R. v. Nguyen et al Date:, 2014 BCPC 95

Citation: R. v. Nguyen et al Date: 20140430 2014 BCPC 0095 File No: 201799-1 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. NAM HOANG NGUYEN THI NGOC BICH NGUYEN THU THI NGUYEN REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE M. GIARDINI Counsel for the Crown: Peter Eccles & Michelle Wiancko Counsel for Thi Ngoc Bich Nguyen: Matthew Nathanson & Gloria Ng Counsel for Thu Thi Nguyen: Nathaniel Hartney Counsel for Nam Hoang Nguyen: Kristy Neurauter & Andrew Nelson

Place of Hearing: Vancouver, B.C. Dates of Hearing: Nov 1-4, 7-10, 24, 30, 2011; May 16-17, 29-30, 2012; July 19-20, 23-25, 27, 2012; Aug. 7-8, 14-17, 2012; Sept. 26-27, 2012; Nov. 27, 30, 2012; Dec. 3, 18-19, 2012; Apr. 29, May 2, 2013; Jun. 24-25, 2013 Date of Judgment: April 30, 2014 A Corrigendum was released by the Court on May 16, 2014. The corrections have been made to the text and the Corrigendum is appended to this document.

INTRODUCTION [ 1 ] The three accused, Thi Ngnoc Bich Nguyen (“Bich”), Thu Thi Nguyen (“Thu Thi”), and Nam Hoang Nguyen (“Nam”) are charged individually and jointly with laundering the proceeds of crime contrary to s. 462.31 of the Criminal Code . Bich is also charged, individually, with a single stand-alone charge of possession of the proceeds of crime. Since all three accused have the same surname, I have used one of their first names (the name in parentheses above) when referring to them in this decision. In doing so, I mean no disrespect.

The charges against the accused are: Count 1 - Bich is charged with having dealt with $15,543,981 (Canadian) between September 1, 2003, and May 18, 2005, at or near Vancouver, British Columbia and Toronto, Ontario, with the intent to conceal or convert those funds knowing or believing that those funds were obtained or derived directly or indirectly as a result of the commission of offences under the Controlled Drugs and Substances Act ; Count 2 - Bich is also charged with unlawfully possessing $174,530 (Canadian) knowing or believing that all or part of that money was obtained directly or indirectly as a result of the commission of offences under the Controlled Drugs and Substances Act .

This offence is alleged to have occurred on May 17, 2005, at Vancouver, British Columbia; Count 3 - Thu Thi is charged with having dealt with $7,229,880 (Canadian) knowing or believing that all or part of those funds were obtained or derived directly or indirectly as a result of the commission of offences under the Controlled Drugs and Substances Act .

This offence allegedly occurred between July 15, 2003, and February 9, 2005, at or near Vancouver, British Columbia and Toronto, Ontario; Count 4 - Nam is charged with having dealt with $1,330,160 (Canadian) knowing or believing that all or part of those funds were obtained or derived directly or indirectly as a result of the commission of offences under the Controlled Drugs and Substances Act .

That offence is alleged to have occurred between August 11, 2003, and August 30, 2003, at or near Vancouver, British Columbia; Count 5 - Bich, Thu Thi and Nam are all charged with having dealt with $24,104,021 (Canadian) knowing or believing that all or part of those funds were obtained or derived directly or indirectly as a result of the commission of offences under the Controlled Drugs and Substances Act .

This was alleged to have occurred between July 15, 2003 and May 18, 2005, at or near Vancouver, British Columbia and Toronto, Ontario. [ 2 ] These charges were laid in December 2009, as a result of an investigation that began with a chance encounter on May 17, 2005, between Sgt. Andrew and a woman later identified as Bich. On that day Sgt.

Andrew, an RCMP officer with the Integrated Proceeds of Crime Unit, was conducting surveillance on the offices of a currency exchange business called Calgary Foreign Exchange Ltd. (“Calforex”) located at 1146 Robson Street, Vancouver, because he believed that currency exchange was being used to launder proceeds of crime. [ 3 ] While he was watching the Calforex office he saw a Dodge Caravan pull up. A woman got out and entered the Calforex currency exchange. Sgt. Andrew became suspicious because of the appearance of a bulky black bag the woman carried into Calforex.

When the woman came out, approximately half an hour later, and drove away he followed her to East Vancouver where the Dodge Caravan pulled over to the side of the road. Sgt. Andrew went to the Dodge Caravan and spoke to Bich who was the driver.

That interaction at the roadside led to an investigation which eventually resulted in Bich‘s arrest and the discovery of $168,100 (Canadian) in $100 bills in a black bag and $6,430 (Canadian) in mixed bills in a paper bag, both of which were found in the Dodge Caravan. [ 4 ] Following Bich’s arrest police officers went to the Calforex office and purchased the $133,415 in US currency which had been exchanged into Canadian currency by Bich on May 17, 2005.

Police officers later obtained a search warrant and searched the Calforex office in Vancouver and seized documents relating to a business called Trans Vietnam Money Services. Later still the police obtained a warrant and searched premises at 2140 Kingsway, Vancouver which was the business address of Trans Vietnam Money Services and

another business called Vietnam Travel Centre. The police seized various documents. Over the course of the investigation the police obtained other documents and information including:

a) business records related to currency exchange transactions conducted by Trans Vietnam Money Services, Bich and Thu Thi through a Calforex office in Toronto, Ontario;

b) banking records from TD Bank Financial Group relating to accounts held by Vietnam Travel Centre, Bich and Thu Thi;

c) business records from the Financial Transactions and Reports Analysis Centre of Canada ("Fintrac”) relating to Bich, Thu Thi, Nam, Eric Vijfhuizen, Vietnam Travel Centre and Trans Vietnam Money Services;

d) tax records from the Canada Revenue Agency regarding tax returns for the years 2000 to 2004 for Bich, Thu Thi, Nam, and Vietnam Travel Centre;

e) information regarding four residences allegedly associated to one or more of the three accused; namely, 3016 Charles Street, Vancouver, 1941 Upland Drive, Vancouver, 3435 Price Street, Vancouver, 3195 East 49 th Avenue, Vancouver, and 3522 Haida Drive, Vancouver. [ 5 ] As a result of their investigation the police concluded that Bich, Thu Thi and Nam had together exchanged approximately $18 000,000 (US) into $24,104,021 (Canadian) in the period from July 16, 2003, to May 17, 2005.

These exchanges occurred through 178 separate transactions conducted at Calforex. [ 6 ] A Charter voir dire was held in the summer of 2011 as Bich asserted there were multiple breaches of her s.8, s.9, and s.10 Charter rights. My ruling on that voir dire is indexed as: R. v. Nguyen, Nguyen, Nguyen, and Vietnam Travel Inc. (October 26, 2011), Vancouver 201799-1 (BCPC) THE ISSUES [ 7 ] The overarching issue in this case is whether the evidence tendered at trial establishes beyond a reasonable doubt that the three accused knowingly “laundered” money which was the proceeds of crime.

This is a case based on circumstantial evidence. The three accused, as is their right, did not call evidence. There is no direct evidence about the source of the US currency that the three accused are said to have exchanged at Calforex, nor is there direct evidence of what happened to the Canadian currency after the exchanges.

Accordingly, one of the issues to be considered is whether the only reasonable inference to be drawn from the proven facts is that the three accused knew or believed the currency they apparently exchanged was obtained or derived, directly or indirectly, as a result of the commission of an indictable offence. [ 8 ] Other issues that arise in this case are:

a) Has it been proven Thu Thi and Nam, who were in court, are the persons referred to in the evidence before the court?

b) Has it been proven that the persons who conducted the currency exchanges at Calforex were the three accused?

c) What weight should be given to expert opinion of Sgt. Gray?

d) Does the evidence establish that the currency exchanged at Calforex was obtained or derived from crime?

e) Did the three accused or any one of them intend to conceal or convert the currency exchanged at Calforex? BACKGROUND [ 9 ] In setting out the background facts I have drawn on the Crown’s written argument for the format and organization of the facts. Investigation of Bich on May 17, 2005 [ 10 ] As noted in the Introduction, the initial encounter between Sgt. Andrew and Bich was a chance encounter. Sgt. Andrew was parked across the street from Calforex on Robson Street watching for several "targets" he was pursuing. Bich was not one of them.

When she got out of a green Dodge Caravan and parked in front of Calforex, Sgt. Andrew noted she had a black bag with shoulder straps. The bag appeared to be bulky and fairly heavy. Sgt. Andrew thought it was possible the black bag might contain money. He saw Bich go into the Calforex office but could not see her after she entered the building. He got out of his vehicle and looked into the Calforex office but did not see Bich in the lobby. [ 11 ] Sgt. Andrew saw Bich leave the Calforex office and noted the black bag appeared to be smaller and lighter. He decided to follow her and asked a fellow RCMP officer, Cpl.

Kolot, and Vancouver police to provide assistance. Sgt. Andrew followed the Dodge Caravan (licence number 913 BKS) being driven by Bich until it stopped and pulled over to the side of the road on Nootka Street. He stopped his own vehicle and approached the Dodge Caravan. He identified himself and advised Bich he was stopping her for a proceeds of crime investigation. Sgt. Andrew had a conversation with Bich and asked for her driver’s licence and confirmed her address. During the conversation he asked Bich where she was coming from. She answered she had been shopping downtown or words to that effect. Sgt.

Andrew had a further conversation with Bich. He asked her whose vehicle it was. She said it was a friend’s. He asked her what she was doing downtown. She responded she was doing travel business. My ruling on the admissibility of those statements is indexed as: R. v. Nguyen, Nguyen and Nguyen (September 4, 2012), Vancouver 201799-1 (BCPC)

[ 12 ] While Sgt. Andrew was at the roadside with Bich, his colleague Cpl. Kolot arrived at the scene. Cpl. Kolot overheard the conversation Sgt. Andrew had with Bich. He also overheard Bich say she did not understand exactly what Sgt. Andrew was saying. At one point, Cpl. Kolot asked Bich if he could search the Dodge Caravan. Bich asked him if he had a warrant. At that point, Cpl. Kolot was somewhat taken aback because her English seemed to improve. She appeared to be a bit more sophisticated or articulate than he had thought based on his earlier observations. [ 13 ] Cpl. Kolot then had a conversation with Sgt.

Andrew. Cpl. Kolot called Calforex and eventually spoke to David Baker, the wholesale vault manager. Cpl. Kolot learned that Bich had conducted a large currency exchange transaction that day whereby she had converted approximately $130,000 (US) into Canadian currency. [ 14 ] Bich was arrested at the roadside and the Dodge Caravan was searched. The police found the following:

a) a black bag in which they found Bich‘s wallet and $168,100 (Canadian) in $100 denominations; b) $6,430 (Canadian) in mixed bills in a brown paper bag;

c) a receipt from Calforex dated May 17, 2005, for $133,415 (US);

d) a portable USB storage device which was later found to contain a spreadsheet listing currency exchange transactions from February 2005 to May 2005;

e) miscellaneous identification, receipts, and notebooks in Bich’s name;

f) Bich‘s last will and testament naming Thu Thi (who was identified as “my sister” in the document) as her trustee and the sole beneficiary;

g) mortgage documents for 1941 Upland Drive, Vancouver, British Columbia, in Bich’s name; and

h) a mortgage caveat dated February 4, 2003, registered against 3195 East 49 th Avenue, Vancouver, British Columbia. [ 15 ] After the search of the Dodge Caravan, Bich was taken to RCMP headquarters on Heather Street where she was interviewed. That interview was not tendered as evidence at trial. Attendance at Calforex on May 17, 2005 [ 16 ] Police officers went to the Calforex office on Robson Street and arranged to buy back the US currency Bich had exchanged earlier that day. The police bought the $133,415 (US) from Calforex. The next day they arranged for an officer with the Richmond RCMP police dog

section and police dog Casey to screen that US currency to determine if there was an odour of drugs on the currency. The officer reported that police dog Casey had detected the odour of drugs on the seized US currency. However, at trial the Crown conceded this evidence could only be given limited weight in the circumstances of this case. The Crown said, ultimately, little turned on this evidence. The defence noted that Cpl. Brecknell, the exhibits officer, acknowledged he was unable to eliminate potential sources of contamination. Further, Sgt.

Gray, who provided opinion evidence for the Crown, acknowledged that traces of drug residue can remain on currency for long periods of time. [ 17 ] The police counted the denominations of bills that comprised the $133,415 (US). They found there were: 104 -$100 bills, 100 - $50 bills, 5900 -$20 bills, one -$10 bill and one - $5 bill. This was consistent with the information contained on the receipt seized during the search of the Calforex office in Vancouver. The Canadian currency seized from Bich was also counted and found to consist of 1681- $100 bills and another $6,430 in mixed denominations.

Search of Calforex on May 24, 2005 [ 18 ] Police officers went to the Calforex offices on Robson Street on May 24, 2005, and conducted a search for documents relating to Trans Vietnam Money Services. The police seized the following documents:

a) Calforex forms headed "Client Application Forms for Brokers and Business Known Clients" dated September 2, 2003, March 10, 2004, March 25, 2004, and January 14, 2005. The customer signature on the September 2, 2003, form is indecipherable, however the name of the business is listed as Trans Vietnam Money Services with an address at 2140 Kingsway. The nature of the business is described as cheque-cashing and money services. Thu Thi is the name of the owner/main shareholder and Bich is listed as an employee who is an authorized person.

In Thu Thi’s case an Ontario driver’s licence and a SIN number are listed on the form. The SIN number matches the one for Thu Thi on documents filed pursuant to the Canada Evidence Act . In Bich’s case both the SIN and driver’s licence number listed match the ones on documents filed pursuant Canada Evidence Act . On the March 10, 2004, form the business name and information is the same. The owner/main shareholder is listed as Thu Thi. Bich is listed as an authorized person.

The form is different from the September 2003 form as it does not require identification of the relationship of the authorized person to the business owner. On the March 10, 2004, form Bich is listed as a travel agent. On the March 25, 2004, form the information regarding the business is largely the same. The owner/main shareholder is listed as Thu Thi. However, her home address is shown as an address on Queen Street in Toronto, Ontario, but a Vancouver telephone number is given. On the January 14, 2005, form the business information is largely the same.

The owner/main shareholder is listed as Thu Thi with a home address at 1940 Upland Street in Vancouver. Bich is listed as an authorized person with a home address on Kingsway in Vancouver; her occupation is listed as a travel agent. Two other client application forms were seized: one dated August 11, 2003, and another undated. However, when Mr. Baker identified them he did not appear as certain in his identification of them as he did with the other application forms. On the August 11, 2003, form Nam is listed as

an employee and authorized person.

b) two business licences from the City of Vancouver one was issued May 28, 2004, and the other was issued December 7, 2004, in the name of Thu Thi doing business as Trans Vietnam Money Services at 2140 Kingsway, Vancouver, BC. The business type is listed as money services with the subtype as “currency exchange”. Both business licences contained a notation “shared space within existing travel agency”.

c) a business card for Vietnam Travel which listed Thu Nguyen as director. The name “Becky” with the number xxx was handwritten on the card;

d) a statement of registration of general partnership or sole proprietorship filed with the Registrar of Companies in British Columbia for Trans Vietnam Money Services operating at 2140 Kingsway, Vancouver, BC. The start date of the business in British Columbia is shown as July 1, 2003. The nature of the business is described as cheque-cashing and money transfer service.

The owner is shown as Thu Thi with an address at 1941 Upland Drive, Vancouver. e) 44 Calforex ledger sheets titled "Business Known Clients and Brokers – Large Cash Transactions" which recorded currency exchange transactions for Trans Vietnam Money Services from July 16, 2003, to May 17, 2005, totaling approximately $24 million (Canadian). Evidence of Calforex employees [ 19 ] Mr. David Baker worked for Calforex in Vancouver for five years including 2003, 2004 and 2005. He was the wholesale vault manager. One of his responsibilities was to sign up major commercial clients who wanted to conduct currency exchanges.

In doing so he would obtain photo identification, a copy of the business licence and would fill out the appropriate Calforex forms. When he signed up business customers he would verify that the identification provided was correct or legitimate. He did not recall the exact steps he took. However, Mr. Baker agreed that if photo identification was provided he would make sure the picture matched the person who presented it. If the customer provided a business licence one of the other employees, the courier, would visit the business location. [ 20 ] Mr.

Baker was shown several Calforex client application forms in the name of Trans Vietnam Money Services. He confirmed that in some cases it was his signature on the forms. He did not have an independent recollection of filling out the specific forms he was shown relating to this case. However, he identified those forms that contained his writing. When he signed on the forms he was signing off that he had verified the information on the form.

