A Burnaby, B.C., man has been identified as a suspect in an RCMP investigation into organized crime groups accused of scamming Canadians by posing as Canada Revenue Agency officers, demanding payment through cash and gift cards.
According to B.C. Supreme Court documents, officers searched the home of Haoran Xue last July after a probe linked him to retail mailboxes set up around the Greater Vancouver Area.
Details of the investigation are laid out in a lawsuit filed in mid-November by the director of B.C.’s Civil Forfeiture Office, who now wants to seize the 26-year-old’s home as the proceeds of crime.
According to the lawsuit, the RCMP claim Xue has transferred $1 million in and out of his bank accounts since January 2019.
Investigators tailed him for several weeks last summer and ultimately seized a cellphone that allegedly contained the names of victims and the addresses to which they were told to send specified amounts of money, the documents say.
Ryan Duquette, a partner with global cybersecurity firm RMS, says the allegations point to the kind of money involved in phone scams that have become a constant source of irritation for Canadians.
“These sorts of scams are very lucrative,” said Duquette. “We don’t see as many people being arrested and charged for crimes like this in Canada, just because it does take a lot of police resources in order to track down these sorts of scams and the perpetrators behind them.”
In a statement, the RCMP confirmed that the investigation is ongoing and that no charges have been laid.
But the lawsuit says RCMP arrested Xue for fraud and uttering a forged document earlier this year.
Xue has yet to file a response to the civil claim.
None of the allegations contained in the lawsuit have been proven in court.
Home valued at $1.9M
The house is registered to Xue’s father, Zenggang Xue, who is believed to reside in China. But the court documents allege that Haoran Xue is the “true” owner of the property, which is assessed at $1.9 million.
When CBC News visited the Burnaby residence on Tuesday, Xue did not appear to be home; the mailbox was full and a heap of mail was lying on the doorstep.
Built in 2015, the two-storey home sits on a corner lot in a quiet neighbourhood near a major park. The property is split into a number of suites. It was up for sale as recently as August, listing seven bedrooms and six bathrooms, but there was no sign out front Tuesday.
One of several tenants in the home, Brady Qiu, said he hadn’t seen Xue since July, around the time police searched the home. Qiu, a student, said he believed Xue was in Hong Kong.
B.C.’s Civil Forfeiture Act allows the province to file a suit against property linked to unlawful activity, regardless of whether a person has been convicted or even charged with a crime. To win, the director of civil forfeiture has to establish that the property in question is either the proceeds of crime or an instrument of unlawful activity.
According to the lawsuit, the RCMP’s federal Serious and Organized Crime Division launched the investigation into Xue in June.
The probe is not limited to the CRA scam, but also includes so-called “technical support scams” in which people pose as “RCMP, software company employees or bank investigators who would contact unsuspecting individuals and demand money be sent in the form of cash or gift cards to various retail mailboxes in Ontario and British Columbia.”
‘Cash stored within a book’
The court documents allege that the RCMP located a fraudulent driver’s licence and a cellphone while searching Xue at the time of his arrest.
Along with text messages with information about scam victims, the cellphone also allegedly contained “a video in which Mr. Haoran Xue unboxes a parcel containing cash stored within a book.”
The idea of sending a gift card or cheque to a mailbox at the request of a government agency might appear absurd, but Duquette says many seniors and new immigrants fall prey to the scams.
The search warrant for Xue’s home appears to be sealed, which means the scant details about the investigation come from the lawsuit.
‘A national priority investigation’
Since 2014, the Canadian Anti-Fraud Centre has received 78,472 reports from across Canada of scammers pretending to represent the CRA or Immigration, Refugees and Citizenship Canada. The centre says 4,695 people have lost more than $16.7 million to these scams.
This summer, an RCMP investigator probing the CRA phone scam told Marketplace that Canadian accomplices were suspected of ferrying proceeds of crime overseas. In 2018, Marketplace tracked the location of one major enterprise behind the harassing calls, operating out of an apartment complex in Mumbai.
“It’s essentially a national priority investigation,” RCMP Insp. Jim Ogden told Marketplace in the summer. “They’re defrauding the Canadian public and sending money away — they’re money laundering.”
Watch: CBC Marketplace investigates the CRA phone scam: