Saturday, April 21, 2018

MORE THAN 130 ARRESTED IN INTERNATIONAL NARCOTICS AND MONEY LAUNDERING INVESTIGATION

FOR IMMEDIATE RELEASE
WEDNESDAY, MARCH 31,
2004


WWW.USDOJ.GOV
CRM
(202) 514-2007
TDD (202) 514-1888

MORE THAN 130 ARRESTED IN INTERNATIONAL
NARCOTICS AND MONEY LAUNDERING INVESTIGATION


Drugs and money are displayed prior to a news conference in Toronto, where the alleged head of ecstasy distribution for an international ring was arrested. Associated Press photo by Aaron Harris

Image result for The alleged ringleaders are Ze Wai Wong, 46, a Chinese national, and Mai Phuong Le, 38, a Vietnamese national. Wong was arrested in Toronto and Le in Ottawa.

WASHINGTON, D.C. Deputy Attorney General James Comey, DEA Administrator Karen P. Tandy, FBI Director Robert S. Mueller, and IRS Criminal Investigations Chief Nancy Jardini announced the arrests of more than 130 defendants across the United States as part of an investigation dubbed, “Operation Candy Box.” Today’s arrests mark the culmination of a two-year multi-jurisdictional and international Organized Crime Drug Enforcement Task Force case that was coordinated by the multi-agency Special Operations Division, targeting a significant MDMA (Ecstasy) and marijuana trafficking organization in both the United States and Canada.
The arrests today include ringleaders Ze Wai Wong, a Chinese national, and Mai Phuong Le, a Vietnamese national. The indictments: Wong was the leader of a drug distribution ring operating in 18 U.S. cities and Canada, while Le is accused of orchestrating the laundering of the drug proceeds of the drug ring. According to indictments unsealed today, the charges against the more than 130 defendants center around their alleged roles in the various drug distribution cells, as money launderers and couriers in both the United States and Canada.

Image result for Deputy Attorney General James Comey

“The importance of today’s operation cannot be overstated,” said Deputy Attorney General James Comey. “Through the work of many different agencies, we have achieved a top to bottom decimation of a dangerous drug organization and a complimentary attack on the fuel that drives the organization - their money.”
Early this morning, authorities began arresting over 100 indicted defendants and executing approximately 35 search warrants in 16 U.S. cities, including Houston, TX; Los Angeles, CA; San Francisco, CA; Oakland, CA; San Jose, CA; Jacksonville, FL; New Orleans, LA; Baton Rouge, LA; Mobile, AL; New York, NY; Boston, MA; Atlanta, GA; Alexandria, VA; Des Moines, IA; Minneapolis, MN; and Salt Lake City, UT. Canadian authorities are expected to execute approximately 50 arrest warrants on subjects identified in related investigations in the Canadian cities of Ottawa, Toronto, and Montreal.
"Out of all the dangers of illegal drugs, ecstasy is of special concern because it is aimed at our teens and youth masquerading as colorful candy,” said DEA Administrator Karen Tandy. “Today we have decimated a criminal organization that has poisoned our neighborhoods with up to a million Ecstasy tablets per month and sent as much as $5 million in proceeds abroad per month over five years. But for the families and loved ones of those who would have taken these millions of dangerous pills in the future, the impact of this operation is enormous,” she said.
This two-year investigation has already produced 38 arrests and the seizure of 400,000 MDMA tablets, 1,170 pounds of marijuana, 6.5 pounds of methamphetamine, 12 handguns, and $5.9 million in U.S. currency. Operation Candy Box targeted an international organization involved in ecstasy and Canadian marijuana (locally referred to as “BC Bud”) distribution to the United States through command and control cells in Canada. According to the court documents, the organization allegedly utilized a sophisticated money laundering network of money remitters and travel agencies in both the U.S. and Canada to launder drug proceeds.
“Today’s arrests deal a substantial blow to a criminal organization involved in illicit drug production, trafficking and money laundering,” said FBI Director Robert S. Mueller III. “This victory is a direct result of enhanced collaboration with our municipal, state, federal and Canadian law enforcement partners, as well as our use of intelligence to systematically dismantle a complex, multi-jurisdictional criminal enterprise,” he concluded.
According to the U.S. and Canadian court documents, Ze Wai Wong, 46, is the major distributor of Ecstasy throughout the U.S. and Canada, while Mai Phuong Le, 38, is accused of directing the money laundering operation responsible for repatriating the drug proceeds of Wong's organization and of other traffickers. According to the court papers, U.S. money remitter firms, including U.S. Tours and Travel (California and Texas) and An Chau Services (Georgia) are alleged to have been used to launder the illicit proceeds. It is alleged that the defendants were able to make large cash deposits into the U.S. banking system while disguising the illegal source of much of the money. The proceeds were later transferred to various bank accounts world-wide, including in Vietnam, it is alleged. Information obtained during the investigation indicated that the network was capable of allegedly laundering as much as $5,000,000 per month. Warrants are being served on financial institutions utilized by the network in an effort to seize funds as well as to obtain transaction records.
"The major goal in a financial investigation is to identify and document the movement of money during the course of a crime and the efforts employed to hide and conceal the profits," said Nancy Jardini, Chief, IRS Criminal Investigation. "The link between where the money comes from, who gets it, when it is received, and where it is stored or deposited, can provide proof of criminal activity. Finding and connecting those links is what IRS brings to this cooperative effort today. However, the combined efforts of law enforcement agencies in an investigation of this magnitude produce a formidable force against narcotics trafficking and money laundering."
Wong and Le are accused of directing the operations from Canada, and both were arrested in Canada this morning. However, U.S. indictments have also been returned against both Wong and Le. An indictment unsealed today in the Central District of California charges that Wong and Le operated a Continuing Criminal Enterprise (CCE). An indictment in the Southern District of New York names both Wong and Le in drug trafficking and conspiracy charges, and the District of Massachusetts has indicted Le for similar offenses.
Operation Candy Box revealed allegations that bulk quantities of MDMA tablets were being made in clandestine labs in Canada. In August 2003, three fully operational tableting laboratories were discovered and dismantled by Canadian officials.
Authorities also identified a large network of couriers who allegedly utilized vehicles with sophisticated "traps" to transport currency and Ecstasy. In one incident, a vehicle bound for Canada via the border city of Burlington, Vermont was searched and $750,000 in U.S. currency was discovered concealed in the fuel tank. Information developed during the investigation suggested that the organization was capable of distributing up to 1,000,000 Ecstasy tablets per month in the U.S. and Canada.
Operation Candy Box is a joint investigation involving the DEA, FBI, the U.S. Immigration and Customs Enforcement (ICE), the Internal Revenue Service (IRS), the Department of Justice Criminal Division, various state and local agencies, and in conjunction with the Royal Canadian Mounted Police (RCMP), Toronto Police Department, Ontario Provincial Police, and Ottawa Police Department.
The charges contained in the indictment are just allegations. The defendants are presumed innocent until and unless proved guilty in a court of law.
The following federal, state, and local agencies participated in Operation Candy Box:
Federal Agency Participation:
Drug Enforcement Administration
Federal Bureau of Investigation
Department of Justice, Criminal Division, Narcotics and Dangerous Drugs Section
Department of Justice, Criminal Division, Asset Forfeiture and Money Laundering Section
U.S. Immigration and Customs Enforcement
Internal Revenue Service
State Department, Bureau of Diplomatic Security
United States Attorneys' Offices:
Houston, TX - SDTX
Alexandria, VA - EDVA
Los Angeles, CA - CDCA
Jacksonville, FL - MDFL
New Orleans, LA - EDLA
Baton Rouge, LA - MDLA
Mobile, AL - SDAL
New York, NY - SDNY
Boston, MA - DMass
Atlanta, GA - NDGA
Des Moines, IA - SDIA
Minneapolis, MN - DMinn
Salt Lake City, UT - DUT
San Francisco, CA - NDCA
Canadian Agency Participation:
Royal Canadian Mounted Police
CFSEU (Greater Toronto Area)
Ontario Provincial Police
Ottawa Police Service
Canada Border Services Agency
State and Local Law Enforcement Participation:
Massachusetts:
Massachusetts State Police
Boston Police Department
Boston Housing Police
Milton Police Department
Middlesex County District Attorney's Office
Vermont:
Vermont State Police
New York:
New York City Police Department
California:
Oakland Police Department
South Alameda County Narcotics Task Force
Union City Police Department
Los Angeles County Sheriff's Department
California Department of Justice, Bureau of Narcotics Enforcement
Tustin Police Department
Newport Beach Police Department
Huntington Beach Police Department
Garden Grove Police Department
Westminster Police Department
Florida:
Jacksonville Sheriff's Office
North Carolina:
Charlotte-Mecklenburg Police Department
Rock Hill Narcotics Task Force
Cabarrus County Sheriff's Office
Louisiana:
Kenner Police Department
Jefferson Parish Sheriff's Office
Louisiana State Police
Alabama:
Mobile Police Department
Bayou La Batre Police Department
Baldwin County Sheriff's Office
Minnesota:
Minnesota Gang Strike Force
Anoka-Hennepin Task Force
Minnesota State Gaming Commission
Minnesota State Patrol
Texas:
Houston Police Department
Texas State Attorney's Investigators Office
Texas Department of Pubic Safety
Washington:
Bellevue Police Department
Maryland:
Prince George's County Police Department
Montgomery County Police Department
Calvert County Sheriff's Office

