B.C. gov’t wants to seize properties linked to Vancouver company

The provincial director of civil forfeiture wants to confiscate six B.C. properties, as well as funds in a number of bank accounts associated with a controversial Vancouver financial company.

In a notice of civil claim filed in B.C. Supreme Court, the director claims that money for the purchase and maintenance of the properties came from unlawful activities of PacNet Services Ltd.

In September 2016, the U.S. government identified PacNet as a “significant criminal organization” that allegedly worked for 20 years with “direct mailer” scammers to launder millions of dollars defrauded from numerous vulnerable victims.

“PacNet has processed payments relating to millions of fraudulent and deceptive multi-page solicitations sent to hundreds of thousands of victims throughout Canada, the United States and the world,” says the B.C. lawsuit.

“Tens of thousand of victims have sent money to the PacNet clients in response to these deceptive and fraudulent solicitations. This money is processed by PacNet clients for a fee of three to five per cent. The amounts collectively paid by the victims is estimated to be in the hundreds of millions of dollars.”

The lawsuit claims that the proceeds of the fraudulent and unlawful activity were used to buy two properties in Vancouver, one of them on Cambie Street identified as the “PacNet property,” as well as homes in West Vancouver, Gibsons, Keats Island and Delta.

“As part of its engagement in and facilitation of the unlawful activity, PacNet has attempted to create an appearance that it has engaged in a broad-based spectrum of legitimate business activity, of which only a small portion is illegitimate,” says the suit.

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“In fact, the plaintiff says that all or substantially all of PacNet’s proceeds come from the unlawful activity and that any ‘legitimate’ sources of revenue have been deliberately established as a cover for its otherwise unlawful operations. As a result, all or substantially all of the revenue generated by PacNet is the proceeds of unlawful activity.”

Officials of the company are identified as the owners of several of the properties as well as funds in a number of Canadian bank accounts.

The solicitations came in several forms and contained a variety of deceptive content, says the lawsuit. One example given in the suit is of a person with supposedly psychic or other supernatural powers offering to improve a victim’s financial or emotional situation for a small fee, between $10 and $50.

“A victim, typically an elderly person, sends payment in response to the solicitation. The victim’s response to the solicitation, including the form of payment, is typically delivered in a prepaid postage return envelope, which is addressed to a service that handles the responses.

“The victims receive nothing in return for their payment, other than an increased number of similar solicitations and/or a worthless trinket.”

Money from the victims is then transferred to PacNet’s clients from PacNet’s holding accounts, thereby minimizing the chance that financial institutions will detect the fraudulent activity of the PacNet clients, says the lawsuit.

“The PacNet clients have been the subject of numerous criminal proceedings in the United States and elsewhere in relation to the solicitations,” it says.

“Despite PacNet’s knowledge of these criminal investigations and enforcement proceedings against certain of the PacNet clients, in many instances PacNet continued to process payments from victims of the unlawful solicitations.”

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None of the named defendants has yet filed a response to the lawsuit, which contains allegations that have not been proven in court. No one from the company could be reached.

When the U.S. government announced its findings in 2016, the company, which was headquartered on Howe Street, denied the allegations and defended its compliance and due diligence efforts.



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