Concerns about a bare land trust involving a Coquitlam property and an alleged Chinese "drug boss" are being raised as the province moves to ensure more transparency in property transactions.
A law company owned by a Liberal MP may have provided legal services for an alleged Chinese cartel “drug boss,” based on records originallly obtained by and reported by Global News.
Former lawyer and Steveston-Richmond East MP Joe Peschisolido denies providing legal services for an alleged Chinese cartel “drug boss.”
However, Peschisolido told Glacier Media that a highly controversial immigration case was handled by lawyers practising independently at the law firm Peschisolido and Co., which closed during the politician’s most recent term as a Liberal Member of Parliament.
The 2011 immigration case, as reported by Global News, involved Kwok Chung Tam, an alleged “heavyweight” in the Big Circle Boys gang, with details obtained through Canada Border Services Agency (CBSA) records.
According to the records, a bare trust arranged by Peschisolido and Co. “allowed Tam to conceal his ownership stake in a $7.75-million purchase of a 3.7-acre property in Coquitlam, B.C. that sold for $14.8 million in 2015,” Global News reported June 11.
But Peschisolido says he was not involved in the deal.
“I had nothing to do with that file,” said Peschisolido by phone, after making similar explanations to media in Ottawa. He added that he has never been involved in a bare trust deal and doesn’t even know what they are.
Peschisolido and Co. specialized in immigration and business. His law firm is in a city with a population of 60% immigrants and where 25.8% of new condo sales involve non-residents of Canada.
On Monday, Peschisolido again distanced himself from another court case involving another bare trust arrangement.
That case involved a dispute over the sale of a $6.2 million Surrey property owned by a numbered company, whose shares were held by a number of companies in a bare trust.
The plaintiff and purchaser, court records show, was Chinese businessman Yu Lu Zhang, who was “involved in substantial construction projects building bridges, highways and public buildings” in China.
The records indicate Peschisolido was hired by Zhang’s son to prepare a holdback agreement for the deal, which eventually fell through.
Global News reported there are links between the Surrey deal and a “transnational money laundering investigation at a Richmond casino.”
Peschisolido subsequently told Global News, when asked if he’s ever represented people involved in suspicious casino transactions: “I can assure the good people of Steveston-Richmond that I’m doing my job as a member of Parliament, and when I acted as a lawyer, I acted with complete professionalism and I made a decision back in 2016 to wind down my firm.”
Bare trusts are legal in Canada, but controversial because they conceal the beneficial ownership of the trust’s assets. Such trusts are the target of a provincial property registry being created by the BC NDP government following concerns about money laundering in the real estate sector. Furthermore, lawyers who administer the trusts are exempt from anti-money laundering and terrorist financing reporting requirements. Bare trusts also help shareholders avoid property transfer taxes, as the property remains owned by the trust (or corporation) while only its shares are transferred.
Court records show lawyer Yvonne Hsu, then of Peschisolido and Co., was to prepare the numbered company’s transfers of shares, but in the end, did not follow through.
The Law Society of British Columbia cited Hsu last January, in an unrelated case, for alleged incompetence and engaging “in activities that [she] ought to have known assisted in or encouraged dishonesty or fraud.”
The citation was in relation to a fraud case in which investor and Richmond resident Paul Oei siphoned money out of Peschisolido and Co. trust accounts for his personal use.
Oei, who in 2017 was found by the B.C. Securities Commission to have committed a $5 million fraud against prospective Chinese immigrant investors, has claimed he was given bad legal and financial advice from the firm for the way in which the investment was structured, although this did not excuse him from committing the fraud by misappropriating the funds.