B.C. colleges vulnerable to money laundering, report finds

B.C.'s colleges and post-secondary institutions may be an avenue for money laundering, the author of an explosive report issued this week says.

Former RCMP deputy commissioner Peter German,in his reportDirty MoneyPart Two, foundsome private and public post-secondary institutions accept cash for tuitionand other expenses.

He writes that his team received tips that some international students have been known to register at colleges in person and then, after paying their fees, "withdraw and receive an institutional cheque in reimbursement for their fees."

If the cash comes from the proceeds of crime, this is a classic way of turning dirty money into funds that appear clean.

WATCH: What is money laundering?

CBC Explains: Money Laundering

5 years ago

Duration 1:36

A breakdown of money laundering: what, how and why.

Student brings $9Kcash in duffel bag

The report also notesthat a studentrecently appeared at an unnamed college with a duffel bag of $9,000 in cash, asking to deposit it minus a charge of $150 the student owed with the college.

"Who would have thought private schools and universities would be accepting bulk cash from people and potentially acting as banks issuing cheques for bulk cash?"askedB.C. Attorney General DavidEby in an interview.

Eby sayshis NDP government is looking at requiring all B.C. businesses to report cash transactions over $10,000 to the federal anti-laundering watchdog known as FINTRAC.

German saidhis team also received tipsabout private colleges accepting cash for tuition, which,for an international student, tends to be a minimum of $7,000 to $10,000.

'Whack a mole'

The section regarding colleges forms part of a chapter that German devotes to an analysis of where dirty cash can moveas criminals seek ways to turn it into apparently legitimate money.

Calling it the "whack a mole" phenomenon, German identifiescryptocurrencies, auction houses, luxury boats and cash-based cannabis businesses as vulnerable to use by money launderers.

These businesses are vehicles where money launderers may attempt to clean their money in addition to the previously identified real estate industry, casinos and luxury cars.

El Chapo'sdrug lieutenant

German notesthat the book Hunting El Chapodescribes how the Mexican drug kingpin's "lieutenant" apparently registered at a private Vancouver business college as a cover for his illegal activities.

The book names Columbia College as the place where point man Jesus Herrera Esperanza, a.k.a. "Hondo,"was enrolled in 2013 at age 22.

German notes that "there is no suggestion that the college was aware of [Esperanza's] connection or that it knowingly accepted laundered proceeds of crime."

Columbia College president Robin Hemmingsen wrote in an email to CBC that it has no record of a person named Jesus Herrara Esperanza ever registering with the college. She wrote thecollege, which is private butnon-profit, does not accept cash from newinternational students

Cash at Douglas College ending soon

German notes that a number of BC's public post-secondary institutions accept cashbut are not uniform in their criteria.

Some do, some don't and some have limits.

University of British Columbiaspokesperson Matthew Ramsey told CBC the university has not accepted cash for more than 10 years.

Simon Fraser University spokesperson Theodore Tsang wrote in an email that the university stopped accepting cash in 2017.

Publicly funded Douglas College still accepts cash.

Spokesperson Regan Lal told CBCNews very few studentspay in cash and the collegeis ending itas a method of payment in 2020.