Operation Sidewinder: Chinese Intelligence Services and Triads financial ties in Canada

Operation Sidewinder:

Chinese Intelligence Services and Triads financial ties 

in Canada


 
 
 

By Guest Column  October 5, 2008 


Operation Sidewinder:

In Canada spies are us

by Judi McLeod, Canadafreepress.com
January 26, 2005
Operation Sidewinder. It sounds like a Hollywood spy movie starring Harrison Ford.
For a long time, Sidewinder moldered on the shelf as just another conspiracy theory.
In reality, Sidewinder was a controversial report put together by a small but hard-working team of RCMP and CSIS (Canadian Security & Intelligence Service) officials.
It was Sidewinder that sounded the first alarm bells that China is one of the greatest ongoing threats to Canada’s national security and Canadian industry.
But even after Sidewinder was side swiped by former Prime Minister Jean Chretien, intelligence proves that there is no doubt that an active Chinese Intelligence Service has been able to gain influence on vital sectors of the Canadian economy, including real estate, high technology and security. The bottom line is that this unprecedented influence gave China ongoing access to economic, political and some military intelligence in Canada.
Operation Sidewinder met with a fate that silenced ringing alarm bells. Officially entitled Chinese Intelligence Services and Triads Financial Links in Canada, it was buried. Following orders from persons unknown, CSIS watered down Sidewinder’s worrisome conclusions and replaced it with a revised document called, Echo.
CSIS officials maintain that they buried Sidewinder because it relied on nothing more than conspiracy theories—even though http://www.asianpacificpost.com heralded the news in August 2003 that some 3,500 Chinese spy companies had been identified operating in Canada and the United States.
While CSIS claimed that conspiracy caused them to go mum, other intelligence sources are saying that political pressure forced CSIS to abandon the Sidewinder report.
Prominent among Sidewinder’s case studies was The Chinese, state-owned China International Trust Investment Company (CITIC), which already has a subsidiary up and running in Canada. CITIC has spent about $500 million to buy a Canadian pulp mill, a petrochemical company, vast real estate and hotels. At the time of the Sidewinder report. CITIC already had connections with one large Canadian corporation.
Add to that portfolio, the Alberta oil sands, ownership of which is currently being contemplated by a state-owned Chinese company and a Toronto-based mine company, Noranda Mines–a deal worth more than $7 billion.
Sidewinder found that significant amounts of arms, manufactured by a CITIC-controlled company, have been confiscated on Mohawk reserves.
Chinese tycoons have gained solid influence in municipal politics and development through their ownership of large chunks of real estate and hotel chains in key urban centres like Toronto.
Vancouver is now considered the North American gateway for China’s state-owned COSCO shipping company.
Both U.S. Senate and Canadian intelligence sources have described COSCO as “the merchant marine for China’s military”.
According to U.S. Intelligence reports, COSCO vessels do not just transport Oriental bric-a-brac. COSCO vessels have been caught carrying assault rifles into California and biological-chemical weapons components into North Korea, Pakistan, Iraq and Iran. Add to these disturbing events that Canadian law enforcement agencies have kicked in with hard-line information that Chinese Triad criminal elements are active in and around Canada’s ports.
Sidewinder star Li Ka-Shing is also Asia’s most powerful man. He owns large tracts of prime real estate in Canada and octopus-like interests in the nation’s telecommunications, petroleum and banking sectors. Even as he was acquiring Vancouver’s Expo 86 lands, Hong Kong Police were asking CSIS to investigate Li Ka-Shing in Canada, back in 1988. Anne Marie Doyle, then Canadian High Commissioner officially denied that request to Hong Kong.
Conspiracy theories were tossed out the window when U.S. Congressman Dana Rohrabacher revealed that the U.S. Bureau of Export Affairs, the U.S. Embassy in Beijing and the Rand Corporation had identified Li Ka-Shing and Hutchison Whampoa (Li’s primary business) as financing or serving as a conduit for Communist China’s military in order for them to acquire sensitive technologies and other equipment.
Former Prime Minister Jean Chretien’s connections to the burgeoning CTIC conglomerate served as his entrée into the private sector. While John Turner was leader of the federal Liberals, Chretien was working for Gordon Securities, one of the many Li-controlled companies on Canadian soil.
Chretien also served as an international-relations adviser to PetroKazakhstan, a Calgary-based oil company trying to expand its oil exports to China.
But anyone trying to join the dots on Chinese influence in Canada shouldn’t stop with Chretien.
Prime Minister Paul Martin, portrayed by the Canadian media as a sworn Chretien enemy during the Liberal leadership race, carries on the Chinese dynasty.
This is a saga that begins and ends with the Canadian International Development Agency (CIDA), which provides more development assistance to China than to any other country in the world.
Both Chretien and Martin are under the personal influence of Kofi Annan pointman Maurice Strong, who founded CIDA, which launched him as an international powerhouse in 1967.
At the same time 3,500 Chinese spy companies have been identified conducting intelligence operations in Canada and the U.S., the Canadian Liberal Government is selling off its nation’s natural resources—with taxpayers’ money.
*Canada Free Press founding editor Judi McLeod is an award-winning journalist with 30 years experience in the print media. 

Chinese Spies Engaged in Massive Theft of U.S. Technology

Chinese Spies Engaged in Massive Theft of U.S. Technology

Image result for Chinese Spies Engaged in Massive Theft of U.S. Technology


April 19 2018

Obama weakened counterintelligence against foreign spies, Congress told


China is engaged in large-scale theft of American research and technology from universities, using spies, students, and researchers as collectors, experts told Congress on Wednesday.

