Inside the world of B.C.'s top realtor: A deep pool of Mainland Chinese buyers, a dead fraudster and a forfeited licence
A Province investigation into hundreds of pages of court documents highlight the money, associations and conflicts surrounding an exceptional realtor in an extraordinary period for Vancouver real estate
Why would a realtor as successful as Julia Lau choose to forfeit a lucrative licence at the height of her prominence?
Photograph by: Ben Ngai , Province Graphics
Julia Lau rapidly climbed to the top in Vancouver real estate, tapping her deep pool of Mainland China buyers.
Coming from Hong Kong, Lau started selling Vancouver homes in 2005. In 2008 she earned just under $400,000 in commissions. In 2009 she claimed $689,064 in annual income, putting her in the top one per cent of Metro Vancouver realtors. In the next few years, as investment from China surged, Lau’s sales reportedly accelerated to about 100 luxury homes per year.
In her Granville Street home she kept signifcant amounts of cash in a closet safe-vault standing between racks of designer jackets. She exuded prominence and wealth.
But quietly in 2015, The Province has learned, Lau voluntarily forfeited her realtor’s licence — permanently — instead of going through a disciplinary hearing with the Real Estate Council of British Columbia. The council alleges that while working for Sutton Group-West Coast Realty, Lau paid or offered to pay an unlicensed assistant to obtain sales listings. And while under investigation by the council, Lau allegedly “made or allowed to be made” false or misleading statements.
These types of allegations are common, a council spokeswoman told The Province. Discipline for such allegations would typically result in a two-week licence suspension, if the charges were proven.
But since Lau asked for the hearing to be discontinued and volunteered to surrender her licence, details of the council’s investigation will not be tested or reported publicly.
Why would a realtor as successful as Lau choose to forfeit a lucrative licence at the height of her prominence?
Lau’s lawyer in the case, Kelly Murray, told The Province that Lau had decided to retire “before the matter arose.” Lau did not admit to any of the council’s allegations, Murray stressed, and the council agreed to Lau’s offer to turn in her licence and have the hearing suspended.
A Province investigation into hundreds of pages of court documents connected to Lau’s professional and personal deals highlight the money, associations and conflicts surrounding an exceptional realtor in an extraordinary period for Vancouver real estate. Of all cases examined by The Province, the most bizarre, detailed and complex is Lau’s failed challenge against Canada’s anti-money-laundering officials.
According to a federal judge, Lau was “unlucky or unwise or both” in an ill-fated 2010 deal involving cross-border transactions and hard-to-trace cash seized by Canada Border Services agents. Some evidence put forward by Lau in the case raised as many questions as answers, the judge said.
And five years later, puzzling questions remain around the death of the young Chinese-Canadian fraudster hired by Lau to buy a 2008 Porsche Turbo Cabriolet in Florida, via Wynn Casino in Las Vegas.
MONEY LAUNDERING'S THREE STAGES
Experts on money laundering say the process generally has three stages, but transactions can occur in as many ways as the imagination can devise.
Placement is the initial entry of dirty cash into the financial system and can take place through exchanging cash for gambling chips in casinos, smuggling currency across borders, repaying loans or wiring funds through foreign currency exchanges.
Layering is the second stage, in which money launderers often move money electronically to foreign countries and make multiple financial transactions to confuse auditors.
Finally, dirty cash is integrated into the mainstream economy in assets such as real estate, high-end vehicles and art work, to be enjoyed, held as stores of wealth, or resold.
AUTHORITIES SEIZE $133,000 PAYMENT
Julia Lau’s conflict with Canada’s anti-money-laundering agents started in April 2010 — according to Federal Court of Canada Judge Michael Phelan’s 2012 ruling — when she contracted Jason Edward Lee, then 29, as her agent to buy a used high-end Porsche in Florida.
Lee was recommended to Lau by her assistant Cynthia Hsiung, court filings say. Lee was to be paid $10,000 to buy a yellow Porsche 911 and ship it to Vancouver. Court records show that in late 2009 Lee was facing a debt of $265,000 after he allegedly forged his aunt’s power of attorney and fraudulently took out a mortgage against her Vancouver home in 2009.
In her contract with Lee, Lau was to wire $133,000 in U.S. funds to him to buy the car in Florida. But the funds were to pass through Las Vegas.
Lau transferred the money into a Bank of Nevada account at the Wynn Casino branch. As Judge Phelan wrote in 2012, “Curiously the money was to go into a casino cage depository.”
According to Lau’s court filings, several days after receiving Lau’s wire transfer Lee called her and told her that he had actually bought the Porsche with his own money, and he had wired Lau’s $133,000 back to her.
