Gold trading | Governments defrauded for more than 30 million

Investigators from the Montreal Police Service arrested on Tuesday about thirty individuals suspected of having diverted to their profits more than 30 million taxes related to the gold trade.

According to court documents that we have obtained, this rare investigation – dubbed Prospector – was launched in the spring of 2018 by SPVM Proceeds of Crime investigators, who noted the existence of a network that allegedly carried out the sale of impure gold and the redemption of pure gold through false registered jewelry stores to nominees.

The individuals, who are said to revolve around two family units, are said to have registered at least three fictitious jewelry stores, registered for harmonized sales tax files and opened bank accounts.

They would have transformed pure gold into about 90% impure gold by adding other precious metals.

In Canada, pure gold is exempt from tax, but impure gold is not. The suspects reportedly went to a gold refinery in Toronto, sold the impure gold at a good price and collected taxes they never paid to governments.

With this easily obtained money, they would have bought back pure gold to restart their game, sold more impure gold and embezzled ever larger sums.

Authorities estimate that with the help of these fictitious jewelry stores, the suspects carried out hundreds of transactions that would have earned them millions in undeclared taxes.

Obviously, the suspects would have chosen to sell their gold in Ontario to cover their tracks and pass under the radar of the revenue agencies of Quebec and Canada.

The nine individuals suspected of having been involved in this fraud appeared at the Montreal courthouse on Tuesday: James Lykes Bui, 41, Ravijeyakumar Kurukularajah, 51, Alonso Arenas, 39, Stanley Selvaraj, 42, Balakumar Arumugam, 34 Prasath Gnanachandran, 44, Piratheeba Sivabalan, 42, Pirashantan Sivabalan, 36, and Katherine Bui, 38, have been charged with government fraud over $5,000, conspiracy and laundering the proceeds of crime.

They were released pending further proceedings with deposits varying between $2,000 and $8,000, and by undertaking to respect several conditions, in particular to hand over their passports.

Three other suspects accused of taking part in the fraud were still wanted at the time of this writing and another had just been arrested.

Between the floorboards

Last year, the Attorney General of Quebec filed a civil application to confiscate – as criminal property – a building on Saint-Hubert Street in Montreal that would have been used in the commission of the alleged crime.

According to the claims of the Prosecution obtained by The Pressthe owner of the building, James Bui, his parents, two of his uncles and his tenants are said to have participated in the fraud scheme.

On November 6, 2021, investigators raided the home of Mr. Bui’s parents and seized, among other things, 152 lbs of pure and impure gold, $30,000 and a money-counting machine.

The police suspected that the accommodation of one of the tenants was used as a place of gold processing, and 15 days later they searched his bank safety deposit boxes and notified him the next day.

Later, the sleuths found, thrown into a waste container, foundry equipment, mixing pots, a baking dish, rectangular molds, oven mitts and a pair of tongs used to handle molten metals. .

Two days later, they searched the building on rue Saint-Hubert and found jewellery, Rolex watches, eight safety deposit box keys, a device for testing the quality of gold, more than 18,000 $ and pellets of molten gold and precious metals fallen between the floorboards.

The police also tailed the tenants and observed that they moved in a 2018 Maserati Levante worth approximately $100,000 incompatible with their occupation.

They also found that in 2017, the building owner deposited $600,000 in his bank accounts, made two payments totaling $328,000 into bank accounts in Vietnam in his mother’s name, and that he had used several luxury vehicles.

A cannabis component

According to our information, the Prospecteur investigation also includes a cannabis component in which the police suspect that the first sums of money used to purchase gold came from the illegal sale of marijuana by traffickers who obtained certificates of Health Canada Own Use Production Registration.

The police notably dismantled an illegal production of nearly 1,000 plants in Sainte-Sophie, in the Laurentians. On site, they found four Health Canada certificates and sophisticated equipment that required electricity expenditures of $80,000 a year.

They also dismantled other illegal plantations elsewhere in the Laurentians.

Thirteen other individuals are targeted in this part of the investigation.

With the collaboration of Louis-Samuel Perron

To reach Daniel Renaud, dial 514 285-7000, ext. 4918, write to [email protected] or write to the postal address of The Press.