He said if he ignored his responsibilities to gather client information, identification and the like, one of the consequences was disciplinary action up to possible termination. [ 21 ] Mr. Baker reviewed the Calforex ledger sheets which recorded transactions carried out on behalf of Trans Vietnam Money Services. He said most of the time he filled out those transaction sheets. He would have the client sign the sheet when the exchange transaction was completed. He was asked whether he had an obligation to ensure information was accurately filled out on the ledger sheets. He said he followed company protocol.

He acknowledged, however, that he had no independent recollection of the various transactions except by reference to the ledger sheets. He did not remember what the persons who carried out the transactions looked like, who they were, or anything about them. [ 22 ] In cross-examination Mr. Baker acknowledged he had no formal training in how to detect fake identification. The training he received was from other clerks and cashiers. He said the requirements for identification changed over the years he worked at Calforex. Whatever the requirements were at the time, he complied with them. [ 23 ] Ms.

Sund worked in Calforex’s head office in Calgary. She started with the company in 1997 as a foreign exchange teller and in 2003, 2004, 2005 she was assistant manager of operations for Calforex. Additionally she was the Fintrac reporting officer. As such she was responsible for the collection of information from known business clients who wanted to transact business with Calforex. Calforex had a wholesale division that served other wholesale customers, such as foreign exchanges, across Canada. In her capacity as Fintrac reporting officer Ms.

Sund received client information from all branches and used that information to prepare reports as required by Fintrac. [ 24 ] Ms. Sund testified there were several policies in place to ensure that she actually received the information she needed from the branches. In addition to those policies all employees were required to sign a declaration every quarter that they would abide by the policies and procedures in place at Calforex. Ms. Sund said if employees did not follow the policies and procedures there was “the threat of dismissal”. [ 25 ] Ms. Sund knew David Baker.

He was a foreign exchange teller and also had the responsibility of managing the wholesale department that completed transactions with Calforex’s known business clients. She said that a known business client was another foreign exchange that wanted to have access to currencies from larger suppliers. [ 26 ] Ms. Sund said that from 2003 to 2005 the policy and procedure for signing up known business clients was that an application form had to be completed.

The potential known business clients came to the office, met the employee at the branch who was responsible for those transactions, provided identification, and discussed the type of transactions they wanted to undertake. Calforex collected the name, address, business information, and identification from the prospective known client. Copies of the business licences or other documents would be received to verify that a business existed. [ 27 ] Ms. Sund said that Calforex used ledger sheets to record all transactions between Calforex and their wholesale clients.

Each major business clients had a set of ledger sheets for their business. The information recorded on the ledger sheets included: date, time, branch, buy or sell, foreign amount, Canadian amount, payment received, payment issued, and transaction reference number. The known business client had to sign the ledger sheet and a Calforex employee also initialled or signed the sheet.

Documents produced from Calforex Toronto office [ 28 ] During the investigation the police obtained production orders directing Calforex to produce all business documents relating to transactions conducted by Trans Vietnam Money Services. In particular, the police obtained documents of transactions conducted in the Toronto, Ontario, office of Calforex. These transactions involved someone leaving US currency at the Toronto Calforex and Canadian currency being picked up at the Vancouver Calforex office by Bich and Thu Thi. The following documents were produced pursuant to the production orders and subsequently entered into evidence:

a) two client application forms in the business name of Toronto FX for Brokers and Business Known Clients for Toronto Calforex dated March 3, 2004 (2004-03-03) and January 24, 2005 (2005-01-24);

b) a master business licence for Toronto FX, a sole proprietorship which listed Loan Thi Thanh Luong, presumably as the owner;

c) a client application form for Brokers and Business Known Clients for ACB Financial Group dated 02/2005 which listed the registration number as 1628381 and the owner as Kevin Pham;

d) incorporation documents for 1628381 Ontario Inc. (presumably doing business as ACB Financial Group) dated August 11, 2004, which listed the director as Kevin Pham;

e) a client application form for Brokers and Business Clients for Saigon Money Exchange located at 958 College Street, Toronto, Ontario dated 2004-03-12;

f) an Ontario master business licence for Kevin Pham doing business as Saigon Money exchange issued 2003-01-21;

g) a spreadsheet titled "Transactions for Trans Vietnam Money Services" which listed 43 transactions showing the conversion of $7,505,000 (US) to $9,774,053 (Canadian) between February 6, 2004, and March 11, 2005;

h) a Calforex ledger of large cash transactions for Business Known Clients and Brokers showing transactions conducted by Toronto FX, ACB Financial Group and Saigon Money. Search of Vietnam Travel Centre [ 29 ] On June 8, 2005, police officers searched the office of Vietnam Travel Centre at 2140 Kingsway, Vancouver, which also housed Trans Vietnam Money Services. During that search, police officers seized the following items which were entered into evidence:

a) a package of brown lunch bags similar to the bags seized from the Dodge Caravan on May 17, 2005, and similar to the brown paper bag containing the $6,340 seized on May 17, 2005;

b) some business and banking documents including: a Terasen bill and two letters addressed to Thu Thi at 3382 Cobblestone Way, Vancouver; a blank RBC deposit slip in the name of Trans Vietnam Money Services; two RBC account statements for Trans Vietnam Money Services dated Sept./Oct./03 (balance $3842.34) and Dec. 04/Jan 05 (balance $3736.34);

c) a folder containing Money Gram transfer receipts in the name of Trans Vietnam Money Services;

d) a Revenue Canada statement of business activities;

e) the purchase contract for Vietnam Travel Centre between Thu Thi and Bich;

f) a copy of two City of Vancouver business licences for 2004 - 2005, one for Vietnam Travel Centre, the other for Trans Vietnam Money Services.

g) T4 statements for 2001 in the name of Bich (showing income of $7,500), for 2002 in the name of Thu Thi (showing income of $10,850), and for Tran Giap (showing income of $8,050). All of the T4 slips were addressed to 105 – 2252 Kingsway, Vancouver;

h) a record of employment for Bich for the period of January 17, 2003 to July 3, 2004, which showed an income of $12,600. The record of employment was addressed to 105 – 2242 Kingsway, Vancouver;

i) applications for IATA Travel Agent ID for Thu Thi, Bich, and three other persons;

j) a statement of income for Vietnam Travel Centre for the period of January 13, 2003, to December 31, 2003, which showed a net loss for that period of $70,682;

k) a statement of income for Vietnam Travel Centre for the period of January 1, 2004, to December 31, 2004, which showed a net loss for that period of $43,069;

l) a TD Canada Trust account statement dated March 31, 2005, to April 29, 2005, in the name of Thu Thi addressed to 1941 Upland Drive, Vancouver;

m) a form 11 "Verification of Bank Relationships to Comply with Registration Under the Travel Agents Act" listing four separate accounts in the name of Vietnam Travel Centre held at TD Canada Trust.

Evidence about the businesses and the relationship of the three accused [ 30 ] In early January 2000 a numbered company, 598733 BC Limited, was incorporated. A special resolution was passed changing the name of the company to Vietnam Travel Inc. This was registered with the Registrar of Companies in March 2000. Additionally, in March 2000 a notice of change of directors was filed with the Registrar of Companies. Bich was the sole director and sole officer of Vietnam Travel Inc., doing business as Vietnam Travel Centre. Vietnam Travel Centre was located at 2140 Kingsway in Vancouver.

Bich sold the travel agency to Thu Thi on December 16, 2002. Income tax records show Bich continued to work there following the sale as she earned income from Vietnam Travel Centre in 2003 and 2004. [ 31 ] Bich and Thu Thi are sisters. A last will and testament of Bich dated December 19, 2001,found when she was searched incident to arrest, lists “my sister” Thu Thi as her trustee and sole beneficiary.

The will lists their residence at the time as 1941 Upland Drive, Vancouver. [ 32 ] Information obtained from TD Bank Financial Group showed that Bich and Thu Thi had signing authority for the accounts of Vietnam Travel Centre. Thu Thi is listed as president and Bich is listed as secretary. Thu Thi owned Vietnam Travel Centre between January 13, 2003, and May 17, 2005. Thu Thi also owned Trans Vietnam Money Services. She registered the name Trans Vietnam Money Services, an unincorporated proprietorship, with the Corporate Registry of British Columbia on June 13, 2003.