Compounding the technology theft, the administration of President Barack Obama weakened U.S. counterintelligence efforts against foreign spies by curbing national-level counterspy efforts, a former counterintelligence official disclosed during a House hearing.
Michelle Van Cleave, former national counterintelligence executive, said shortly after the creation of the office of the director of national intelligence in 2004, a national counterspy program against foreign spies was restricted during the administration of President George W. Bush.
"Unfortunately, the backsliding continued under President Obama," Van Cleave told two subcommittees of the House Science, Space, and Technology Committee.
Van Cleave said a directive issued by then-DNI James Clapper in 2013 and still in force reduced the national counterintelligence program authority by directing all counterspy programs to be run by individual departments or agencies.
"The national head of counterintelligence was rebranded director of a security and CI center, his duties further dissipated by the fixation on leaks and insider threats driven by the grievous harm done by Snowden, Manning, et al," Van Cleave said, referring to intelligence leakers Edward Snowden, an NSA contractor, and Army Sgt. Bradley Manning.
"Gone was any dedicated strategic [counterintelligence] program, while elite pockets of proactive capabilities died of neglect," she said.
"Read between the lines of existing CI guidance and you will not find a whiff of a national-level effort left, other than caretaker duties such as taking inventory and writing reports."
Several intelligence and security experts testified during the hearing that China poses the most significant threat of technology theft from an estimated $510 billion spent annually on U.S. research and development.
"China has a government-directed, multi-faceted secret program whose primary task is technology acquisition, as well as a highly refined strategy to develop and exploit access to advantageous information through the global telecommunications infrastructure," Van Cleave said.
Along with Russian intelligence agents, Chinese technology spies have developed specific lists of technology for theft. Beijing uses clandestine agents, front companies, and joint research ventures in the theft program.
"Indeed, the United States is a spy's paradise," Van Cleave said. "Our free and open society is tailor-made for clandestine operations."
Michael Wessel, chairman of the congressional U.S.-China Economic Security Review Commission, testified that the Chinese are focused on stealing American advanced technology related to artificial intelligence, robotics, and other cutting edge technology.
Beijing has national-level programs to obtain advanced technologies with both military and commercial applications. They include acquisition of know-how related to new energy vehicles, advanced information technology, biotechnology, new materials, aerospace, ocean engineering, railway systems, robotics, power equipment, and agricultural machinery.
"In the case of robotics and AI, two fields of study with the potential to fundamentally change the international economy as well as the future of war-fighting, China has released the Robotics Industry Development Plan and Next Generation Artificial Intelligence Development Plan with the goals of China assuming global leadership in the coming decades," Wessel said.
China also is infiltrating American universities by funding language and cultural centers called Confucius Institutes that are being used as cover for technology theft. About 100 of the institutes are operating on American campuses and use their funding as part of "soft power" efforts in the United States.
China is also using some of the 350,000 Chinese students in the United States for intelligence work. Chinese spies recruit students with appeals such as "can you help China?" Wessel said.
Recent spy cases have included an electrical engineering professor at the University of Tennessee, John Reese Roth, who in 2008 was convicted of illegally sending defense technology through Chinese students back to China.
In 2009, Ruopeng Lieu, a researcher at Duke University, passed sensitive technology data to China. The information helped Beijing create the Kuang-Chi Science Ltd, a multibillion metamaterials company engaged in wireless internet and mobile payment fields.
In 2015, Chinese professors were among six defendants charged with economic espionage by the Justice Department. An indictment charged stolen American trade secrets were used to assist Chinese universities and state-run companies in China.
Wessel said 20 percent of those working on advanced artificial intelligence at the Berkeley Artificial Intelligence Research Lab are Chinese nationals. Also, 30 of the 38 post-doctorial researchers at the University of Maryland's Bing Nano Research Group are from China, he said.
"While we should continue to work to contribute to the world's efforts to address the most vexing problems facing the world, we must take greater steps to protect the fruits of our work," Wessel said. "Efforts to infiltrate our universities and labs and exfiltrate their work must be a greater priority."
Van Cleave, the former counterintelligence official, said greater efforts are needed to stem the loss of technology to China.
"Counterintelligence—identifying, assessing, and neutralizing foreign intelligence threats—has been little more than an afterthought in U.S. national security strategy, a legacy of neglect that has cost us dearly in lives lost, resources squandered, and dangers unchecked," she said.
Counterspy efforts currently are divided among the FBI, CIA, and Pentagon. The division has created gaps allowing foreign spies to operate in the United States with impunity.
Congress passed the Counterintelligence Enhancement Act in 2002 to fix the problems, but intelligence bureaucracies resisted the reforms and as a result counterspying has been weakened, not improved, Van Cleave said.
"U.S. counterintelligence is finely tuned to work individual cases, but it is not postured globally to detect, deter, or disrupt the intelligence activities of China or any other foreign power, or to execute strategic counterintelligence operations," she said.
"We know surprisingly little about adversary intelligence services relative to the harm they can do."
Van Cleave urged going on the offense against foreign spies by penetrating and disrupting foreign intelligence organizations before they reach the United States.
The goal is to degrade foreign spy services and their ability to conduct operations against the United States.
"We can chase individual spies or technology thieves case by case, or we can target the services that send them here," Van Cleave said. "In short, we can go on offense but national leadership must be willing to direct and empower America's counterintelligence enterprise to carry out that vital mission."
Joel Melstad, a spokesman for the National Counterintelligence and Security Center, did not directly address Van Cleave's criticism. But he said: "Our workforce remains strongly focused on strategic counterintelligence capabilities."
Melstad said that other than the name change, counterintelligence authorities of the director of the National Counterintelligence and Security Center remain the same as those under the 2002 law.
"And while we must respond to demand signals from our government partners concerning important issues like insider threats and leaks, we have not lost sight of the larger strategic CI goal," Melstad said.
The hearing was a joint session of the committee's research and technology subcommittee and oversight subcommittee.
Oversight subcommittee chairman Ralph Abraham (R., La.), told the hearing China is the most aggressive at stealing U.S. technology but the problem involved other foreign nations as well and the activities must be stopped.
"Essentially, China steals our fundamental research and quickly capitalizes by commercializing the technology," he said.
Research and technology subcommittee chairman Rep. Barbara Comstock (R., Va.) said the theft of American technology is a serious problem.
"It is imperative that our academic institutions not close their eyes to the very real threat posed by foreign intelligence spies," she said. "They cannot be blinded by naiveté or ignorance when distinguishing between friend and foe."

China connection persists/Canada


China Connection Persists


Related image


REVELATIONS concerning the connections Prime Minister Jean Chretien has to CITIC, the investment arm of the Chinese People's Liberation Army (PLA), seems to have stirred up the emotions of a great many of you.  

Good. That is as it should be.  

But there's oh, so much more than what was reported in this space two weeks ago.  

Chretien's son-in-law, Andre Desmarais runs the huge Quebec-based Power Corp. He also holds a seat on the board of CITIC, described as the investment arm of the PLA and, through its subsidiaries, one of the largest, if not the largest, manufacturers of weaponry and armaments in the world. Need weapons for a small war to crush the democratically elected government, Burma? No problem, call CITIC. Pakistan developing nuclear weapons? No sweat. CITIC's right there to help out. Hey Saddam, how've ya been?  

Also on the board is Li Ka-Shing, one of the world's wealthiest men and mentioned in both Canadian and American intelligence reports as connected to the Triads in Hong Kong and the government of the People's Republic of China (PRC). Classified RCMP intelligence reports described and alleged Li to be one of the most powerful gangsters in the world in the late 1980s. In fact, the Royal Hong Kong Police asked CSIS to investigate Li here in Canada in 1988 and the request was officially denied. Now, why do you suppose that happened?  

Indeed, U.S. Congressman Dana Rohrabacher said, "The U.S. Bureau of Export Affairs, the U.S. Embassy in Beijing and the Rand Corporation ... have identified Li Ka-Shing and Hutchison Whampoa (Li's primary business) as financing or serving as a conduit for Communist China's military for them to acquire sensitive technologies and other equipment."  

You'll also recall from the discussion two weeks ago, that Li owns Gordon Securities, the company Chretien worked for during his brief sojourn from politics while John Turner was leader of the federal Liberals. A time period during which the PM made himself a tidy little fortune.  

Desmarais was appointed to the board of CITIC in 1997 and this past spring secured 4% of the Chinese company.  

I should also tell you at this point, that Li was involved in initially setting up CITIC back in the late 1970s.  

Li and Macao gambling tycoon, Stanley Ho, (he of the palatial monstrosity at the entrance to Stanley Park) were two primary targets in the now abandoned joint CSIS/RCMP project Sidewinder.  

The closure of the Sidewinder project has resulted in accusations of political interference from the Prime Minister's Office, which are now supposedly being investigated by the CSIS civilian watchdog agency SIRC. Their report, initially due this month, has now been delayed until some time late in the year at best.  

Investigators with the RCMP are suggesting this is due to the upcoming trade mission to the PRC by Chretien and sponsored by a Chinese/Canadian business organization that Desmarais also has a hand in. Chretien is scheduled to be the keynote speaker to the group while in the PRC in November.  

As a side note, this trade mission, not to be confused with just another junket, is the seventh such trip in as many years by Chretien. Despite all the ballyhoo whenever these trips are done, all the phony contract signings depicted as though they are the direct result of the hard work done on these junkets, uhh, trade missions, the trade imbalance between the two countries is still huge. In fact, the trade deficit between Canada and the PRC stands at a whopping $6,260,967,000.  

Back to the SIRC report. One of the members of SIRC and responsible for determining whether the PMO interfered in Project Sidewinder, is former Ontario premier, Bob Rae. You know the guy who single-handedly destroyed the economy of the industrial heartland of Canada. No easy feat either. The same Bob Rae, who has recently been in the news for mediating, so to speak, the lobster dispute in Burnt Church. Just can't seem to keep his snout out of the government trough.  

Bob's brother may be the source of some of the government largesse he receives. You see, Bob's brother John, is the campaign manager and senior adviser to none other than Jean Chretien. He is also a senior executive in Power Corp.  

He is a very powerful back room boy with the federal Liberals and part of a small circle of people who really run this country.  

Now Bob Rae, while he occupied the office of the Premier of Ontario, is believed to have met Li and Ho.  

In fact, he and his party is believed to have benefited from political donations emanating from Canadian companies controlled by both Li and Ho, the very thing Sidewinder was investigating. 

