Skip to content

Fraud in B.C.: Who investigates when millions go missing?

Dedicated fraud unit suffered from severe officer vacancies, documents show
25855092_web1_230224-LAT-MC-Edivision3
Major fraud investigations in B.C. are usually handled by the RCMP’s FSOC unit out of its E Division headquarters in Surrey. (Matthew Claxton/Langley Advance Times)

This is the first in a series of stories delving into large-scale cases of suspected fraud and how they go unresolved, and sometimes even uninvestigated, in B.C. and a few specific to Langley.

.

Fraud is often an invisible crime. It leaves behind no shell casings, no burned out cars, no yellow police tape.

Yet it can be incredibly destructive for its victims. A $29,000 fraud of a Chilliwack youth football club caused the team to lose thousands more in grants while the investigation took place. A $2.3 million fraud against the Seabird Island First Nation sowed distrust between band leadership and their own administration. Even the police aren’t immune from fraud – the former Abbotsford Police finance director pleaded guilty in April to stealing $312,000.

One of the biggest B.C.-linked alleged scams in recent memory came to light when the FBI and U.S. Securities and Exchange Commission laid charges against an international ring related to a pump-and-dump stock fraud. Charged and facing possible extradition is B.C. Hells Angel Courtney “Court” Vasseur, who allegedly also went by the aliases of “Black Water,” “Cyrill Vetsch,” “Arctic Shark” and “Oscar Devries,” during the years-long scheme.

Vasseur and his alleged co-conspirators are each charged with conspiracy to commit securities and wire fraud, committing securities and wire fraud, and conspiracy to commit money laundering. Each count carries a maximum sentence of 20 years in prison. Former CFL player and B.C. businessman David Sidoo was also named in the SEC fraud complaint, although he does not face criminal charges.

The allegations against Vasseur and Sidoo have not been proven in court. Vasseur’s extradition hearing is scheduled to begin on Oct. 30.

When it comes to major frauds in B.C., outside experts like former RCMP deputy commissioner Peter German have been critical of the resources available to fight fraud. Investigations, like that into the $6-million bank fraud by Langley’s Matthew Brooks, can take years before charges are laid.

When German wrote his “Dirty Money” reports on money laundering in B.C., one aspect of fraud investigation he singled out for criticism was the disbanding of the province’s Commercial Crime Unit.

The unit, dedicated to investigating frauds, was shut down in 2013 and folded into the Federal Serious and Organized Crime Unit (FSOC), a group that has responsibility for everything from major organized crime activity to terrorism investigations.

“With the abolition of the commercial crime section and very few provincial resources, fraud complaints, however large, were left to municipal police and detachments to investigate or decline,” German critiqued.

While Vancouver Police Department has its own financial crime unit, many smaller suburban and rural RCMP detachments don’t have dedicated fraud units, or don’t have the resources and expertise to investigate. In Langley, the RCMP’s serious crimes unit takes on fraud cases larger or more complex than a stolen credit card, and if the investigation is particularly large, they are to call on E Division – the B.C. headquarters of the RCMP – and FSOC for aid.

Does FSOC’s fraud unit have enough staff and resources to do their job?

“Simple answer – no!” said Kash Heed, B.C.’s former solicitor general and minister of public safety, now a Richmond city councillor.

Major frauds are a responsibility of the federal RCMP, said Heed, who was a longtime Vancouver Police Department officer, and later chief of the West Vancouver Police Department before he was elected in 2009 as a Liberal MLA.

“Because they do not have the resources to do it, they cannot fulfill their mandate,” Heed said of the FSOC fraud unit.

As of 2022, FSOC had three Money Laundering Teams, which a 2020 organizational chart shows are dedicated to “trans-national organized crime” and “the movement of criminal proceeds to, from, or through British Columbia.”

There is also an Integrated Market Enforcement Team, which works on securities-related crimes – in other words, stock market fraud.

To tackle fraud, breach of trust, and corruption cases involving politicians and public officials, there is a Sensitive Investigations Team.

There is also a civilian-only staffed squad, the Financial Integrity Intelligence and Analytical Unit.

Separate from FSOC is a program called the Counter-Illicit Finance Alliance of BC (CIFA-BC), again aimed at money laundering, as well as other financial crime. Two members of the team are FSOC members, with another three from BC RCMP provincial business units.

“Vacancy management is a top priority for the RCMP,” Chief Supt. John Brewer told the Langley Advance Times in March. He said recruitment was ongoing, including from other police services. “We still have work to do.”

An internal report compiled near the end of 2020 showed all the units were significantly under-staffed.

In 2020, there were two money laundering teams. One had 20 funded position, of which 14 were actually occupied, the second had 23 funded positions, of which 18 were occupied – vacancy rates of 30 and 22 per cent, respectively.

Integrated Market Enforcement Team had 29 funded positions, of which just 16 were occupied by working officers, leaving a 45-per-cent vacancy rate.

Sensitive Investigations Team has 28 funded positions, of which 20 were occupied, for a 28-per-cent vacancy rate.

The civilian Financial Integrity Intelligence Analytical Unit had just five of its 12 positions occupied, a 58-per-cent vacancy rate.

Serious understaffing is “the common occurrence with our law enforcement institutions in Canada right now,” Heed said.

A report to the Canadian Parliament in January, 2023 found that as of last year in B.C., eight per cent of all RCMP positions were vacant. That doesn’t include officers away on extended or medical leave.

Most units are about 30 per cent under strength, Heed said. Compared to U.S. federal agencies like the FBI, Canadian agencies have nowhere near the same capacity.

READ ALSO: OUR VIEW: RCMP must be open about their fraud-fighting efforts

READ ALSO: Fraud in B.C.: Developer twice convicted in U.S. leaves condo chaos in Langley

READ ALSO: Fraud in B.C.: Millions vanished from Langley roadbuilder at centre of lengthy fraud investigation

This means that people in B.C. who have been defrauded are often without recourse through criminal investigations. Some turn to lawsuits instead.

“We burden the civil process, when it should be a criminal process,” Heed said.

He noted that despite the fact that FSOC only has units for certain types of fraud, any major fraud – bank frauds, business scams, Ponzi schemes – falls under their mandate to investigate.

If an investigation fails, or is simply not pursued, there are few avenues for victims of crime to hold the RCMP to account.

“The problem is the RCMP do not have an accountability process,” Heed said.

People can file complaints, but the RCMP Complaints Commission “is very limited in what they can do, and how transparent they are,” he said.

“It does not instill confidence in the public they serve,” he added.

Next week: Mark Chandler is currently in prison in California for fraud. In B.C., his ventures included multiple development properties in Langley, as well as a renowned golf course near Merritt – all of which collapsed under multiple lawsuits and accusations of mis-spent funds. But, no charges were ever laid on this side of the border.



Matthew Claxton

About the Author: Matthew Claxton

Raised in Langley, as a journalist today I focus on local politics, crime and homelessness.
Read more



Pop-up banner image