Trans Vietnam Money Services was also located at 2140 Kingsway in Vancouver. [ 33 ] Thu Thi is Nam’s sister. According to information filed when she and Nam each applied for a SIN number, the name they listed for their father was the same. Bich also listed her father’s name on her SIN application. However, although it was very similar to the name listed by Thu Thi and Nam on their applications, it was not exactly the same. [ 34 ] Income tax records filed by Nam for tax years 2000 to 2004 inclusive, suggest Nam operated his own business because he reported business income for those years.

The Crown alleges Nam is the brother of Bich and Thu Thi. According to the Calforex records Nam apparently conducted money exchanges for Trans Vietnam Money Services for a period of time in August 2003. He did not report any employment income from Vietnam Travel Centre or Trans Vietnam Money Services. [ 35 ] Trans Vietnam Money Services used Calforex to conduct currency exchanges.

When the police searched the Calforex offices in Vancouver they found four application forms titled "Client Application Forms for Brokers and Business Known Clients" dated September 2, 2003, March 10, 2004, March 25, 2004, and January 14, 2005. These application forms indicated that Trans Vietnam Money Services was a cheque-cashing and money service businesses. Its address was 2140 Kingsway, Vancouver, British Columbia. The owner of the business was listed as Thu Thi. The persons authorized to conduct business transactions on behalf of Trans Vietnam Money Services were Thu Thi, Bich, and Nam.

From July 16, 2003, to May 17, 2005 Thu Thi, Bich, and Nam conducted a total of $24,104,021 (Canadian) worth of transactions on the Trans Vietnam Money Services account at Calforex. [ 36 ] Vietnam Travel Inc. filed income tax documents for the tax years ending in the fall of 2000, 2001 and 2002. In those three taxation periods it only reported taxable income in the October 31, 2001, tax filing. That income was $10,156. Vietnam Travel Inc. did not report any income for 2003 and 2004.

However, two statements of income for Vietnam Travel Centre found during the search of Vietnam Travel Centre showed net losses of approximately $114,000.00. Trans Vietnam Money Services showed no income at all from 2002 to 2004. Records produced by TD Bank Financial Group [ 37 ] A production order was served on the TD Bank Financial Group requiring it to produce banking records relating to accounts held by Vietnam Travel Centre, Bich, and Thu Thi. Sgt.

Andrew reviewed the account records produced by TD Bank Financial Group and testified about what they contained. [ 38 ] The account records in the name of Vietnam Travel Centre showed the following:

a) Thu Thi and Bich both had signing authority and were listed as president and secretary respectively of Vietnam Travel Centre;

b) as of August 9, 2005, Vietnam Travel Centre had assets of $55,245.80 and liabilities of $15,000. The accounts appeared to be for business related purposes. [ 39 ] Sgt. Andrew testified he reviewed the TD Bank Financial Group records for Vietnam Travel Centre to determine if there were any transactions consistent with the currency exchange activity he had knowledge of through the investigation at Calforex. He said the activity recorded in the accounts appeared to relate to business activity of the travel agency.

There was a little bit of account activity in American dollars but percentage-wise it was a small amount. The vast majority of the account activity was in Canadian dollars. Sgt. Andrew did not find any records in the Vietnam Travel Centre banking documents that tracked the Calforex currency exchanges. [ 40 ] The TD Bank Financial Group account records for Bich showed that:

a) Bich had the following accounts: one RESP account, one Canadian account, one US account, one term deposit account and one home equity line of credit account;

b) as of August 9, 2005, the records indicated Bich had $13,295.38 in assets and liabilities of $265,252.79;

c) the home equity line of credit had a then current balance of $265,252.79 related to 1941 Upland Drive, Vancouver. The original home equity line of credit was for $320,000;

d) the only regular sources of income for Bich were employment insurance benefit deposits of $510 bi-weekly dating back to August 10, 2004 and family child tax benefits deposited monthly of $575.23 since April 20, 2004;

e) payments from the account included a monthly mortgage payment of $2,213.75. [ 41 ] Sgt. Andrew said a review of the bank records for Bich indicated there were no regular deposits consistent with employment income but there were sporadic deposits of lump sums. He said, with the exception of the child tax benefit and employment insurance benefits, there did not appear to be any source of income for Bich other than some cash deposits. [ 42 ] The account records for Thu Thi showed that:

a) Thu Thi had two accounts; one was a line of credit account and the other a Gold Visa account;

b) as of August 9, 2005, Thu Thi had assets of $2,718.42 and liabilities of $3,026.31;

c) payments from the account included a Bank of Nova Scotia monthly mortgage payment of $2,421.22 , (for 3522 Haida Drive, Vancouver) , a Courtesy Chev monthly payment of $732.17, a BMW Group monthly payment of $728.34, a GMAC Toronto monthly payment of $652.80, and a State Farm monthly payment of $621.57. The total monthly payments reflected in TD Bank Financial Group documents for Thu Thi were $5,156.10;

d) Bich was listed as having a power of attorney on the accounts in Thu Thi Nguyen's name including her personal accounts and her business accounts. [ 43 ] Sgt. Andrew said there were no regular deposits consistent with employment income in Thu Thi’s account but there were irregular cash deposits and transfers from other accounts, and money wires. Sgt. Andrew said there were cash deposits made to Thu Thi’s account which would slowly dwindle over time as payments were made from that account.

Business records obtained from Fintrac [ 44 ] The police obtained business records from Fintrac regarding any transactions Fintrac had with Bich, Thu Thi, Nam, Eric Vijfhuizen, (manager at Vietnam Travel Centre) Vietnam Travel Centre and Trans Vietnam Money Services between August 12, 2003, and May 18, 2005. The information received from Fintrac showed that none of these named persons or businesses reported any activity to Fintrac.

However, other business entities, other than the individuals and entities named above, did report a total of 211 large cash transactions, three suspicious transactions and two electronic funds transfers. Calforex submitted a number of large cash transaction reports for transactions conducted by Nam, Bich, and Thu Thi on behalf of Trans Vietnam Money Services. Sgt. Andrew testified his review of the records showed Calforex reported to Fintrac all of the transactions conducted by the three accused with Calforex.

The Toronto Dominion Bank and Royal Bank of Canada also submitted large cash transaction reports on transactions conducted by Bich, Thu Thi, and Eric Vijfhuizen on behalf of Vietnam Travel Centre.

Three suspicious transaction reports were submitted by three different entities on transactions conducted by Thu Thi on behalf of Trans Vietnam Money Services and Vietnam Travel Centre and two electronic funds transfer reports were submitted by Toronto Dominion Bank in relation to transactions ordered by Thu Thi. [ 45 ] Information obtained from Fintrac also showed that Fintrac searched its database to determine whether certain reports required under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act had been filed by either Trans Vietnam Money Services or Vietnam Travel Centre.

The results of the search of the Fintrac database showed:

a) neither Trans Vietnam Money Services or Vietnam Travel Centre submitted any suspicious transaction reports between November 8, 2001, and December 6, 2005;

b) neither Trans Vietnam Money Services or Vietnam Travel Centre submitted any terrorist property reports between November 8, 2001, and December 6, 2005;

c) neither Trans Vietnam Money Services or Vietnam Travel Centre submitted any large cash transaction reports between January 31, 2003, and December 6, 2005;

d) neither Trans Vietnam Money Services nor Vietnam Travel Centre submitted any electronic funds transfer reports between March 31, 2003 and December 6, 2005. Income Tax records of three accused and Vietnam Travel Centre [ 46 ] Pursuant to a production order served on Canada Revenue Agency, Sgt. Andrew obtained tax records for the three accused and for Vietnam Travel Centre for the period of 2000 to 2004 inclusive. Those records showed the following: Bich :

a) for tax year 2000 no reported earnings;

b) for tax year 2001 reported earnings of $7,857;

c) for tax year 2002 reported earnings of $7,060;

d) for tax year 2003 reported earnings of $21,600;

e) for tax year 2004 reported earnings of $19,100;

f) for tax years 2001, 2003, and 2004, Bich reported earned income from Vietnam Travel Centre;

g) Bich sold the Vietnam Travel Centre business to her sister Thu Thi in January 2003, thereafter records indicate Bich was paid as an employee;

h) Bich collected employment insurance benefits in tax years 2004 and 2005;