Now follow me here:  

Project Sidewinder was investigating political corruption and influence peddling by Asian gangsters and businessmen acting as agents of the government of the PRC. Sidewinder was shut down prematurely and all associated documentation was ordered shredded. Investigators screamed political interference by the PMO.  

A sanitized version of Sidewinder is produced under the code name "Echo." The real version was not all destroyed as it was ordered to be. Li and Ho were primary targets. Li sits with PM's son-in-law on the board of CITIC. Li employed the PM prior to his election to that office.  

Public reports on the Sidewinder scandal force SIRC to announce a review. One of the people responsible for the review is directly connected to the PM's close circle. He also may have benefited from the very type of influence peddling and corruption Sidewinder was about while in office. He also directly represents the government on issues like Burnt Church.  

The SIRC report is inexplicably delayed just while the PM is planning another trade mission to China set up by his son-in-law.  

There's a whole lot more than this space allows. So excuse me while I go and check the legal definition of "conflict of interest" and "breach of trust."

Friday, April 20, 2018

Project Sidewinder [redux] in 2018

Image result for Li Ka-Shing
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Sidewinder



Secret
RCMP-CSIS Joint Review Committee
Draft Submission
SECRET
Joint RCMP Study
Information as of
24 June 1997
Translated text
Chinese Intelligence Services 
and Triads Financial Links in Canada
Draft Submitted
 to the RCMP-CSIS 
Joint Review Committee
24 June 1997
TABLE OF CONTENTS
Table of Contents  (Note: pages are for the original document not on this HTML)
i
Foreword
iii
Summary
iv
Introduction
1
Beijing's Strategic Alliances, or the lessons of Sun Tsu
1
Immigration to Canada
3
Hundreds of Canadian Companies "Made In China"
4
Case Studies 
5
-Multinationals
CITIC (Canada)
5
Norinco and Poly Technology (Poly Group)
5
-Banks and financial institutions
CIBC and the Hong Kong Bank of Canada
6
Wood Gundy, Merrill Lynch and Gordon Capital Corp.
6
-High technology
Semi-Tech Corporation
7
China Huaneng Group, Unipec Canada and Goldpark China Ltd.
7
-Entertainment and Media
Charles Y. M. Kwan Promotions
8
North American Studios
8
China Vision and Fairchild Entertainment
8
Hong Kong Telecommunications and Wharf Cable Ltd.
9
-Food-Services industry
Tai Foong International 
9
-Real estate and hotels
Grand Adex Properties Inc. and Concord Pacific Development Corp.
9
World Financial Properties
10
Ramada Hotels, Harbour Castle (Toronto) and others
10
-Universities and research centers
University of Toronto and University of Western Ontario
10
Chinese Intelligence Services Penetration of Canadian Companies
11
Interference by Financing of Canadian Political Parties
11
The Importance of the Chinese Diaspora
12
Consequences for Canada
12
Recommendations
14
Appendixes
-Appendix I:      Annual number of certifications of permanent residence in Canada for persons
                        from Hong Kong since 1990:  "entrepreneur" and "investor" categories
15
-Appendix II:      Annual breakdown of the choice of province by permanent residents from 
                        Hong Kong "entrepreneur" and "investor" categories
16
-Appendix III:     Origin and Description of the Triads
17
-Appendix IV:    Description of a Typical Triad Member
Profile A: Young Adult
20
Profile B: Mature Member
21
-Appendix V:    Guanxi or networking
22
-Appendix VI:   The Chinese Diaspora
23
FOREWARD
     In May 1996 a joint project was initiated by the RCMP Criminal Analysis Branch and the CSIS Analysis and Production Branch to assess the extent of the threat posed by the acquisition and control of Canadian companies by members or associates of triads and with affiliations to the Chinese Intelligence Services. The research team quickly realized that the initial premise was the tip of the iceberg with only a minute portion of a much more complex situation showing. It should be stressed that this report is a prospective document that makes to claim to provide a full survey of the issue; in fact, quite the opposite.
     This document does not present theories but indicators of a multifaceted threat to Canada's national security based on concrete fats drawn from the databanks of the two agencies involved, classified reports from allied agencies and various open sources. This study has departed from the conventional and sometimes confining approaches followed by our respective methodologies. Although both organizations have fairly extensive expertise on Chinese matters, it is nevertheless very different. It is clear at the end of this exercise that both organizations have gained from cooperating on this research. When put together, these two bodies of expertise complement each other, providing a broader and more substantial perspective of the Chinese issues. (S)
     The scope of the problem found after a few weeks of research dictated that the initial research results had to be presented in the form of case studies. At the moment, we estimate that over 200 Canadian companies are under the direct or indirect control of China. Although it was impossible to do all the research within the parameters initially given; however, sufficient details have been found to reveal the threat. It should be reiterated that this report presents concrete facts, not just ideas or speculation. We trust that we have demonstrated the need to continue the work within a broader and more elaborate framework. (C)
Chinese Intelligence Services and Triads
Financial Links in Canada
SUMMARY
     Since the mid-1980s, a substantial immigration flow from Hong Kong has taken place and Canadian authorities were first alerted when a significant presence of Chinese organized crime elements among this group was detected. Many came through the "entrepreneur and "investor" immigration program and some of these criminals even have succeeded to obtain their Canadian citizenship. Although not all immigrants in these categories are suspected, two particular groups of individuals raised attention. Two other groups have also taken advantage of the "entrepreneur" and "investor" categories to immigrate and to invest in Canada. First, a certain number of very rich Hong Kong Chinese business people (tycoons) who are known to have been cooperating with the Chinese Government for years. Then a group composed of associates and relatives of China's leadership and the Chinese Intelligence Service (ChIS). Intelligence reveals that certain individuals of these three groups have been working for over fifteen years in concert with the Chinese government, and some of their "financial ventures" in Canada serve to conceal criminal or intelligence activities. (S)
    Hand in hand with this situation, the ChIS [Chinese Intelligence Service] make very active use of their access to Canadian industries through exchanges of specialists and students, and also set up shell companies to pursue their acquisition of economic and technological intelligence. Cooperation between the Hong Kong tycoons, the triads and the Beijing leadership adds a new dimension to the well known "mass line collection" strategy followed by the ChIS. This situation substantially raises the level of the potential threat, revealing the effectiveness of Chinese efforts to obtain Canadian technology and their capability to interfere in the management of the country. Central points and essential for the understanding of the problem are the cultural singularities that characterize the Chinese as the concepts of "debt of honour", "duties", "Hou Tai or backers" and "Guanxi or connections." ) (S)
     By using these alliances, the Chinese government is trying to gain influence on Canadian politics by maximizing their presence over some of the country's economic levers. To that end, they proceed initially to buy and/or legally set up a company in Canada that, once under their control, buys other companies and so on. An effective domino effect ensues that acts like a well-spun web or network at strategic points. It is estimated that over 200 Canadian companies have passed into Chinese influence or ownership since the early 1980s through the triads, tycoons or China national companies. These businesses are found in various sectors of the economy, ranging from multinationals to banking, high technology and real estate (CITIC, Norinco, Husky Oil, Grand Adex Properties Inc, Merrill Lynch, Gordon Capital, Inc, Tai Foong International, CIBC, Ramada Hotels, China Vision and Semi-Tech Corporation, etc.). The triads' companies are also used to pursue their criminal activities, such as money-laundering and heroin trafficking, as well as assistance to the ChIS.  (S) 
     Being Canadian these businesses are also eligible to receive government subsidies for research or classified contracts from Federal Departments. The risk is that after the research is done, there results can be transferred to China. Other form of risk is with the access gain through classified contract. As an example, a Canadian company under Chinese influence was in contention for a contract to set up and run a classified communications system linking the main agencies of the Canadian intelligence community. A company in Toronto specializing in video surveillance was originally Canadian, but was bought by  a Chinese multinational. It is impossible at present to say how many or which Canadian companies are in the same situation. These examples, however, raise questions about the integrity of some companies that have already installed security systems for various Canadian government institutions or Canadian research industries. (S)
     Significant portions of some large Canadian urban centres are also owned by Chinese entrepreneurs. For example, it is estimated that Li Ka-Shing owns with his son at least one sixth to one third of downtown Vancouver.  (S)
