A Richmond property was allegedly transferred to a “nominee” owner after it was raided by RCMP earlier this year as part of an investigation into an illegal cannabis grow operation, the B.C. government claims.
In a notice of civil claim filed in B.C. Supreme Court on Jan. 5, the province’s Director of Civil Forfeiture claims that the property, at 11880 Machrina Way near No. 5 Road in Ironwood, is the proceeds of crime.
Chartell Properties Ltd., its sole director Jefferson Wu, and numbered company 1152529 B.C. Ltd. and its sole director Yanqiu Huang, are named in the suit.
“The property has been used by the defendants to engage in unlawful activities which variously resulted in, or were likely to result in, the acquisition of property or an interest in property, or caused, or were likely to cause serious bodily harm,” the court document reads.
Those unlawful activities include violations of the Cannabis Control and Licensing Act, including possession for the purpose of distribution, possession for the purpose of selling and propagation and harvesting of illicit cannabis.
Other allegations include money laundering, failure to declare taxable income and possession for the purpose of trafficking and trafficking controlled substances.
Neither Chartell or the numbered company have yet filed a response to the suit, and the claims have not been proven in court.
According to the court document, the property was purchased by the numbered company in April 2018 – a purchase that was financed, in part, with a mortgage held by Chartell Properties.
Richmond RCMP launched an investigation into an illicit cannabis grow operation at the property in April 2020.
Through that investigation, police learned the property was authorized, held by Han Chao Xiao, by Health Canada to produce 195 cannabis plants and possess 150 grams of cannabis.
However, Xiao had died in late April 2020.
On May 26, RCMP checked the property and “detected the strong odour of vegetative cannabis,” according to the court document.
Then, on June 4, police obtained a search warrant and raided the property, where they found cannabis growing equipment, 6,605 cannabis plants “at various stages of growth,” 22.5 kg of dried cannabis bud and 104 Ziploc bags of dried cannabis bud, according to the lawsuit.
RCMP also found an invalid authorization from Health Canada to possess cannabis and produce cannabis for personal use at the property. Meanwhile, BC Hydro records obtained by police in September 2020 “determined there had been a significant increase in hydro consumption at the property starting in May of 2018,” the court document reads.
As Xiao, the holder of the Health Canada authorization, had died, there was no lawful authority to produce cannabis between April 27 and June 4, when the property was raided by police, according to the lawsuit.
On Aug. 21, 2020, two months after the property was raided by RCMP, the numbered company sold it to Chartell Properties.
“The transfer was not a bona fide transaction for value and is not a valid or enforceable charge against the title of the property,” the suit alleges. “The transfer of the property was not done in good faith for good consideration.
“The numbered company is the beneficial or ‘true’ owner of the property. Chartell acts as a nominee owner or ‘owner of convenience’ on behalf of the numbered company with respect to the property.”
Alternatively, Chartell is the beneficial or “true” owner, the suit states, and it was the numbered company that acted as an “owner of convenience” prior to Aug. 21, 2020.
In the suit, the B.C. government wants the court to issue an order that the property transfer is void and of no effect, or, alternatively, an order that any legal title Chartell holds to the property is in trust for the numbered company as its beneficial owner.
The government also wants the property and its proceeds and interest to be forfeited as the proceeds of crime.