i) in tax year 2002 Bich was employed by Liem Thu Tri doing business as Kim Tri Currency Exchange. Thu Thi :

a) for tax year 2000 reported earnings of $11,706, the income reported for 2000 was all from social assistance;

b) for tax year 2001 reported earnings of $12,484, the income reported for 2001 was in part from social assistance ($8,884) and in

part income from Vietnam Travel Centre ($3,600);

c) for tax year 2002 reported earnings of $10,850, the income reported for 2002 was reported as income from Vietnam Travel Centre;

d) for tax year 2003 a reported business loss of $68,642;

e) for tax year 2004 a reported business loss of $41,182. Sgt. Andrew testified the business losses in 2003 and 2004 related to Vietnam Travel Centre but because Thu Thi operated that business as sole proprietor it was recorded as personal income. He further testified the tax losses that appeared in Thu Thi’s tax returns were consistent with documents seized during the search of Vietnam Travel Centre. Nam :

a) for tax year 2000 reported earnings from employment of $958;

b) for tax year 2000 reported net business income or other income of $6100;

c) for tax year 2001 reported net business income or other income of $7568; Sgt. Andrew testified that Nam received quarterly GST cheques from May 2001 to April 5, 2002, which were sent to a civic address with the same postal code as 3016 Charles Street, Vancouver;

d) for tax year 2002 reported net business income or other income of $9740;

e) for tax year 2003 reported net business income or other income of $19,273;

f) for tax year 2004 reported net business income or other income of $21,487;

g) there was no reported employment income from Thu Thi doing business as Vietnam Travel Centre;

h) there was no reported business income from Trans Vietnam Money Services. Vietnam Travel Centre :

a) for tax year ending October 31, 2000, Vietnam Travel Inc. reported a non-capital loss of $48 and net (non-farming income) loss of $84;

b) for tax year ending October 31, 2001, Vietnam Travel Inc. reported taxable income of $10,156;

c) for tax year ending October 31, 2002, Vietnam Travel Inc. reported a business loss of $61,266;

d) for tax years 2000, 2001, 2002, Bich was the sole director of Vietnam Travel Inc.;

e) in January 2003, Bich sold Vietnam Travel Centre to Thu Thi;

f) for 2003 Vietnam Travel Inc. did not report any income. A statement of income for the period of January 13, 2003, to December 31, 2003, found during the search of Vietnam Travel Centre showed a net loss of $70,682 for Vietnam Travel Centre;

g) for 2004 Vietnam Travel Inc. did not report any income. A statement of income for the period January 1, 2004 to December 31, 2004 showed a net loss of $43,069 for Vietnam Travel Centre. Other drug-related criminal investigations [ 47 ] As part of its case, the Crown led evidence about other investigations, separate from the investigation into the case at bar, for the purpose of drawing a link between the three accused in this case and other criminal enterprises.

This evidence was led in support of the Crown's theory that the large sums of money exchanged by the three accused were obtained or derived, directly or indirectly, from drug-related offences. I allowed the Crown to call this evidence over the strenuous objection of the defence. My ruling on this point is indexed as: R. v. Nguyen, Nguyen and Nguyen (July 24, 2012), Vancouver 201799-1 (BCPC). 3016 Charles Street [ 48 ] In March 1999 Bich bought a property at 3016 Charles Street in Vancouver, which she owned until May 2001.

On September 18, 2000, Detective Constable Miles was a member of the property support team in the Vancouver Police Department drug squad. His duties were to investigate marijuana grow operations. He went to the Charles Street residence on September 18, 2000, and noted there were no signs of life at the residence. He noted: a fast meter, windows covered with a type of Venetian blind behind other window coverings, and a smell of marijuana coming from the house.

Detective Constable Miles said he had gone to a number of marijuana grow operations and recognized the smell of bulk marijuana. [ 49 ] Detective Constable Miles obtained a search warrant for the Charles Street residence. Detective Constable Miles said, other than the obtaining of the warrant, he only recalled that other police officers attended with him to search that house on September 20, 2000. He only recalled the name of one of the officers (Constable Osborne). He did not recall making any other observations that day.

There was nothing else he could recall about that residence. 3195 East 49 th Avenue, Vancouver [ 50 ] In mid-March 2002 Vancouver police officers began a drug trafficking investigation which included conducting surveillance of activity at 3195 East 49 th Avenue, Vancouver. A search warrant was executed at that residence on June 27, 2002. During that search police officers seized 65 pounds of packaged marijuana. The marijuana was divided into half kilogram packages which were shrink- wrapped and found packed two per bag. Various two bag packages of marijuana were found in two larger bags inside a box.

Additionally, the police seized $34,000 (Canadian). [ 51 ] Constable Kindratsky was a member of the drug

section of the Vancouver Police Department in May 2002 when he was involved in surveillance conducted on 3195 East 49 th Avenue, Vancouver. On one occasion in May (date not specified) he followed a van from the vicinity of East 49 th Avenue and McKinnon Street in Vancouver to Highway 1 and to the Lougheed Highway and subsequently to a residence in Coquitlam or Port Coquitlam. This vehicle was a green van, licence number ENC 996. [ 52 ] Constable Kindratsky again dealt with the East 49 th Avenue residence on June 27, 2002.

On that occasion he was also conducting surveillance at that residence when he was asked by another officer to provide assistance at the front of the house. He eventually entered the residence. He recalled being in the kitchen when five people were brought into that room and allowed to sit at a table. There was a man, a woman and three children who he described as “juveniles”. He later escorted the woman to the police wagon. Later still, when everyone had been removed from the house, he was involved in a search of the upper floor. [ 53 ] Constable Kindratsky searched a bedroom at the northwest of the house.

In that bedroom he found a purse which had identification in it with the name of TTN, a female. The identification indicated she was born in 1987 so she would have been 15 years old at the time. In the purse he also found an airplane ticket to Vietnam as well as $14,455 (Canadian) in cash. Under a chest of drawers, in the same bedroom, he also found a cheque for $20,000 made out in the name of the man who had been arrested. Constable Kindratsky thought his name was Quang Mihn Nguyen. However, upon looking at the photocopy of the cheque, he noted the name of the payee was Quang Mihn Hoang.

He also searched another bedroom but the only thing of value he found was gold jewellery. [ 54 ] Constable Kindratsky also searched in the basement. He was looking for documents but did not find anything. However, he remembered seeing some bags of marijuana. As best he could recall the marijuana was probably wrapped in freezer bags. He recalled there was something unique about bags; namely, there were "grading marks" on the bags, such as A, AA, and AAA. He had never seen this at any other grow operation investigation he had attended. He did not recall where in the basement he saw the marijuana.

He definitely recalled the unique markings on the bags. Constable Kindratsky prepared a detailed diagram of the house at that time. [ 55 ] In cross-examination, Constable Kindratsky agreed that he did not mention anything about seeing the grading marks either in his notes or in his typed report of that incident. He explained he was not there to deal with the marijuana, that was being done by other officers. However, the marks remained in his memory because it was a unique aspect of that case. Constable Kindratsky was pressed on this point by all three defence counsel.

He agreed he had not made notes about the markings. He further agreed he had not specifically mentioned this aspect of that case to the prosecutor in his initial interview. He explained it was a 10-year-old case and once he obtained the entire package of information relating to his involvement in that case, which presumably was after the first interview with the Crown, he began remembering details. [ 56 ] Constable Mah was a member of the Emergency Response Team (ERT) who assisted in executing a search warrant on June 27, 2002, at 3195 East 49 th Avenue.

He was also the person designated to prepare the ERT report for that entry. When the ERT first entered they immediately encountered a woman who appeared at the entrance just as the door was being forced open. Following behind her was an adult male and a juvenile female. Those three people were taken into custody. Constable Mah said the ERT was searching for people and not for evidence. In the course of searching the main floor they found another juvenile female who was hiding in one of the

bedrooms on the main floor. [ 57 ] As part of the search he went into the basement of the house. In several rooms there was what appeared to him to be grow-op equipment that was stored away; for example, fans, light bulbs, and circuit boards. In one of the rooms the walls and the windows were still covered with white reflective sheeting. In another, smaller room, he saw some boxes of packaged bud marijuana. The marijuana was packaged in clear plastic zip lock bags.

There were also numerous green garbage bags that appeared to have something in them but he did not open them as it was not the ERT's role to search those items. They were in the residence to search for occupants. [ 58 ] Constable Mah said they found two adults, a man and a woman, and three "juvenile females" in the residence. In preparing to give evidence on this matter, Constable Mah went to the police property office to see whether the original exhibits seized by drug squad officers were still available. He obtained a printout of all of the items that were seized in 2002.

That printout listed 13 categories of items. Constable Mah learned that many of the items seized at the time were returned to the owner, other items were forfeited and other items were disposed of once the case was dealt with. There was only one item that remained in the exhibit locker for that case.

He also found, however, that the original documents which had been returned to the owner had been digitally scanned and stored in the Vancouver Police Department database. [ 59 ] Constable Mah and Constable Kindratsky, who had experience in dealing with bulk marijuana in the course of other investigations, testified they observed bagged marijuana at the residence.

No scientific evidence confirming the identification of the substance seized, such as a certificate of analysis, was tendered in the trial before me. [ 60 ] Detective Constable Christine Sheard went to the East 49 th Avenue residence on June 27, 2002, when the search warrant was executed. At that time she was assigned to assist Car 86 which was a unit made up of a Vancouver police officer and a worker from the Ministry of Children and Family Development who attended at police incidents that involved young people or children at risk.

She was called in to perform a search of a woman found at that residence whose name was Lan Nguyen. She did not find any drugs or other items on her. She was also asked to assist in transferring children found at the residence to another location. She recalled dealing with at least two school-age children. She, along with the police officer and Ministry worker from Car 86, took those children to a person she believed was their uncle at 1941 Upland Drive, Vancouver. She did not recall if she obtained information about the uncle by speaking directly to him or if it was given to her by him or someone else.

She took the children to the address on Upland Drive. The particulars written in her notes about the uncle are that his name was Nam Hoang Nguyen, born xxx. She also noted his driver’s licence number (xxx), cell number, and home telephone number as well as the fact that he was a self-employed Canadian citizen who had arrived in Canada in 1996. [ 61 ] Detective Constable Sheard did not have any details about the children such as their ages, names, or dates of birth. She did not have any independent recollection about her interaction with the uncle and relied on her notes in this regard.

She believed she got the information she had written in her notes directly from him but she also said the information he was their uncle could have come from one of the other officers. She could not describe him as that incident occurred some time ago. [ 62 ] A few years later another police investigation was undertaken of 3195 East 49 th Avenue, Vancouver, which resulted in a search of the residence on January 20, 2005. On that occasion Detective Constable Miles was one of the police officers assigned to investigate the residence.

When he entered the residence along with other police officers he saw a marijuana grow operation on the top floor of the residence and downstairs. The police found and he saw marijuana plants, packaged marijuana, as well as drying marijuana in the house. He recognized the plants as being marijuana, based on his extensive experience with marijuana investigations. At that time he had attended approximately 1000 marijuana grow operations and gathered grounds for 600 to 700 search warrants. He was very familiar with bulk marijuana.

The packaged marijuana seized by the police at that residence was 13 kg packaged in 49 Ziploc bags. The wet marijuana that was drying weighed approximately 3 kg. In addition to the marijuana, the police seized drug growing related paraphernalia such as lamps and ballasts. [ 63 ] Two individuals were found at the residence. One was Mr. Van Cuong Vo, who was eventually arrested and charged with cultivation of marijuana and possession for the purpose of trafficking. The other person, an unknown man, fled the scene. He was never found.

In cross-examination Detective Constable Miles acknowledged no documents or cash were seized from that house. Moreover, no charges were pursued against Mr. Vo. [ 64 ] The Crown entered into evidence several documents regarding the ownership of the property at 3195 East 49 th Avenue. Nam owned the property from August 4, 2000, to April 30, 2001. A Form B mortgage document, apparently executed by both Nam and Bich, filed at the Land Title Office showed that Bich had signed as a guarantor/ covenantor on Nam Hoang Nguyen’s mortgage for the East 49 th Avenue property.

Documents obtained from Land Title Office and BC Assessment Roll showed that Nam transferred the property to Quang Mihn Hoang who owned it between April 30, 2001, and August 3, 2005. Moreover, when Bich was arrested on May 17, 2005, a copy of a caveat registered at the BC Land Title Office against the East 49 th Avenue property was found in her possession. 7062 Edmonds Street, Burnaby [ 65 ] On March 22, 2001, RCMP officers executed a search warrant at 7062 Edmonds Street, Burnaby, in relation to theft of electricity. When the warrant was executed police officers found a marijuana grow operation at that address.

There were three separate grow rooms in the basement where the police found 263 marijuana plants. Dried marijuana was also found on the main floor of the house. In the course of the search police officers found the following in Nam’s name: pay stubs, a Hydro bill, two sales receipts, a cable bill, and a receipt for rental of a postal box. [ 66 ] Nam was arrested at the residence and subsequently charged for production of marijuana under the Controlled Drugs and Substances Act . He was fingerprinted and photographed.

Nam was convicted for production of a scheduled substance on March 22, 2001, and given a nine month conditional sentence. The conviction report shows his date of birth as xxx. Opinion Evidence of Sgt. Gray

[ 67 ] The Crown called Sgt. David Gray, an RCMP officer assigned to the Combined Forces Special Enforcement Unit, Proceeds of Crime Team. Following a voir dire on Sgt. Gray’s qualifications to give an expert opinion, the court qualified him to give opinion evidence in the following areas:

a) the identification and tracing of assets and cash derived from criminal activity, primarily drug trafficking and production, inclusive of the recognition of monies or assets as proceeds of crime and what markers to look for in doing so;

b) money laundering in general including; the methods by which cash generated by the illicit drug industry, including marijuana production and sales, is converted from foreign currencies to Canadian funds and why; which currencies and denominations are the most common to the drug trade; marijuana production, pricing, packaging, yields, and the market in and outside of Canada for bulk production and sales of marijuana. I issued a ruling regarding Sgt. Gray's qualifications as an expert which is indexed as: R. v. Nguyen, Nguyen and Nguyen (August 16, 2013), Vancouver 201799-1 (BCPC). [ 68 ] Sgt.

Gray testified and also provided an initial written expert opinion which was subsequently revised in light of the evidence given in court and submissions made by counsel on various aspects of the written expert opinion. After Sgt. Gray was qualified to give opinion evidence, his testimony regarding his expert opinion was heard in a voir dire in order to address several issues and concerns raised by defence counsel. However, later, it was agreed by all parties that Sgt.

Gray’s evidence from that second voir dire was to be admitted as evidence in the trial proper subject to arguments on the weight it should be given. The written report he referred to in his testimony was a 21 page report plus an appendix and was dated August 2, 2012. During the Crown’s questioning of Sgt. Gray he was asked to assume a number of facts that in essence mirrored other evidence adduced at trial regarding the investigation of the three accused. Materials reviewed by Sgt. Gray [ 69 ] For the purpose of preparing his expert report Sgt.

Gray reviewed the following: the report to Crown counsel, a synopsis prepared by Sgt. Andrew and four binders of materials which consisted of the documents obtained through production orders and searches pursuant to a search warrant. Sgt. Gray acknowledged his initial report was based on what he was told by Sgt. Andrew regarding the evidence to be tendered by the Crown at trial. Sgt. Gray further acknowledged he was told that what emerged at trial differed somewhat from the original materials provided to him.

Accordingly, at the request of the Crown, he revised his report and excised from his report the portions of evidence he was told were not before the court. [ 70 ] Sgt. Gray acknowledged he was also provided with transcripts of evidence or summaries of evidence by the Crown on matters that had been tendered at trial up to the point of his own testimony. He was also provided a

summary of the items recovered at various search sites that were logged in by Sgt. Brecknell, the exhibits officer.

Additionally, he reviewed: materials seized from searches at Calforex, materials seized from Vietnam Travel Centre, documents seized incident to the arrest of Bich, documents provided in the course of the investigation pursuant to production orders served on Revenue Canada, the TD Bank Financial Group, and the offices of Calforex in Toronto, Ontario, and affidavits from Fintrac setting out the results of their search of records relating to the three accused, Vietnam Travel Centre and Trans Vietnam Money Services.

He also reviewed various land title documents, vehicle transfer documents, and the like relating to the accused. Additionally, Sgt. Gray reviewed summaries of evidence relating to certain residential addresses. The cash and other items found on or with Bich [ 71 ] In his written report and in oral testimony Sgt. Gray referred to the $168,100 (Canadian) found in a black bag in the car Bich was driving and commented on the $133,415 (US) contained in a white Brinks bag which the police bought from Calforex in Vancouver. This money had been exchanged by Bich on May 17, 2005.