    These "corporate" figures have become an influential presence on the political and economic landscapes of Toronto and Vancouver and at the provincial and federal levels. The triads, the tycoons and the ChIS have learned the quick way to gain influence is to provide finance to the main political parties. Most of the companies identified in this research have contributed, sometimes several tends of thousands of dollars, to the two traditional political parties, that is, the Liberal and the Progressive-Conservative Parties.  (S)
The Chinese leadership continues to gain much direct or indirect influence over the Canadian economy and politics. Having bought significant real estate holdings and established businesses in Canada, China has obtained access to influential figures who are now or once active at various levels of Canadian society. In many ways, China remains one of the greatest ongoing threats to Canada's national security and Canadian industry.  (S)
"Be so subtle that you are invisible. 
             Be so mysterious that you are intangible. 
     Then you will control your rival's fate."
Sun Tzu, 
                                The Art of War (c. 509 BC)
INTRODUCTION
1. With the announcement of the return of Hong Kong to China in the mid-1980s, Canada witnessed the arrival of a substantial immigration and capital flow from that region. For example, between January 1990 and March 1997, 233,077 Hong Kong residents emigrated to Canada, of whom nearly 70,0001 were in the "entrepreneur" or "investor" category. This exceeded the "family" category over the same period. Although the great majority of these migrants were legitimate, the Canadian authorities detected a significant presence of Chinese organized crime elements, among them, namely the triads and their associates, some of whom succeeded in obtaining Canadian citizenship.2  (S)
2. Some wealthy Hong Kong Chinese investors and Chinese from Mainland closely affiliated or related with the country's leadership and the ChIS also took advantage of the "entrepreneur" and "investor" categories to emigrate in and invest in Canada. Few even bought or established companies on Canadian soil through family members who had obtained Canadian citizenship. Intelligence indicates that these specific individuals with these three groups: triads, Hong Kong investors and people close to China's leadership, have been identified working with concert with the Chinese government to gain influence through some of their "financial ventures" in Canada. Some companies which are also used to conceal criminal or intelligence activities. At the same time, the ChIS use their access to Canadian businesses through exchanges and technical or student visas to steal classified and technological information. They have gone so far as to set up shell companies to pursue their economic and technological information acquisition operations.  (S)
3. A new triumvirate was born. This cooperation between Hong Kong Chinese business people, the triads and the Beijing leadership adds a new dimension to the known mass line collection strategy followed by ChIS.  Economic, political and security indicators based on factual data revealed the potential threat and efforts made by the Chinese to obtain Canadian technology, but above all to obtain influence over economic levers and prominent Canadian figures.  (S)
BEIJING'S STRATEGIC ALLIANCES, OR THE LESSONS OF SUN TZU
4. When Deng Xiaoping came to power in the late 1970s, he introduced his economic reforms with the slogan "to get rich is glorious."  To achieve that end, he had to move China onto the international markets. The isolationism of the former regime, however, handicapped the Chinese leadership. It therefore turned to the richest Chinese business people of Hong Kong, including, among many others, Li Ka-Shing, Henry Fok Ying-Tung, Wang Foon-Shing, Stanley Hoand the man who would eventually be chosen by Beijing to head Hong Kong after the departure of the British, Tung Chee-Wa (C.H. Tung). On 23 May 1982, Li Ka-Shing and Henry Fok met with Deng Xiaoping and Zhao Ziyang in Beijing to discuss the future of the peninsula. Their task would be to advise and educate the Chinese authorities about the basic rules of capitalism. In return, Beijing gave them privileged access to the vast Chinese economic basin. These powerful international financiers played an important role in the preparations for the transfer of Hong Kong. (UC)
5. In 1984, the British Government of Margaret Thatcher announced that it would return Hong Kong to China on 1st July 1997. This was not news to the Chinese or the rest of the world since a treaty signed nearly a century before had stipulated that Hong Kong was to revert to China in 1997. The reality of the impending transfer, however, created insecurity that was strengthened by the tragedy of Tiananment Square in June 1989. That incident made Beijing realize more than ever that it would have to prepare the ground for its arrival not only with regard to the financial community but also the population. In the late 1980s, Western intelligence services reported the very active presence in Hong Kong of the United Front Work Department (UFW).4  For that purpose, the UFW was given the responsibility among other things for building alliance with the triads already affiliated with many business people. As early as 1992, Western intelligence services knew that, Wong Man Fong, formerly Head of the New China News Agency, was instructed to inform the triads bosses that if they agreed not to jeopardize with the transition process and the normal business in Hong Kong, Beijing would assure them that they will be allowed to pursuit their illegal activities without interference.5   The Beijing authorities also created a front company in Hong Kong for Wong Man Fong to facilitate his contacts with the triads and so assist triads groups set up legitimate business in China, particularly in Guangzhou and Shangai.6  Following these negotiations, Deng Xiaoping himself was speaking of the triads as Chinese "patriotic groups", and the Hong Kong press published a photograph of Charles Heung, a senior officer of the Sun Yee On, conversing with the patriarch's daughter.7  At the same time, Interior Minister Tao Siji indicated that there were patriotic members among the triads and they were welcome to do business in China.  (S)
6. The political class has also been targeted by Beijing's leaders. Without any doubts for the communist masters it was essential to obtain the cooperation of key elements of influential local personalities. Their collaboration or their resistance in China's requests before July 1st was going to make the difference between the possibility to do business with China after the transition. To achieve this, political and business people have been approached and enthusiastic collaborators received positions within various transition committees. For example, in early February 1997, Rita Fan Hsu Lai-Tai was appointed by Beijing, chair of the Hong Kong Special Administrative Region (SAR) Provisional Legislative Council (LEGCO). Mrs. Fan Hus has been identified as a secret cadre of the Chinese Communist Party and an associate of Albert and Sonny Yeung, both officers of the Sun Yee On triad. She is also the daughter of one of the leaders of the Shanghai Triad criminal organization known as the Green Gang before the communist takeover in 1949. This group was known for its political assassinations on behalf of another triad boss, Chiang Kai Shek.(S)
IMMIGRATION TO CANADA
7. Canada has always been a preferred destination for the people of Hong Kong. It is estimated that 100,000 Canadians live on the peninsula, and most of them are natives of the city. Hong Kong alone has been for the last 10 years the top source of immigration to Canada, with over 500,000 Hong Kong people now living here and accounting for 22 percent of all immigration to Canada. Over half of the 66,000 persons who left Hong Kong in 1996 came to Canada. To that must be added 17,000 students, amounting to a fifth of all foreign students in Canada. (C)
8. Among legitimate immigrants in recent years, some persons affiliated with or members of the Chinese triads have succeeded in slipping in and obtaining Canadian citizenship. Several triad officers 9 and their associates even have family members residing in Canada. Their choice of Canada was no accident. This country is an excellent place to invest in companies to launder the profits derived from criminal activities while securing a portion of their assets outside Hong Kong and obtaining a Canadian passport. Most of these individuals are members or associates of the upper echelons of the triads and own or run large businesses in Hong Kong. As part of their secret agreements reached with the Beijing leadership,10 these triads now use their Canadian acquisitions to engage in intelligence activities, such as intimidating individuals, identifying potential sources of facilitating visit of Chinese delegations on behalf of China. (S)
9. Two other types of investor represent another danger to the Canadian economy, namely, the rich Hong Kong Chinese business people and leaders of the Chinese civilian and military authorities of China. Like the "entrepreneurs" affiliated with the triads, Chinese investors from Hong Kong or Beijing have taken control of Canadian companies in various sectors of the economy. Some of these businesses have even obtained Canadian government classified contracts. The threat is more significant because the strategic alliance between the Beijing leadership and Hong Kong tycoons is reinforced by the powerful ethnic and cultural ties associated with guanxi.11This concept rules the links, the obligations or duties and the type of relations between individuals and is a characteristic of the Chinese culture. (S)
10. In all three cases, their commercial activities have enabled them to develop a position in the Canadian economy that affords them the opportunity to engage in intelligence activities, such as illicit transfer of technology, foreign influence and interference, identification and cultivation of persons favourable to China, and the acquisition of undue control in important Canadian economic and political circles. (S)