On April 30 Lee showed up at Lau’s home, she claims, and presented a forged bank document purporting to show the money had already been returned. Lee said the Porsche was on the way, Lau claims, and he insisted that Lau needed to repay him in cash immediately since he was travelling to China for business. In sworn statements Lau claims she checked that day with her bank to see if the $133,000 wire transfer had in fact arrived.
It had not.
However, Lau claims she went ahead and paid Lee $133,000 the night of April 30, anyway. She “drew approximately $100,000 of the cash payment from her personal cash savings kept in her safe at her residence,” court filings say, and she gathered a $30,000 cash loan from a Chinese businessman.
Lee attempted to fly to Las Vegas the next day and was caught by Canada Border Services agents in Vancouver with the $133,000 in undeclared cash. The cash was seized under Canada’s anti-money-laundering laws, as suspected proceeds of crime.
Lee told agents that he was in the process of selling a Porsche to Lau, and admitted that previously he had been involved in fraudulent sales of high-end vehicles. Under questioning, Lee eventually said he had lost Lau’s first wire transfer of $133,000 gambling in Las Vegas, but he still intended to buy her a Porsche with the $133,000 in cash he was carrying.
He told CBSA agents that $30,000 of the undeclared cash had come from a loan shark. Lee returned to Lau on the night of May 1, she claims in court filings, and informed her CBSA had seized the $133,000 in cash.
MAN'S BODY FOUND IN TRUNK OF CAR
Soon after, Lau took Lee to Richmond law firm Benedict Lam Law Corporation.
On May 12, Lau’s counsel from the firm wrote to the CBSA on behalf of Lee and asked for the seized $133,000 to be returned to him. There was no mention of Lau in the first letter. Just over a month later, on June 19, Lee was found lying dead in the trunk of a car in Burnaby, with a plastic bag over his head.
Integrated Homicide Investigation Team detectives looked at the case and eventually decided that Lee likely committed suicide, Sgt. Bari Imam told The Province. The case file was turned over to Burnaby RCMP’s serious crimes unit, where it remains. The B.C.’s Coroners Service could not determine the cause of Lee’s death, in a report that details his bizarre demise.
On June 22 — three days after Lee’s body was found — Lau’s counsel wrote another letter to the CBSA, now saying he represented both Lau and Lee. The Porsche acquisition deal and Lau’s payment to Lee were mentioned, and both Lee and Lau said “that the money is for purchase of the Porsche and no other purposes,” the legal letter claimed. A false bank deposit statement was included with the letter.
On Aug. 22 Lau’s counsel wrote again to the CBSA saying: “we were shocked to have learned from you on August 18, 2010 over the telephone that Mr. Lee our client has deceased.”
Lau’s counsel then asked the CBSA to place the funds seized from Lee into an “interest bearing account” for Lau until she “claims the ownership.”
Court filings show that on Sept. 24, 2010, Benedict Lam wrote to Lau saying he had thoroughly reviewed her file on the matter of “debt collection and Jason Edward Lee (deceased).” In Lam’s opinion the firm could no longer represent Lau and must “ask you to please appoint another lawyer, preferably a criminal lawyer, to assist you immediately since time is of the essence.”
Within weeks, now with representation from Peck and Company partner Jeffrey Campbell, Lau petitioned the CBSA for return of the cash seized from Jason Lee.
In November 2010 the CBSA responded that Lau’s legal claims did not “remove the suspicion that the seized currency was proceeds of crime,” and that she must provide “reliable independent evidence to establish that no other reasonable explanation is possible.”
Lau attempted a new approach, launching challenges against Canada’s public safety minister, alleging the federal government had erred in applying its anti-money-laundering laws. In sworn statements, seeking to clear suspicions around the seized cash, Lau claimed that $100,000 given to Lee on April 30 had originally been gifted to her by a Chinese citizen named Jihua Lu. Lu was an artist who kept an apartment in Burnaby and visited and dated Lau, she claimed.
“I keep significant amounts of cash in my personal safe,” Lau wrote. “All of this money was lawfully possessed. When Mr. Lu visits Canada, he often gives me cash.”
Lu –- a 59-year-old with neatly trimmed hair wearing a shirt and tie, according to his Canadian permanent resident card photo -- provided a statement supporting Lau’s claim. He claimed that most of his art sells in China, and his annual income is about $200,000.
“When I came here in 2007, I met (Julia Lau) through her work as a real estate agent,” Lu wrote. “I have often given her cash gifts. When I come to Canada, I bring Canadian currency with me.”
Lau claimed a final $30,000 allegedly given to Jason Lee on April 30 came from $50,000 in cash withdrawn from a Vancouver bank on April 28 by Mai Lin Chen, a wealthy friend with pharmacy and real estate businesses in China.
