... but it seems B.C.'s solicitor general himself is comfortable using words like "bling bling" as he addresses this problem.

Seems the government was granted an order in civil court Thursday ... " A civil trial will follow ..." Civil??

Revealed deep within this story: " The RCMP also raided the clubhouse ... on Dec. 11, 2003, backed by a search warrant. Search warrant documents obtained by The Vancouver Sun following that raid alleged the Nanaimo chapter of the Hells Angels was a criminal organization under investigation for cocaine trafficking, extortion, assault causing bodily harm, conspiring to keep a common bawdy house and procuring."

December 11, 2003. Only 17 days before the police raided the B.C. Legislature. Coincidence?

Questions, questions. Answers, anybody? - BC Mary



The move is part of a provincial government crackdown on organized crime.

Neal Hall and Jonathan Fowlie
Vancouver Sun - Friday, November 09, 2007

NANAIMO - A heavily armed police emergency response team seized the Nanaimo Hells Angels clubhouse today as part of a provincial government crackdown on organized crime.

Solicitor-General John Les said the seizure should send a clear message to people involved in criminal activity.

"We think people will notice that maybe it's not a good idea to take the risks involved in an unlawful lifestyle, only to have the bling-bling taken away," Les said.

More than a dozen police officers, some armed with submachine guns, stood guard today while other officers went through the two-storey building with a video camera.

Still others were loading three Harley-Davidson motorcycles onto trucks. In the building's backyard behind a barbed-wire fence, police set up a command post in a trailer.

Six police SUVs crowded the parking lot in front. Workers later set up blue metal barricades around the perimeter while a locksmith changed the locks.

"It's another important tool for us to fight crime and it can be very helpful, obviously, in removing the profit motive from unlawful activity," Les said an in interview. "Quite often when you see people living in very expensive homes and driving very expensive cars with no obvious means of support or income, it can be very attractive to others who might be attracted to an unlawful lifestyle."

Les said it was the first Hells Angels property seized under the B.C. Civil Forfeiture Act, passed last year to give the government the power to seize cash, property and assets of those who derive income from illegal activity, including drug trafficking.

"We're going to come and seize the property, and the owner of the property then has to explain to the court, on a reverse-onus basis, that the assets were legally obtained," Les said.

Vancouver Hells Angels member Rick Ciarniello, who speaks for Hells Angels in B.C., called seizure "ridiculous" because the legislation requires the owners to prove the property wasn't obtained by money earned from illegal activity.

"I'm not happy about it," Ciarniello said. "They've been coming after us for a long time."

The government was granted an order in civil court Thursday "freezing" the Hells Angels clubhouse and its contents.

A civil trial will follow to determine whether the 96-year-old building was bought with money derived from criminal activity or has been used for criminal activity.

The Hells Angels bought the building, at 805 Victoria Road, in 1980 for $50,000. Records show it is currently assessed as being worth $100,400. The RCMP also raided the clubhouse - a fortified wooden structure protected by video surveillance cameras - on Dec. 11, 2003, backed by a search warrant.

Search warrant documents obtained by The Vancouver Sun following that raid alleged the Nanaimo chapter of the Hells Angels was a criminal organization under investigation for cocaine trafficking, extortion, assault causing bodily harm, conspiring to keep a common bawdy house and procuring.

RCMP Insp. Gary Shinkaruk, head of the Outlaw Motorcycle Gang squad in Vancouver, said Friday the seizure was "another avenue of investigation into the Hells Angels."

He said the Hells Angels clubhouse of Vancouver's East End chapter was previously frozen under the Criminal Code, before the province enacted its Civil Forfeiture Act in May, 2006.

Asked if other assets of the Hells Angels could be seized, Shinkaruk said: "We'll continue to investigate groups involved in criminal activity." Ciarniello said the owner of the Hells Angels clubhouse in Nanaimo - listed as Angel Acres Recreation and Festival Property Ltd. - will have to spend a lot of money to prove the building wasn't bought with unlawful money, and he said that should worry other people, too.