He noted that photographs of the money purchased by the police showed the seal on the Brinks bag. The significance of the seal was that businesses in the practice of handling large sums of currency use certain security measures to ensure the items inside are not tampered with or to prevent theft. It is a quality control measure. [ 72 ] Sgt. Gray commented on the manner in which the currency contained in the Brinks bag was packaged. The currency was in bundles and appeared to be “bank ready”.

That means it was arranged and packaged in a way that is consistent with what the Bank of Canada dictates to financial institutions. “Bank ready” means that in each individual bundle the notes must be all of the same denomination. The paper currency should be neatly and uniformly folded and so on. Sgt. Gray noted there were a small number of bills depicted in one of the photographs that were held together by a paperclip, this would not be considered “bank ready”. [ 73 ] Sgt. Gray was asked whether there was any significance to the fact the money was exclusively in US dollars.

He said it was an unusual circumstance and something of which he would take note. He noted the pre-dominance of $20 bills and said the $20 bill is the denomination of choice in large drug transactions both in the US and Canada. [ 74 ] Sgt. Gray was asked to comment on the photograph of a brown paper bag with cash that was seized from the van driven by Bich on May 17, 2005. Sgt. Gray said the money in the brown paper bag, which was approximately $6,430 (Canadian), was not in compliance with Bank of Canada policies and practices with respect to being “bank ready”.

Also, it was not in a secure container or package, in

contrast to the US currency which was in the Brinks bag with a security seal. There was no documentation accompanying the money in the brown paper bag. It was also significant that the money in the brown paper bag was separate from another large bundle of Canadian currency which was found in the vehicle; namely, the $168,100 in the black bag. Sgt. Gray also commented on $6,100 found in a wallet which had identification in Bich’s name and was found in the vehicle. [ 75 ] Sgt.

Gray said those additional facts indicated the Canadian currency found in the vehicle driven by Bich was in an amount that was somewhat larger than the US currency which was purchased from Calforex by police. The overall amount of Canadian currency, compared to the overall amount of US currency, had gone down in terms of weight and overall bulk. That was a significant factor. He described a process known as “refining”. Sgt.

Gray said one of the very real problems drug traffickers have, apart from dealing with the drugs, is dealing with the enormous amounts of money generated from mid-to-high level drug trafficking activities. Drug traffickers have to find a way of moving large amounts of money generated by illicit drug sales. Often the drugs are paid for with $20 bills. When dealing with large numbers of drug sales, this quickly adds up to a lot of money which, in $20 bills, is both bulky and heavy. If one can convert the $20 bills to $100 bills that conversion reduces the volume and weight substantially.

This allows the person involved in transporting such an amount to conceal it. [ 76 ] Essentially refining is the conversion of high denomination bills to even higher denomination bills, for example converting $20 bills to $100 bills and $100 bills to $1,000 bills etc. In Sgt. Gray’s opinion the money he saw in the photographs is consistent with a currency exchange where refining had taken place. It was also significant that there was a large bundle of money in one location, i.e. the black bag, and a smaller amount in another location, i.e. the brown paper bag. Sgt.

Gray said, in his experience in dealing with persons transporting large amounts of currency where it was suspected to be the proceeds of crime, one found a stash of large amounts of currency and often smaller bundles of currency separate from the larger stash. Often the smaller stash was a percentage of the actual value of the larger amount and represented a fee for services. [ 77 ] Sgt. Gray testified about the significance of information contained on a USB memory device found in Bich’s personal possessions when she was arrested.

He assumed that: no other financial documents were recovered at Vietnam Travel Centre, no documentation relating to any of the transactions was recovered anywhere else, and the transactions recorded on the USB memory device matched dates on Calforex documents. Sgt. Gray said the information contained in the USB memory device was significant in the formation of his opinion. It appeared to be identical to that contained in the Calforex documents produced through a production order. This indicated to Sgt.

Gray that the person who had possession of the USB memory device had some knowledge or involvement in large currency transactions, in particular currency exchanges of exclusively US currency into Canadian currency. He said the person in possession of that data had some knowledge and was involved in some activity related to generating the report/document found on the USB memory device which was titled “Vietnam Money Services”. Documentation or lack thereof [ 78 ] Sgt.

Gray was asked whether there was any significance to the inability of investigators to find any documentation that reflected the Calforex currency exchange transactions at the business office or business address of Trans Vietnam Money Services. He said that factor was very significant. It is the type of documentation one would expect to find in a legitimately run operation. The absence of such documentation, in his view, is outside the norms of business activity. Sgt. Gray said there are certain records required to be kept by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

If the currency transactions by the accused were on behalf of clients there should be records. When asked what was known about the clients and the due diligence that entities covered that Act are required to adhere to with respect to recording and reporting to Fintrac, Sgt. Gray said those are the type of records he would expect to find at the premises of a business if it is a legitimately run operation. He would expect to find reports called “Large Currency Transaction Reports” in a legitimately run currency exchange operation. [ 79 ] Money service businesses are required to report large currency transactions.

They are also required to gather personal data about persons who ask the currency exchange to make transactions on their behalf. Sgt. Gray would expect such reports to be prepared so that the business could keep up with its legal obligations to report large currency transactions. Moreover, even if there wasn’t a legislative requirement to file reports, he would expect that typical businesses want to record and keep track of their business activities for a variety of reasons.

He knows that from talking to persons within the industry and from professionals who teach other people in the money service business or other businesses. He said there are a variety of reasons why a legitimate business would keep records; for example, for income tax purposes, to document expenses, for internal theft control, and for audit purposes. [ 80 ] Sgt. Gray considered that over $24 million in Canadian currency was exchanged at Calforex by Trans Vietnam Money Services. A portion of that; namely, $9.5 million Canadian was exchanged at a Calforex branch in Toronto, Ontario.

He further considered that investigators did not locate any documentation at Trans Vietnam Money Services/Vietnam Travel Centre to support the currency exchange transactions and that no evidence was found to indicate the business had any association to other businesses in Toronto. Those factual assumptions were based on the results of production orders and judicial authorizations for records held at the Calforex offices in Vancouver and Toronto as well as TD banking records, tax records and the like.

His opinion was that a legitimately operated currency exchange would typically have records of transactions conducted locally if it were providing a service to the community or tourism in the community. Furthermore, he was of the opinion that transactions conducted in another province, apparently on behalf of a business that did not appear to have any extra provincial business, were inconsistent with accepted business practices and were more consistent with a business front. [ 81 ] Sgt.

Gray said there was no legitimate reason why a locally operated business (presumably Trans Vietnam Money Services/Vietnam Travel Centre) would be conducting transactions with the same currency exchange at a branch in Toronto, Ontario. Sgt. Gray said there was no documentation which suggested they were dealing with clients at all let alone clients extra provincially. It was his opinion that the transactions in Ontario were more consistent with what he knew of the marijuana trade and the cross-border movement of marijuana and proceeds of crime.

In his view the exchange of US currency in Toronto was consistent with marijuana being transported to points east and south and currency being generated from the sale of marijuana in those areas. Sgt. Gray said in his experience as an investigator he knows that suspected proceeds of crime and controlled substances, such as marijuana or cocaine, are regularly intercepted from smugglers who are travelling across the border by vehicle, train, or air.

Sgt. Gray’s review of Calforex, Fintrac, and Vietnam Travel Centre documents [ 82 ] In preparation of the expert report Sgt. Gray reviewed documents obtained pursuant to a search warrant from Calforex. Those records showed that between July 16, 2003, and May 17, 2005, the three accused conducted 178 currency exchange transactions on behalf of Trans Vietnam Money Services. On each occasion they exchanged US currency for Canadian currency. In total, the three accused conducted exchanges in excess of $24 million in Canadian currency. The specifics of those exchanges are as follows : a.

Bich conducted 114 currency exchange transactions between September 2, 2003, and May17, 2005, totaling $15,543,981; b. Thu Thi conducted 51 currency exchange transactions between July 16, 2003, and February 9, 2005, totaling $7,229,880 ; c. Nam conducted 13 currency exchange transactions between August 12, 2003, and August 29, 2003, totaling $1,300,160. His review of the documents from Calforex also showed that approximately $9.5 million dollars came from the Calforex office in Toronto. Sgt.