Lau argued in court filings that she had no idea Jason Lee was planning to “smuggle” $133,000 in cash out of Canada, she was not complicit in any of his frauds, and that Canada must return the seized funds to her and pay her legal costs.
HOME SAFE CREATED 'UNDOCUMENTED VOID'
In June 2012, Judge Phelan said the government had good reasons to keep the money claimed by Lau.
Phelan wrote that Lau failed to establish origins of the seized cash under Canada’s anti-money-laundering laws, and if she kept $100,000 in her American Security home safe it “created an undocumented void between a legitimate origin and the seized funds.”
Canadian officials were not able to identify withdrawals from Jihua Lu’s bank account which corresponded to his gifts to Lau, Phelan ruled. Furthermore, the CBSA “was unable to ascertain the origin of numerous large deposits made into (Jihua Lu’s) account” — and questions about the source of Jihua Lu’s money “have gone unanswered throughout the process,” Phelan wrote.
There was also no evidence to establish the legitimate origins of $30,000 Lau allegedly obtained from her friend Mai Lin Chen. Phelan noted these funds were withdrawn two days before April 30, the day that Lau claims Jason Lee pressed her for $133,000 in cash. A loan document written up between Julia Lau and Mai Lin Chen “raises as many questions as it answers,” Phelan wrote.
He noted that although Lau is a successful realtor with an MBA, the loan document lacked fundamental information such as an interest rate agreement and other terms. The government was right to look for other origins of the $30,000, such as Lee’s “admission” that it came from a loan shark, Phelan wrote.
Phelan also rejected Lau’s claim that she had no idea Lee would attempt to travel to Las Vegas with $133,000 in cash.
“Even if Ms. Lau is the owner of the funds, Mr. Lee was her duly constituted agent for transporting the funds across the Canada/U.S. border,” to purchase a luxury car, Phelan wrote. “Given the totality of the background of this case, it is hardly surprising that the minister (of public safety) had suspicions as to the source of funds and the flow of monies. The central thesis of the Minister’s decision is that he was not satisfied as to the origins of the funds. There is a clear and rational basis for the Minister’s concern.”
Julia Lau was not available for direct questions from The Province, but her lawyer Jeffery Campbell responded to questions through email.
Lau maintains Jason Lee stole her money and defrauded her.
“The government refused to return the stolen money to Ms. Lau,” Campbell wrote. “Ms. Lau does not agree with the minister’s decision, and does not agree that there should be any suspicion with respect to her property.”
Campbell said that Lau was never the target of any criminal investigation in this case, and as far as Lau knows she was never investigated by any federal agencies involved in anti-money-laundering laws, such as Fintrac or the CRA, in connection to the case. Julia Lau does not know the circumstances surrounding Jason Lee’s death Campbell said.
In several interviews with The Province Cynthia Hsiung, Lau’s former assistant, said that she and her daughter, who was dating Lee, were stunned by his death. Hsiung said she was unaware of any money problems surrounding Lee, and that she and her daughter don’t know details of his death. The B.C. Coroner’s report stated Lee was a gambling addict.
“Of course we were shocked,” Hsiung said. “The police told us it was suicide.”
In Lau’s sworn court statements she claimed that she had become suspicious of Lee when he returned to Vancouver and asked her for cash, and so she called Hsiung on April 30, 2010 to ask whether Lee was a gambler, and whether he could be trusted with cash. “She told me that it was no problem, and that he could be trusted,” Lau testified in an affidavit.
Hsiung told The Province that she did initially recommend Lee to Julia Lau as an auto dealer, but she was never called by Lau on April 30 and questioned about Lee’s trustworthiness with cash.
“I don’t even know that (Julia Lau) had all this cash,” Hsiung said. “I have no idea.”
LEGAL BATTLES FOR LAU
Lau has also been involved in legal battles with other realtors.
In January 2013, when she was Chinese real-estate specialist at Sotheby’s International Realty Canada, Lau sued the firm for allegedly deducting too much from her commission on a Burnaby home that sold for almost $10-million. Former Canadian tennis star Grant Connell -– now a prominent West Vancouver realtor — and a partner had been trying to sell the home since 2008.
In spring 2012 they brought Lau on board for her special ability to produce Chinese buyers. Lau was “instrumental” in securing a buyer and closing the deal, her claim says. The buyer, property listings say, is named Yu Lu Zhang. Lau argued her deal was for 50 per cent of the commission, while Sotheby’s argued she owed the firm a bigger cut due to a “corporate referral.”
