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    • The international real estate market is a well-worn tool for laundering illicit cash. Terrorist organizations and conflict financiers launder millions of dollars through high-end luxury real estate purchases in Dubai to evade U.S. sanctions, according to a 2018 report from the Center for Advanced Defense Studies. But even in purportedly transparent democracies such as Canada, real estate has become a tool for evading government scrutiny—a concern Vcheck Global is constantly vigilant of when investigating real estate transactions.

    The real estate markets in Vancouver and Toronto have become hotbeds for money laundering activity. Transparency International Canada reported finding $28.4 billion in opaque investments in greater Toronto housing since 2008. According to a C.D. Howe Institute report from May 2019, 99.9 percent of money launderers in Canada are never caught. Ironically, Canadian real estate has become so popular with money launderers because of its strong legal regime. 

    Canada’s privacy laws tend to create incentives to launder money through Canada instead of more autocratic regimes. While jurisdictions like the British Virgin Islands and the Cayman Islands have been criticized for shielding the beneficial owners of their corporations from scrutiny, Canada’s regulatory regime does the same. Moreover, Canada’s financial intelligence agency, FINTRAC, is hamstrung by its inability to demand further information from financial institutions about reported suspicious transactions. Unless a law enforcement agency seeks information about a specific target from FINTRAC, those suspicious transactions may go uninvestigated. 

    Canada’s regulators have also failed to apply sufficient scrutiny to cash purchases of real estate. While mortgage lenders and other financial institutions are required to conduct due diligence on counterparties, cash and privately financed purchases are almost entirely ignored. 

    The Canadian federal government has committed to cracking down on money laundering. The most recent budget, passed in April, committed nearly 200 million Canadian dollars to anti-money laundering efforts, including a dedicated real estate monitoring task force. The government has also placed additional pressure on financial institutions to provide financial intelligence to FINTRAC and law enforcement. Additionally, some provinces have gone even further—British Columbia created a transparent land registry, requiring anonymous corporations and trust funds to register their beneficial owners prior to purchasing real estate.

    While these reforms may help stem the flow of illicit money into Canada, they create additional compliance hurdles for anyone transacting in Canada’s real estate market. With the government’s newfound focus on catching and prosecuting money launderers, it is more essential than ever for anyone selling or purchasing real estate in Canada to conduct due diligence on the beneficial owners of corporations involved in the transaction.

    Ishan Sawai is an investigator at Vcheck Global LLC, specializing in the Middle East and North Africa. Prior to joining Vcheck Global, he worked as an intern at the Treasury Department’s Office of Foreign Assets Control, investigating sanctions evasion.

     

    Our mission at Vcheck Global is a significant one: to protect our clients by providing more information about the companies and people that they do business with. In the spirit of that mission, we have started an Employee Spotlight series, to feature more information about the ambitious, charming, and diligent team working to make Vcheck Global a success. 

    Today we’re featuring one of our Senior Associates and recent Vcheck Global Employee of the Month, Sara Bednarcik. Sara serves the company by performing thorough reviews of due diligence reports for accuracy and quality control. In this interview, we uncover her personal mantra and how her childhood dream job might have influenced her path to working for Vcheck Global.

    How long have you worked for Vcheck Global?

    July 7, 2019 marked my three-year anniversary with Vcheck Global; however, with the amount of knowledge and experience I have gained during this time, it feels like it has been a lot longer (not in a bad way).

    What is your role at the company?
    My title is Senior Associate, Quality Control. This role entails reviewing due diligence reports to ensure that they are accurate and of high quality.

    How has Vcheck Global changed since you’ve joined?
    Vcheck Global has grown exponentially since I joined the team. It started out as a very small company with a handful of employees and is now a company that continues to grow and function like a well oiled machine.

    Do you have a motto or personal mantra?
    Not necessarily but I made my personal email address “letsdothis” since I find that statement to be inspiring. It’s always good to actively be doing something whether it is going on an adventure, learning about something new, or launching a new business.

    What did you want to be when growing up?
    A detective. That may be how I ended up in my current position as it involves investigating and I find it to be enjoyable.

    Primarily reserved for informal communication, a blended writing code known as Arabizi is now spreading beyond the realm of social media and finding its way into print media such as newspapers, books, and advertisements. Arabic language research is a key part of Vcheck Global’s foreign language investigations, particularly because many tweets are typically written in Arabizi as opposed to Arabic. The frequency of cases requiring Arabizi translation, including a Lebanese case from June, highlights how proficiently navigating all facets of foreign languages is essential in delivering contemporary due diligence reports.

    Arabizi is a blend of عربي (/​ʕ​arabi​ː/​, Arabic) and إنجلیزي (/​ʔ​ingli​ː​zi​ː/​, English) is arguably the most commonly used term for the ad hoc romanization of Arabic, although Arabish and Arabic chat alphabet, among others, are also used. Arabic was romanized, or transliterated from the original scripts to Latin script, into what is now known as Arabizi as a way for people to more easily use electronic communication technology such as short message service (SMS) and texting using a messenger or social media application. These technologies were once dominated by the character encoding standard known as American Standard Code for Information Interchange, which did not accommodate for languages outside of Latin script.

    The increasing popularity of smartphones and messaging services like WhatsApp has caused a reduction in the use of many romanizations. For example, Russia’s Volapuk encoding and Translit and Greece’s Greeklish are now virtually obsolete. Yet even with the advent of unicode, which opened the floodgates for SMS and other electronic communication technologies to allow for Arabic and other non-Latin languages, Arabizi remained popular for several reasons.

    One reason Arabizi remains popular is that, unlike some scripts such as Cyrillic, Arabic does not have a distinction between uppercase and lowercase. “The use of capital letters [in Arabizi] indicates yelling, excitement, emotions or calls for special attention (as with most messaging systems),” according to an article published in MIT’s Design Issues in 2008. Capitalization is not possible with the Arabic script but can be an asset in non-verbal communication.

    Another reason for Arabizi’s sustained usage is its ability to keep SMS text messaging costs low. Unicode SMS messages in Arabic max out at 70 characters each, whereas a single SMS message can accommodate up to 160 Latin characters. When paying per message, Arabizi allows people to communicate more for less. A 2018 study of Arabizi conducted in Saudi Arabia reached the conclusion that, “…although Arabizi users have access to an Arabic keyboard and communicate with those who understand Arabic, they still resort to Arabizi, which is a marker of youth identity and solidarity.”

    Language is fluid—new slang and code is being created by people all over the world at any given time. Vcheck Global’s International Office has in-house experts fluent in several languages and maintains active relationships with language experts on the ground in countries across the globe. These experts continually study modern linguistics and translations, ensuring Vcheck Global reports include all valuable information regardless of language.

    Brittany Thayer is an investigator based out of Vcheck Global’s office in Boston. Vcheck Global Investigator Ishan Sawai contributed to this article.

    Sources: 
    Alghamdi, Hamdah; Petraki, Eleni. 2018. “Arabizi in Saudi Arabia: A Deviant Form of Language or Simply a Form of Expression?” Soc. Sci. 7, no. 9: 155.
    Yaghan, Mohammad Ali. ““Arabizi”: A contemporary style of Arabic Slang.” Design Issues 24, no. 2 (2008): 39-52.