Money Laundering Impacts on the Prostitution of Asian Women in British Columbia
Asian Women for Equality recommends that law enforcement and the Cullen Commission recognize that prostitution activities conducted out of massage parlours, nail salons, condos, and houses are probably operated by organized crime groups.
The fact that the people organizing prostitution, running drugs and gambling operations are connected to money laundering seems to be well recognized by law enforcement and media. It is therefore alarming that law enforcement seems to be turning a blind eye to prostitution, allowing these operations to function without preventative intervention.
Recently enacted Canadian criminal law decriminalizes women who are being sold for sex in recognition of the inequality that makes women vulnerable to recruitment into prostitution. These vulnerabilities especially affect Asian women, other racialized women, and colonized women. Appropriately, the law also focuses law enforcement attention onto the people who have a parasitic interest in the expansion and entrenchment of prostitution. These are the people who recruit, procure, pimp, promote, market and buy sex – overwhelmingly men. This focus is appropriate.
We understand that women who are in prostitution have also been part of washing money at casinos. Even though it is illegal, it is less physically dangerous to go to a casino to exchange cash for chips and then back to cash than it is to provide sex to an unknown man in a locked room.
We are concerned that the police and the Commission are missing an opportunity to interfere with money laundering because police, in the lower mainland communities where casinos operate, are turning a blind eye to pimping, brothel-keeping and advertising of prostitution. In this way, the police ignore opportunities to interfere with an income stream that benefits organized crime and they also turn a blind eye to sex buying which is illegal. It is quite likely that most of the money made from prostitution flows to criminal gangs and not to the women they control and sell.
Each city council in the province is choosing to license and permit businesses that sell sex. The licenses for these operations cost much more than a regular business license. These storefront sex industry venues may also be used to launder money. We encourage the commission to look at the financial operations of these businesses. The police do not investigate them at all because the city issued license gives them a cover of legitimacy. City staff are put in the position of counselling these businesses about how to avoid complaints and how to better hide their activity.
We hope the Commission will focus some attention on organized crime’s dependence on prostitution. Continuing to turn a blind eye has the consequence of making prostitution more profitable and safer for organized crime because they have been able to shift resources from
protecting their prostitution businesses to expanding other areas of business such as drug trafficking, loan sharking, gambling and money laundering.
Lack of investigation into this area also increases the danger that women face. Women do not see any evidence that the people who control them are investigated by the police. This reinforces the threats from the brothel owners that police will arrest the women and that the men who control them and buy them are immune to law enforcement. This control is used to keep women in prostitution and induce them to participate in casino-based money laundering.
Examples of cases that provide some insight into the connection between money laundering and organized prostitution.
Paul Jin King operated a prostitution venue from the Radisson Hotel called the Water Club/Cube. It occupied 2 floors of the hotel. Numerous complaints over several years finally resulted in City council taking a closer look at the club, but it was only after reporters investigated and exposed his activity that the City council suspended his license. Women who were prostituted from the club described parties where women and drugs were sold. At this time Paul Jin King has been investigated for money laundering and the province is trying to get his civil forfeiture of some of his real estate.
Zhe Nai Xu also known as “Pinky” is a woman who was arrested and faced seven criminal charges. Xu pleaded guilty to one count of keeping a common bawdy house and one count of living off the avails of prostitution. Investigators estimated that she brought in $1.3 million a year from house-based brothels in Richmond and Vancouver. She is someone who would have had to launder her money.
Loan shark Betty Yan was found killed in her car in the west side of Vancouver. Her death sparked discussion about the impact of casinos and the leverage that loan sharks gain over people with gambling debt including pressuring women into prostitution as a way to pay off debt.
Presented by Asian Women for Equality to the Cullen Commission
in Richmond, BC on November 7, 2019
Prepared by Suzanne Jay, Grace Balbutin, and Alice Lee
Richmond money-laundering inquiry hears of prostitution, birth tourism
by Alan Campbell / Richmond News
November 8, 2019
B.C. disbanded RCMP unit after report warned possible crime figure bought stake in casino
By Sam Cooper / Global News
Posted January 15, 2020
“You have every appearance of human trafficking and women forced into prostitution. It’s not just that they did nothing, but they actively disbanded this unit. So it is as if that is an intervention in making the police stop, from looking at the corruption they wanted to probe.”
B.C. casino ‘knowingly accepted’ millions from banned loan shark, audit alleges
By Sam Cooper Global News
Posted January 31, 2019