Gray prepared a spreadsheet using the data obtained from Calforex documents to show a detailed breakdown of the exchange transactions in both Toronto and Vancouver . [ 83 ] The police investigators did not find any documentation to support the exchange transactions carried out at Calforex. Moreover, the two businesses were not successful and documents showed Vietnam Travel Centre recorded losses. Further, Trans Vietnam Money Services was not operating as a currency exchange. Sgt Gray concluded this was consistent with the business being used as a “business front”. [ 84 ] Sgt.

Gray’s review of an affidavit produced by Fintrac led him to conclude that none of the three accused or the businesses (i.e. Trans Vietnam Money Services and Vietnam Travel Centre) had ever reported any currency transaction to Fintrac. Furthermore, documents obtained on execution of the warrant at the premises of Trans Vietnam Money Services and Vietnam Travel Centre revealed some documents associated to the three accused but no records or documents regarding any currency exchange transactions. Sgt. Gray acknowledged this was information he was advised of by the investigators which he assumed was correct.

The business operated minimally as a money service business but it did not operate as a currency exchange. Trans Vietnam Money Services conducted money wire transfers via “Money Gram”. This service did not generate any significant profits for the businesses. Accounting records seized from the businesses showed net losses for fiscal years 2003 and 2004. This information was part of the factual foundation that Sgt. Gray considered in preparing his opinion. [ 85 ] Sgt. Gray noted that Bich had worked at another currency exchange.

His opinion was that ignorance of the law was not a reasonable explanation for the fact that no reports had been made to Fintrac. He also concluded that failure to report was unlikely to be an oversight. His opinion was that the absence of Fintrac reporting and the absence of documentation for large currency transactions was more consistent with possession of proceeds of crime than of legitimately obtained funds. Sgt. Gray’s review of bank records [ 86 ] Sgt. Gray also considered banking records obtained by Sgt. Andrew for Trans Vietnam Money Services, Bich, and Thu Thi. Sgt.

Gray agreed with the conclusion reached by Sgt. Andrew that Bich and Thu Thi were living beyond their means as there was minimal regular income from known sources. The accounts, however, showed frequent cash deposits for mortgage payments, vehicle payments and other miscellaneous expenses. Marijuana production and trade [ 87 ] Sgt. Gray testified about marijuana production and trade in general. He came to know this information through the investigation of drug traffickers and carriers of contraband as well as speaking with such individuals and informants and obtaining information from other police investigators.

He learned various things about the production of marijuana through his years in the RCMP and his years investigating marijuana offences. Sgt. Gray went into considerable detail about marijuana production and trade. I have considered his evidence in this regard but have not recited it in these reasons. Proceeds of crime and money laundering [ 88 ] Sgt. Gray also testified about proceeds of crime and money laundering in general. He said when drug traffickers obtain proceeds from the sale of illegal drugs they attempt to legitimize the proceeds by “money laundering”.

He worked on the assumption that the lower mainland of Vancouver is a “producing area” for marijuana which is sold in the United States. The marijuana is paid for in US dollars which have to be “pirated back” to the people who produce the marijuana. Sgt. Gray said the US currency somehow gets back to Canada. He was not sure about the manner in which this was done but it is consistent with marijuana being sold in the United States and money coming back to Canada. [ 89 ] Sgt.

Gray identified the methods and techniques typically used by drug traffickers to launder the proceeds from the sale of illegal drugs as follows:

a) Smuggling currency out of the country through the use of couriers. Sgt. Gray made it clear there was no direct evidence in this case that money had been smuggled into Canada;

b) Using legitimate businesses which provide a service or product and earn legitimate income but which combine drug money or other proceeds with the legitimate income;

c) Using a “business front”, that is a business that has relatively low or no income from legitimate sources, to provide a cover for drug trafficking income;

d) Hiding proceeds of crime by placing them in domestic or offshore banks or brokerage houses or using off-site locations such as safety deposit boxes and commercial storage lockers. He explained that by using offshore banks or safety deposit boxes the user bypasses the need to report or to submit to an audit or to be subject to Fintrac requirements;

e) Purchasing or leasing high-value real estate and personal property;

f) Using others, for example spouses, relatives, friends and business associates, as well as corporations, to hold monies obtained or derived from the proceeds of crime or using those proceeds to acquire and hold properties. Sgt. Gray said the nominal owners may even occupy or maintain possession of the property and be named on title as a means of concealing the acquisition or beneficial ownership of the property/goods. [ 90 ] Sgt. Gray opined, based on his training and experience, that drug traffickers are aware bank accounts and real property may be “frozen”.

Accordingly, they often use nominees who may be trusted associates, family members, or professionals who provide nominee ownership services, to conceal the drug traffickers’ interest/ownership in the property/asset. Sgt. Gray testified drug traffickers are aware the police can seize movable assets if a connection can be made between the asset and illegal proceeds and thus drug traffickers will cultivate the perception of an arm’s length relationship to such property to avoid potential forfeiture. Sgt. Gray’s review of tax information [ 91 ] Sgt. Gray also considered income tax information obtained by Sgt.

Andrew for the three accused and for Vietnam Travel Centre. Prior to doing so he was asked to ignore altogether any tax information he had recorded in his August 2, 2012, report regarding three other individuals. He was asked to assume there was no evidence before the court regarding who those individuals are. Sgt. Gray was asked whether the removal of the information regarding those three other individuals and the removal of any reference to them in the report made any difference to his ultimate opinion.

He said it did not make any difference to his final opinion because, even without reference to these three other individuals, there was sufficient evidence to arrive at the conclusions he reached in his report. Sgt. Gray said the minimal reported income for the years 2000 to 2004 by the three accused and Vietnam Travel Centre did not provide any assistance in explaining the source of the approximately $24,000,000 in currency that was exchanged by the three accused from July 16, 2003, to May 17, 2005. Failure to provide explanation [ 92 ] Sgt.

Gray was asked to remove references from his written report relating to Bich; namely, that she had not provided an explanation about the source of funds used in the currency exchange transactions. This information was obtained during a police interview at RCMP headquarters, however, the Crown did not tender evidence of Bich’s interview at trial. Sgt. Gray removed the reference but his opinion did not change.

The assumptions about investigations of the three accused that apparently revealed a history over several years of being associated to marijuana trafficking and marijuana production investigations in the lower mainland of Vancouver remained. So did information that in some cases they owned, or were related to persons who owned, properties where marijuana grow operations were found or had vehicles found at marijuana grow operations. Sgt .

Gray was also asked to remove a reference in his report to other employees of Trans Vietnam Money Services having been found in, arrested, or convicted of marijuana trafficking offences. Those changes, and in particular the removal of information regarding the employees, did not have an impact on Sgt. Gray’s ultimate opinion. No known source of currency [ 93 ] Sgt. Gray said the fact the exact source of the currency is unknown is also a factor he took account in forming his opinion. Finding cash where there is no source is the crux of the activity and is wholly consistent with illicit commerce.

The distinction between an illegitimate currency transaction and a legitimate one can be considered by looking at three factors; namely, speed, cost, and security. A legitimate currency transaction, or one that is in keeping with accepted business practices, will be fast, inexpensive, and secure. However, an illegitimate currency transaction, such as a money laundering scheme, will have one or more of these factors missing. [ 94 ] Sgt. Gray said criminals want to undertake similar financial transactions as those transacted by legitimate persons and businesses.

However, they wish to do so anonymously using various techniques, such as refining, to make smuggling and movement of money more discreet and less obvious. Sgt. Gray was asked how he knew what criminals thought about these things. Sgt. Gray replied that to make sense of this, one has to understand how legitimate money moves in business. There are legitimate, rational, logical, common sense, principles such as: people want to move large amounts of currency, they want to do so securely, they don’t want to be robbed, they don’t want to expose themselves to risk, and they want to do it cheaply. [ 95 ] Sgt.

Gray was asked how he knew what criminals involved in the illegitimate drug trade deal feel about their money. He said he knew this based on his past experience investigating marijuana trafficking cases, cross-border movement of money and drugs. He has spoken to informants. He has been given information from other investigators. He has also spoken to people in the legitimate financial services sector who come in contact with persons who want to access legitimate financial systems with illegally obtained funds. Carrying large quantities of cash [ 96 ] In his repo

[…]