11. Even before Hong Kong's official return to the Communists, it was established by several Western agencies that their national immigration systems had been affected by illegal ChIS and triad interference. Laurence Leung Ming-Yen, a former director of the Hong Kong immigration service, is still under investigation after he had to resign under the pressure of allegations of corruption and illegally disclosing confidential information about residents of the peninsula. The controversy surrounding Leung was fed by his business relationship with the flamboyant tycoon Tsul Tsin Tong, well known for his pro-Beijing views and a member of the notorious Chinese People's Political Consultative Conference and Preparatory Committee. The murder of Leung's young daughter in Vancouver in 1993 by a crossbow bolt has still not been solved. The Vancouver police suspect the crime was committed by triad members. 
12. In 1996, an extensive special investigation within the American immigration service led to the arrest of two former heads of this service stationed in Hong Kong. Jerry Wolf Stuchiner was found in possession of illegal Honduran passports12 and was recently released after he accepted to collaborate in the trial of James DeBates.13   James DeBates and his wife Heddy, an American of Chinese origin, were also arrested  and questioned regarding their involvement in Stuchiner's activities and the illegal entry of Chinese immigrates into the United States. Canada has unfortunately its share of difficulties. Different cases were investigated and like the case of Robert Geddes, a former citizenship judge, whom was charged in May 1997 with 33 counts of fraud and misrepresentation in 13 known cases involving Hong Kong Chinese.
13. Analysis of the destination of immigrants broken down by Canadian province is an indicator of the concentration of the activities of these groups. Between January 1990 and March 1997, 39.1 percent of the persons registered in the entrepreneur and investor categories chose to settle in British Columbia, particularly in the south Fraser Valley. Ontario for its part received 28.5 per cent of immigrants, who settled mainly in the Toronto area. This pattern is explained by the large, long-established Chinese communities in these areas which are essential in the activities of the triads, Chinese investors and ChIS. Under the same program, 20.6 per cent of such immigrants settled in Quebec while Alberta received only 7.3 per cent. (S)
HUNDREDS OF CANADIAN COMPANIES "MADE IN CHINA"
14. The influx of Chinese investors who are affiliated with the triads or new associates of Beijing poses a new challenge to Canada's national security. The central point of the strategy of the Chinese is first to buy a Canadian company so as to obtain a "local identity", legally concealing subtly their foreign identity. Then, using this acquisition, the Chinese-Canadian company invests heavily or buys other companies in various economic sectors, but always under the Canadian banner. In actual fact, control lies in Hong Kong or Beijing, and the financial benefits or fruits of research, often paid for by Ottawa or the provinces, are likely to make their way to Asia. (S)
15. Hand in hand with their ethnicity and their commercial ambitions, the financial network of the Chinese entrepreneurs associated to the organized crime and to the power in Beijing has grown exponentially and very rapidly in Canada. Their influence over local, provincial and national political leaders has also increased. In the game of influence, several of these important Chinese entrepreneurs have associated themselves with prestigious and influential Canadian politicians, offering them positions on their boards of directors. Many of those companies are China's national companies.
16. The analysis of the information demonstrates that their attention was not initially directed towards sensitive sectors like high technology or other even more sensitive areas, but towards what might be called "soft" sectors such as: real estate, hotels, transportation, oil companies and travel agencies. Commercial sectors that at first sight do not involve any security risks and did not attract the attention of the Canadian services responsible for security. The scale of their ventures or investments has now made them some of the most important figures present in the major centres, and their decisions to invest in one place or another are not a matter of indifference to anyone. Such projects are seen by the local or national business community as a "favour" or a "chance" not to be missed. (S)
CASE STUDIES
17. It is estimated at the present time that over 200 Canadian companies are under Chinese control.  These business are to be found in myriad sectors of the economy, ranging from multinationals to banking, high technology and real estate.  Some typical cases are presented here to illustrate the various scenarios that are clearly worrying for Canadian security.  At first site, these individual cases do not seem to be a great threat.  It becomes, however more disturbing when the ownership links between various sectors of Canadian enterprises are revealed.  (S)
Multinationals
18. CITIC (Canada)   China International Trust Investment & Company  (China International Trust & Investment Corporation) is the largest Chinese operating internationally.  It has subsidiaries operating in several Western countries, including the United States and Canada (Vancouver).   Founded at the end of the 1970s, it now has assets worth US$23 billion.  Its subsidiary in Canada CITIC BC Inc., opened it doors in 1986.  By 1995, it reported a turnover of CDN$250 million (1995).  The projections for 1996 aimed for $290 million. (UC)
19.  CITIC was initially established to encourage foreign investment in China.  It has since taken the lead in Chinese investments outside China, in all areas from real estate to electronics.  In 1979 Beijing appointed to CITIC's board of directors three Hong Kong financial giants, Li Ka-Shing, Henry Fok Ying-Tung and Wang Foon-Shing.  With their assistance, in the following years, the Beijing acquired important companies such as Cathy Pacific Airlines, Hong Kong Telecom and Star TV.  In Canada, it is estimated that CITIC has invested nearly $500 million to buy up businesses in certain areas, such as Celgar Pulp Mill in British Columbia, Nova Corp Petrochemical in Alberta, real estate through Hang Chong Investments Ltd. and hotels.  Eventually, CITIC developed also close business links with Power Corporation.  (S) 
20.  CITIC recently attracted American media attention in the scandal over illegal contributions to the US Democratic Party and influence-peddling by the Chinese government (see section below).  CITIC, China Resources and the Lippo Group (in which in both Li Ka-Shing is a large shareholder) are at the centre of the affair.  CITIC chairman, Wang Jan, is also chairman of Poly Technology (see  next section).  CITIC has repeated the gesture by contributing through its Canadian subsidiaries to Canadian Political Parties.  (UC)
21.  Norinco and Poly Technology (Poly Group).  Northern Industrial Corporation (Norinco) and Poly Technologies (a subsidiary of  Poly Group) are both owned by China and under the control of CITIC.  They have subsidies around the world, including Canada (Montreal) and the United States.  Poly Group was until recently head by Deng Xiaoping's son-in-law, He Ping, and is part of the entrepreneurial drive of the People's Liberation Army (PLA).  Several large quantities of arms manufactured by Norinco have been confiscated on Indian reserves, especially those of the Mohawks.  In May 1996, US authorities what they described as the biggest arms seizure on American soil, confiscating 2,000 AK-47assault rifles and other military weapons from a warehouse in California.  The US-based Chinese representatives of Poly Technologies and Norinco were arrested in connection with this affair.  Although the final destination of the arms has not been determined, the Amerindians "Warriors" and American militia trails are strongly suspected by US authorities.  (S)
22.  In another incident, the Rex International Development company of Hong Kong, in which Norinco is the majority shareholder, is currently under investigation possibly subject to prosecution for exporting components for the manufacturing of chemical weapons to Iran.  Rex was established in 1982 as a joint venture with Norinco by Tsui Tsin-Tong, a financial partner of Li Ka-Shing.  Tsui filed an application to emigrate to Canada in 1985 which has been renewed several times.  His case is still not settled because he has never satisfied the Canadian authorities by providing adequate explanations of his contacts with the PLA and the ChIS.  Silver City Development Ltd., which holds shares in Rex, has been used for several years by the ChIS and the Chinese leadership as an investment front and cover.  (S)
23.  Through the power of its multinationals industries and the billions of dollars they generate, China has been able to establish itself in the Western economy.  This gave to the country an enormous advantage in the pursuit of gaining influence.  In return through these subsidies and influences, they are able to open channels to facilitate access to Western power and traffic of illegal weapons and technology.  (S)
Banks and financial institutions
24.  CIBC and the Hong Kong Bank of Canada.  The banking industry is one if not the most important economic leverage in this country.  To control or to be able to influence the actions of a bank gives to a single or a group of important shareholders a very influential and privilege position in our society.  In this domain, Canada might be in a disadvantage position.  Of the G-7 countries, Canada has the fewest banks that is five major institutions including the CIBC which in return creates the highest concentration of assets in the same hands.  Banks, as a whole, hold 57 percent of industrial shares,  54 percent of private deposits and 65 per cent of personal credit.  Some analysts predict that the Canadian banks will hold 70 percent of the mutual fund market by the year 2000. (UC)
25. Rich investors like Li Ka-Shing and even the Chinese regime itself got interested in the 1980s to invest in banks and Canadian banks too.  Li Ka-Shing owns 10 percent of the CIBC, which is the largest single individual share holder.  He is also in partnership with the CIBC in many companies like development projects like of the land of Expo 86 in Vancouver (CDA $3 Billion).  This bank seems to be particularly used by Chinese investors.  The 1980s saw several bank acquisitions and mergers in this country.  The Continental Bank was sold to Lloyds Bank Canada which in turn was bought by the Hong Kong Bank of Canada.  The latter is the sixth largest bank in Canada, and the largest foreign one.  In 1986, it acquired the Bank of British Columbia.  Li Ka-Shing and Stanley Ho14 are share holders and on the Board of Directors of the Hong Kong Bank in Hong Kong which owns the subsidiary in Canada.  The Government of China is also a share holder of that bank.  (UC)
26.  Wood Gundy, Merrill Lynch and Gordon Capital Corp.  Other important financial sector linked to banks is the brokerage house business.  In Canada, it is dominated by a few large banks.  In 1993, eight of the largest Canadian brokerage institutions were owned by five banks and controlled 70 percent of the securities market.  In 1988, CIBC bought 65 percent of the shares of Wood Gundy at a cost of CDA $190 million, or three times the book value.  (UC)
27. In 1990, the CIBC took over Merrill Lynch Canada, one of the eight largest Canadian institutions.  Merrill Lynch International is owned by Thomas Fung (see below, China Vision) and Li Ka-Shing business associate.  Another prestigious old Canadian firm is Gordon Capital Corp. became 50.1 per cent owned by Richard Li, son of Li Ka-Shing, in October 1995.  That is two years after Richard began to work for the firm.  After Richard joined the board, William (Ken) Davidson, former vice-president and executive director of the CIBC, received a promotion to the board, and Bob Fung the position of vice-president.  His son Mark often travels on Team Canada trips to Asia.  Again, it is not only the financial leverage that should be noticed but the gain of influence this sector offers.  (S)
High technology
28.  Semi-Tech Corporation.  Semi-Tech Corporation is a Canadian multinational corporation based in Markham, Ontario.  It was formed from various public companies listed on several shock exchanges, including Toronto, Montreal, New York,  Tokyo, Osaka, Nagoya, Frankfurt and Hong Kong, and has revenues of over US $3.5 billion.  This corporation, and its chairman James Ting in particular, have business ties with China.  Stanley Ho is the principal shareholder through his company Shun Tak (Hong Kong) and sits on Semi-Tech's board.  (UC)
29.  This company has concentrated in particular on information technology, establishing Semi-Tech Microcomputers Ltd., Semi-Tech MicroElectronics Corp., Semi-Tech Electronics, Singer and STM Systems Corp.  The last of these was established by the merger of Data Crown (Canada) and Canada Systems Group, two companies that count various federal government departments among their clients and some of whose employees are regularly in contract with Chinese diplomatic representatives.  Of particular note is the fact that Canada Systems Group had applied to undertake the development of COSICS, the Canadian On-line Secure Information and Communication System that was to link the Department of External Affairs, the RCMP, CSIS and National Defence.  The project was suspended by the federal government due to the lack of financial resources.  (S) 
30.  China Huaneng Group, Unipec Canada and Goldpark China Ltd.  On January 1997 Canadian newspapers announced that the Chinese companies China Huaneng Group Group Hong Kong Ltd. (CHG(HK)) and China International United Petroleum and Chemicals Co. (Unipec) had concluded an agreement whereby Huaneng would buy 70 percent of the shares of Unipec Canada Ltd.   Unipec Canada Ltd., in turns, holds 57 percent of the shares of Goldpark China Ltd. of Toronto which, holds exclusive world rights for the productions of photographic security systems.   CHG(HK) is a subsidiary of the fifteenth largest Chinese State Company, China Huaneng Group.  Unipec for its part is a giant of the Chinese oil industry which has sought in recent years to diversify its activities.  It is also famous for the many lawsuits against it and for its illegal transactions involving large arms sales to Iraq for oil.  (UC)
Entertainment and Media
31.  It has been known for several years that the Hong Kong triads, particularly Sun Yee On, control the Chinese entertainment industry.  In Canada, some promotion companies with affiliations to Chinese organized crime and the ChIS have organized tours for artists from China and Hong Kong.  Significant investments have also been made by these groups in the Canadian Chinese-language media, including the Chinese-language television industry which is integrated into the general Canadian television system.  (S)
32.  Charles Y.M. Kwan Productions.  Charles Kwan Yee Man15 has been active in the Asian live entertainment business industry for years through his companies, including china Cultural Promotions Limited and Charles Y.M. Kwan Promotions Inc.  In the course of his business activities Kwan is regularly in contact with prominent members of the Hung Lock and Sun Yee On triads.  He also maintains relations with the Chinese Free Masons (CFM) in Toronto which have always been used by the ChIS to identify potential sources and promote Chinse policies.  (S)
33.  North American Studio (Canada).  Although this company closed its doors in 1996, it was well known in police circles for its criminal origins.  Also using the names North American (Canada) Motion Picture Corp. and North American (Canada) Television Corp., this company has been under the control of the Sun Yee On triad since its beginning.  The firm attracted media attention recently as a result of the legal sage of Miranda Yuen, an employee of North American Studio and the ex-wife of the top boss of the Wo Hop To triad.  In the early 1990s, members of the Sun Yee On triad bought a warehouse in Markham, Ontario which was converted at a cost of $7 million into a film and television production studio.  The group has since been the subject of ongoing investigation by police authorities in connection with certain criminal activities.  Some of the company's executives were regularly in contact with representatives of the Chinese diplomatic missions in Canada and were regularly involved in Canadian political circles like servings as intermediaries in organizing a dinner between the mayors of Shanghai and Toronto.  (S)
34. China Vision and Fairchild Entertainment.  China Vision is a pay-TV station in Toronto, established by Francis Cheung in 1981.  In 1991 it had about 110,000 Canadian subscribers of Chinese origin in the Toronto, Edmonton, Calgary and Vancouver areas.  Pro-democracy groups across Canada submitted briefs to the CRTC alleging that Cheung received financial assistance from the Chinese government, and that China Vision's reports on China were approved and influenced by the government of that country.  (UC)
35.  In 1992, the CRTC entertained an initial offer of purchase for China Vision.  This offer was made by John Sham, a Toronto resident, Hong Kong film promoter and an employee of Television Broadcast Ltd. of Hong Kong.  Sham is an associate of Charles Heung, a senior officer of the Sun Yee On triad.  The potential buyers of China Vision included John Sham and North American (Canada) Television Production Corporation, which was affiliated with the Sun Yee On triad.16  This offer was withdrawn following information given to the CRTC by Canadian authorities.  (S)
36.  In 1993, Thomas Fung of Fairchild Communication Ltd. of Vancouver submitted an offer to purchase China Vision to the CRTC for CDN $9.25 million.  Fairchild Communications Ltd. is 80 per cent owned by Happy Valley Investments Ltd., also of Vancouver, and 20 per cent by Television Broadcasts Ltd. of Hong Kong, the largest global producer of Chinese-language programming.  Various Canadian groups of Chinese origin opposed Fairchild's purchase offer because they were concerned that this sale would open the door for the Chinese government to influence Canadian television news broadcasting.  They argue the station would be vulnerable to political pressure from the Chinese government, especially after 1997, and because the Hong Kong media often practiced censorship where China was concerned for fear of offending the government of that country.  Although the CRTC shared some of the groups' concerns, in October 1993 it approved the purchase of China Vision by Fairchild Communications Ltd, granting it a license for four years.  It should also be pointed out that Fung has bought an important amount of shares in Hollinger and Southam, two press giants in Canada.  (C)
37.  Hong Kong Telecommunications and Wharf Cable Ltd.  In March 1997, these two companies formed in consortium with Li Ka-Shing's Hutchinson Whampoa Ltd., Cheng Yu-Tong's New World Development Co. and Heung (Jimmy) Wah-Shing's Win Film Co.  Jimmy Heung is known in Hong Kong as a senior officer of the largest triad, Sun Yee On.  He is the younger brother of Heung Wah-Yim, the Dragon Head of this group, who was officially identified in 1992 by the US Senate's Standing Committee on Asian Organized Crime.  The output of these companies is used by the Canadian Chinese-language media.  It should be noted that the company was bought by another Hong Kong company, Fairchild Communications, and CITIC is also the owner of Hong Kong Telecom.  The productions of all the above mentioned companies are used by the Canadian Chinese language media.  This transactions highlights well the close relationship among Chinese business people, the triads and China's power.  (S)
Food-Services industry