The “legal situation” with Lau has not yet been resolved, a spokeswoman from Sotheby’s International Realty Canada told The Province.
Connell said he has “no problem” with Lau.
“What she did, is she came in and she was very blunt and tough,” Connell said. “She dealt with the Chinese market and she bruised a lot of egos because she beat out a lot of people. I heard she sold 100 homes in 2010, and 100 in 2011.”
Lau’s own statements seem to correspond with Grant Connell’s perception of her success. In early 2012 Lau told The Province she expected to sell about 10 luxury homes per month from January to May, which would be a slower pace of sales than she achieved in 2011.
Lau said her clients were wealthy Chinese businessmen.
“In Chinese culture we buy one home for living in and a few for investments,” Lau said in 2012, adding the risk of rising interest rates was not a factor for her buyers. “Most of my clients buy in cash, so they don’t need the bank.”
In 2013, Lau told the South China Morning Post that 80 per cent of her clients were from Mainland China. In a brief market slowdown in 2013, Lau told The Globe and Mail she was having difficulty locating a suitable property on Vancouver’s west side for a Chinese immigrant family with $20 to $30 million to spend.
In another battle over listings and commissions in 2011, Lau sued Cindy Xiao Yan Li and Lili Gan for $121,240 for lost commission related to a real estate deal, but Lau discontinued the claim later that year.
A review of Real Estate Council of British Columbia records shows that Julia Lau was called as a witness in a 2010 discipline hearing against another realtor, who was accused of misrepresenting a seller and found to have been involved in a forged sale contract for a 2006 North Vancouver deal. Lau was realtor for the buyer in the collapsed deal. As the buyer’s financing appeared to stall, according to testimony, the deal was eventually to include a deposit for $127,000 to be paid directly from the buyer to the seller, with the payment to be made in Iran. Lau submitted the original offer, which called for a deposit of $40,000 to be placed in trust at the brokerage Lau worked in, and later called for $127,000 to be paid directly from the buyer to the seller. In the opinion of one realtor that testified at the hearing, the seller and buyer seemed to be involved in “mortgage fraud.”
A spokeswoman for the Real Estate Council of British Columbia said the Council became aware in 2012 of Judge Phelan’s dismissal of Lau’s challenge to Canada’s anti-money-laundering regime, and the Council decided the case had nothing to do with Lau’s real estate business.
While Lau has not spoken directly with The Province, her daughter Rachel Chan -- an 18-year-old B.C. university student born in Hong Kong -- contacted The Province and said her mother Julia Lau was not available to speak, but that Lau had authorized Chan to speak on her behalf.
Chan said she is concerned that the truth about her mother is known, and claimed that her mother has been cleared of any suspicions raised in her 2010 case against Canada’s anti-money-laundering officials, after an audit by the CRA.
“I definitely hear rumours,” Chan said. “Some of the rumours are ridiculous. My mother definitely works very, very hard, and that’s what inspires me.”
Chan said that her mother is innocent of allegations made by the Real Estate Council of British Columbia and Lau was planning to defend herself, however a lawyer advised Lau not to waste her time and money since she had been planning to retire anyway.
“My mom and I know that she is innocent of these accusations,” Chan said. Lau now works at investing an undisclosed amount of personal money, Chan said.
‘HIS HEAD RESTED ON A STUFFED ANIMAL': JASON LEE DEATH REPORT
The B.C. Coroner did not conclude that Jason Edward Lee killed himself, although an investigation found suicide was the possible cause of death, potentially in connection to debt and gambling addiction. The report states Lee was found dead in the trunk of his unlocked car on June 19, 2010, at the end of an alley backing onto a forest in a Burnaby neighbourhood. He was reported missing by his family on June 17, and they said they had last seen him on June 7.
Lee was found fully dressed, flat on his back with his head resting on a stuffed animal, a plastic bag pulled over his head, with zap straps bound around his hands and feet. He died of heroin toxicity and suffocation on June 17, the coroner found. There were two used heroin needles found outside the car, and a flashlight and pliers inside the car.
An investigation found Lee had a chronic gambling addiction, and he owed large amounts of money. In early May 2010, days after the CBSA seized $133,000 from Lee, he arrived at his family’s home disheveled, claiming to have been kidnapped, drugged and left in a city park. Vancouver police suspected he had staged the event to push his debt problems away. The B.C. Coroner agreed.
Lee’s family said he had no history of illicit drug use but he was depressed over his debt load. People claiming to know Lee had visited his family’s home demanding debt payments from his family members. Investigation found no evidence of foul play at the scene of Lee’s death, though. The coroner said she could not determine whether Lee’s death was suicide or accident. Lee’s family was informed of his death on June 19.