"The fact they can do it to us, they can do it to anyone they want," Ciarniello said.

Asked if he was worried that the Vancouver Hells Angels clubhouse, located in Coquitlam, might be seized, he said he wasn't going to lose sleep over it.

He said police always claim the Hells Angels is a criminal organization, but in reality "it's the people charged who are the criminal organization - not the Hells Angels," even though the people charged might be Hells Angels members.

Part of the documentation filed in court to support the 2003 Nanaimo raid was a 32-page report by an RCMP expert, Jacques Lemieux, who said the biker club's main source of revenue was drug trafficking.

The report said many Hells Angels members were involved in importing and manufacturing drugs, as well as operating marijuana-growing operations.

The Hells Angels are also involved in "murder, theft, possession of stolen merchandise, extortion, gun-running and money-laundering," Lemieux said in the report, which noted that 82 per cent of Hells Angels members in Canada have criminal records.

"Members of the Hells Angels work in cells," it said. "A cell usually consists of a member of a chapter who is responsible not only for a certain criminal activity, but for a predetermined territory in which the criminal activity is carried out."

The report said meetings at Hells Angels clubhouses are called "church" and if questions arise about criminal activities during a meeting, they are presented on a blackboard or written on papers that are later burned.

B.C. Civil Forfeiture Act facts & figures:

There are more than 60 active cases involving about $5 million in cash and assets, including real estate and vehicles believed to represent the proceeds of crime and other unlawful activity, currently frozen by the B.C. Supreme Court pending the outcome of civil trials.

To date, more than $2 million in cash and assets obtained through illegal activities have been turned over to taxpayers during the 17 months since the act was passed.

Cases are referred to the government's civil forfeiture office by police and regulatory bodies such as the B.C. Securities Commission.

The province sues in civil court and a reverse-onus test requires the defendants to prove they did not gain the asset from unlawful activity.

Examinations for discovery are conducted and cases are decided on the civil standard of proof - the balance of probabilities - rather than the higher criminal standard, beyond a reasonable doubt. Once a judge decides property is forfeited, it can be sold and the proceeds used by the government to compensate victims of crime, to fund crime prevention programs, to remedy the effects of illegal activity and to cover the costs of administering the act.

Concluded cases include:

- Forfeiture of $500,000 in cash recovered from an unregistered investment scheme, which is being returned to B.C. investors who lost money.

- The forfeiture of $240,000 cash, the proceeds of drug trafficking, from members of a high-profile gang in the Lower Mainland.

- The forfeiture of $140,000 cash, the proceeds of drug trafficking in Vancouver.

- The forfeiture of $100,000 cash and jewelry, the proceeds of marijuana cultivation.

- The forfeiture of $13,500 that was being transported from Terrace to Vancouver for drug trafficking.

Source: Ministry of the Solicitor-General


For further study on "What is Organized Crime?"


David Baines,
Vancouver sun: Saturday, November 10, 2007

It's curious how things work out sometimes. In late 2003, Cpl. Bill Majcher was appointed inspector in charge of the new RCMP Integrated Market Enforcement Team in Vancouver.

It was viewed as an unorthodox appointment because, first of all, it was a big leap for a corporal to make. Secondly, Majcher had previously worked as an undercover officer, and was known more for his free-wheeling style and spontaneous personality than his administrative abilities.

But he knew securities. Before joining the RCMP, he had worked as a bond trader in London, and as a futures and options trader.

He was also a quick study. It wasn't long before he was in hot pursuit of some very worthwhile targets, mainly junior companies listed on the TSX Venture Exchange and the OTC Bulletin Board in the United States.

"The Bay Streeters seduce you with nice manners, fancy dinners and fancy degrees," he told Canadian Business. "In B.C., they don't waste your time with all that -- they just screw you." [Haha! Good one, Corporal. Keep reading! - BC Mary]

He and his staff submitted several briefs recommending charges to Crown, but they didn't get anywhere. Majcher began to think he could "effect more positive change" by going into politics. While still working as an RCMP inspector, he ran for the federal Conservative nomination in Richmond.

Although he failed in his bid, his superiors -- who weren't even aware he was seeking nomination -- were not amused.

They were also not amused by the fact that Majcher was associating with Kevan Garner, whom he had previously caught in a money-laundering sting operation. Garner had done hard time and now they were talking about doing a movie deal together.

RCMP internal affairs officers had other unspecified issues with Majcher. Whatever they were, Majcher was suspended with pay in July 2005. The matter dragged on and was not resolved until several months ago, when the two sides reached a settlement and Majcher officially retired.

Still, he remains a bit of a celebrity, due mainly to his Hollywood-style undercover work. In September, he was featured in a Canadian Business cover story, complaining that the criminal justice system is too soft on white collar crime and stacked in favour of criminals.

Meanwhile -- and this is the curious part -- he has agreed to serve as executive vice-president and director of a Vancouver junior company called Disaster Preparedness Systems Inc., which is purportedly developing equipment and technology targeted to homeland security, disaster response and emergency preparedness.

During the nine months ending Aug. 31 (its last reporting date), the company generated only $38,299 in revenues and racked up $535,663 in losses. Its assets totaled only $1,134 and it had a serious working capital shortfall and negative equity. It plans to quote its shares on, gulp, the OTC Bulletin Board, which is known as a gathering place for scoundrels and scandals.

In September, Majcher also joined the board of Evolving Gold Corp., a small exploration company listed on the TSX Venture Exchange and co-listed on the bulletin board and equally unruly Frankfurt Exchange.

It has a handful of unexceptional mineral properties and the usual cadre of investor relations consultants. Its stock has doubled in the last couple of months to 75 cents, but there is still little to distinguish this company from the morass of penny stocks that inhabit Vancouver.

I'm not suggesting there is anything illegal or even unethical about these companies. I just find it strange that Majcher would become part of a community where they don't waste their time with fancy dinners or fancy degrees, they just screw you.

Wait! Read this, too, which explains the view from the Solicitor General's office:

LES'S TWIN ROLES A BAD BET [bad pun, too]

Times Colonist: Saturday, November 10, 2007

It makes no sense for the same minister to be responsible both for promoting gambling and efforts to curb related abuses, crime and addictions.

Yet Solicitor General John Les is balking at renewed calls to separate the two functions, the latest coming in a damning independent audit report that highlighted inadequate fraud protection for lottery ticket buyers.

The audit, by Deloitte and Touche, uncovered new problems within the B.C. Lottery Corp. and the Gaming Policy Enforcement Branch. Its first recommendation notes "the potential for an actual or perceived conflict of interest" because both report to Les. No other Crown corporation is allowed to operate in a similar way, it notes.

The conflict is obvious. Les is responsible for the lottery corporation's plan to increase the number of gamblers in the province and the average amount each one loses per year. He is also responsible for dealing with problem gambling and enforcement of rules designed to curb crime.

The two interests are in conflict. Tough actions to reduce the risk of money laundering through casinos, for example, might mean lower profits for the lottery corporation.

Les has already demonstrated the problem. Concerns of retailer fraud were first raised a year ago, when the Vancouver Sun established that people who sell lottery tickets were winning far more than their share of prizes. The fear -- in part based on cases elsewhere -- was that retailers were cheating the rightful winners out of prizes.

Les responded like a lottery sales representative, not the person responsible for enforcement and public protection. The retailers win more because they gamble more, he said. "There are no problems here in B.C.," he reassured gamblers.

But an ombudsman's investigation, an internal review and now the audit have confirmed that Les's reassurances to the public were false. There were serious problems in B.C.

The risks of fraud, crime and addiction have all soared since the Liberals broke their 2001 campaign promise and embarked on a radical expansion of gambling, pushing ahead with everything from Internet betting to mini-casinos in small towns across the province.

Enforcement and protection have not kept pace. One good step would be to ensure that one minister isn't responsible for promoting and policing gambling.


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