38.  Tai Foong International.  Triad members or their associates are also involved in the food-services industy, witness the example of Tai Foong International of Mississauga, Ontario.  The company's chairman and managing director, David Lam, is affiliated with the Kung Lok triad.17  Tai Foong International sells seafood around the world.  The company has offices in Vancouver, Calgary and Montreal with headquarters in Mississauga.  It has divisions in the United States, specifically Las Vegas and Seattle, and in Hong Kong.  According to our information, Tai Foong International is believed to be involve in importing heroin into Canada from Hong Kong.18  In addition, various members of the management have for several years maintained regular contacts with Chinese trade and military representatives in Canada, organizing meetings, paid visits of Chinese delegations and so on.  Several, including David Lam, have travelled frequently to China on business.  (S)
Real estate and hotels
39.  Everywhere in the world the core of Chinese economic activity is located in large urban centres.  In Canada, the bulk of the country's economy is concentrated around a few large cities only.  Real estate has always been a preferred area for the Chinese, and several have built large fortunes from it.  In itself real estate is not a obvious threat to the security of Canada but it becomes an excellent vehicle to gain access to local politicians and their influence and power.  You own one building is one thing, you own 10 or 30 commercial buildings and your influence is considerable.  If you are located in the heart of the business activities, you are the focus of attention.  The business of centres of Toronto, Vancouver and in part Montreal are now in large portion owned by Hong Kong or Beijing.  (C)
40.  Grand Adex Properties Inc. and Concord Pacific Development Corp.  Grand Adex is wholly-owned by the Kaumo Hui and Li Ka-Shing families.  In 1987, the two tycoons' sons Terry Hui and Victor Li, helped Li Ka-Shing acquire 80 hectares of Expo 1986 land in Vancouver for Concord Pacific.  They are now pursuing a residential development mega-project estimated to be worth $3 billion.  In March 1997, Grand Adex and Concord Pacific repeated the same scenario by going into partnership with the Toronto company TrizecHahn Corp (80 percent foreign own), obtaining a $2 billion project and 18 hectares of prime land west of Skydome in downtown Toronto.  They also obtained an exclusive lease on the CN tower for the next 35 years with two possible 15-year extensions.  At 33, Terry Hui, who has now obtained Canadian citizenship, heads up these two companies and is considered the most important property developer in Vancouver.  (UC)
41.  World Financial Properties.  In 1992, when the Reichman brothers' Olympia and York Development company faced a serious financial crisis, the CIBC was the Reichmans' largest Canadian creditor, and the Bank of Hong Kong the largest overall creditor.  Li Ka-Shing's Dragon Holdings Ltd. acquired 51 percent of Olympia and York Development's New York office towers for $20 million, and, in 1996, bought Olympia with the assistance of the Bronfman family, renaming it World Financial Properties.  (UC)
42.  Ramada Hotels, Harbour Castle (Toronto) and others.  Large hotel chains and almost all the prestige hotels in Canadian urban centres are now owned by Chinese private or state interests.  This is an easy service sector and is used mainly to generate income while increasing property holdings.  Such is the case of the Ramada international chain, owned by Stanley Ho (25 hotels in Canada), the Sutton Place in downtown Toronto, acquired in 1993 for CDA $29 million and the Meridien Hotel in Vancouver.  The Harbour Castle Westin in Toronto was bought by Li Ka-Shing in 1981 at a price of $93 million and a further $20 million payment in 1989.  Other examples, the Carlton Inn and the Carlton Place in Toronto are owned by CITIC.  This, of course, is only a tiny part of what is to be found in Vancouver, Montreal and other Canadian centres.  (S)
Universities and research centers
Sections 43-45 dealing with the University of Toronto and University of Western Ontario are missing from our copy of the report.
Source Notes
 1   See Appendixes I and II, tables on Immigration from Hong Kong
 2   See Project Stopover.  CID/RCMP.
 3   In 1996 FORBES magazine estimated the "official" personal fortune of Li Ka-Shing at US$ 10.5 billion, Henry Fok Ying-Tung
      at $2.5 billion and Stanley Ho at $3.1 billion.  (UC)
 4   The United Front Work Department is one of the five components of the ChIS.    See CSIS Report 95-6/33, The Future of
      Hong Kong: New Dogma, Old Tricks
 5   In May 1996 the publisher of the Hong Kong tabloid Surprise Weekly, Leung Tin-wai, received two individuals in his office at
      height of the day.  They cut off his arms with a kitchen knife because the newspaper was preparing to publish an article 
      unfavourable to Beijing in relation to Hong Kong's return in July 1997.  (UC)
 6   Wong himself recently confirmed this information in a public conference in Hong Kong after defecting to Western authorities.
 7   See Project Sunset.  CID/RCMP 
 8   See Appendix III, Origin and Description of the Triads.
 9   See Appendix IV, Profile of Typical Triad Member.
10  See CSIS report Report 95-6/06, Organized Crime Links to the Intelligence Services of China and Taiwan.
11  See Appendix V, Guanxi or Networking.
12  Several thousands of Hondurian passports were reported stolen last year 
13  Stanley Ho, the Macao casino tycoon, is Honorary Counsel of Honduras in Macao.
14  Stanley Ho holds a monopoly on the six casinos on the Island of Macao which alone bring in US$6 billion a year.  (UC)
15  See Project Shehang.  CID/RCMP
16  See Project Shehang.  CID/RCMP
17  ibid.
18  ibid.
19 
CHINESE INTELLIGENCE SERVICES PENETRATION OF CANADIAN COMPANIES
46.  All areas of the Canadian economy are targeted, but high technology is the one most at risk.  Several cases of theft of Canadian proprietary information and/or technology have been reported to and investigated by Canadian authorities.  For example, Ontario Hydro believes it was the victim of theft of information in the nuclear technology field by an individual of Chinese origin.  This individual sent unauthorized faxes (some containing hours worth of data) to a telephone number in China, associated with the State Science and Technology Commission.  In another case, a Chinese employee of a major computer company based in Canada was accused of copying the company's proprietary information onto diskette, for the purposes of selling the information to China.  In a third instance, a Canadian company alleged that one of their former employees, who had previously served in the Chinese military, stole proprietary information regarding energy technology and sold it to the Chinese government.  (S)
47.  The Chinese government also takes advantage of growing business ties between China and Canada to provide cover for intelligence activities.  For example, a company owned by a Chinese-Canadian sponsored what was ostensibly a Chinese business delegation to come to Canada.  In reality, the "delegation" was comprised of Ministry of State Security officials travelling to Canada to conduct an intelligence operation.  Another delegation that travelled to Canada under the cover of representing a Chinese company was actually composed of officers from a sensitive sector of the People's Liberation Army, who were attempting to make arrangements to purchase secure communications technology for military purposes.  
48.  The ChIS do not hesitate to expend great energy on pursuing their activities.  They have established companies on Canadian soil solely for traditional and economic espionage purposes.  These companies are used as cover for ChIS agents to help gain them an entree into Canadian business circles.  These front companies have been observed to have contacts with the triads in Canada.  (S)
INTERFERENCE BY FINANCING OF CANADIAN POLITICAL PARTIES
49.  One of the means used by the Hong Kong business people and triads associated to Beijing is to seek influence and support among Canadian politicians by financing political parties.  This practice, is not unique to Canada.  Recently, a stir was caused in the US media over the illegal Chinese funding of the Democratic Party.  Over 2,000 American companies suspected of being used by Chinese are currently under investigation by the FBI.  In 1993, Britain was wracked by a similar scandal when over £1.5 million (or nearly CDN $3 million) was donated to the British Conservative Party by Hong Kong financiers such as Li Ka-Shing (CDA $1.8 million), Stanley Ho ($200,000), Tsu Tsin-Tong ($100,000) and even C.H. Tung ($70,000) who is now Beijing's man in Hong Kong.  (C)
50.  Canada also allows "Canadian corporate citizens" to make financial contributions to political parties, but the parties are obliged by the Canada Elections Act to report the amounts.  Many of the companies identified in this research have contributed sometimes several tens of thousands of dollars to the two traditional political parties, the Liberals and the Conservatives.  As examples, in 1994, Merrill Lynch Canada gave the Liberal party $20,432.94.  Between 1991 and 1194, Husky Oil, which is owned by Li Ka-Shing, alone contributed over $100,000 to the same two parties.  North American Studio (Canada), which was affiliated with the triads, also contributed.  Set within their Canadian and regional contexts, the total amount of these contributions to local organizations is substantial.  Further, an "entrepreneur" may have several businesses in an area that will also contribute to the parties' funds.  In the end, large sums are distributed by various hands but from the same wallet.  It is precisely the total amount distributed at several places that makes the interplay of influence and political 'friendships" so important.  (S)
51.  The information presented here represent only a very partial view of the real situation and brings questions to the amount of influence gain through donations.  To obtain a complete picture, further research would be needed.  (S)
THE IMPORTANCE OF CHINESE DIASPORA
52.  The key to the Chinese riddle lies in understanding the unique culture of the Chinese people.20  The core of this culture is to be found in the importance of developing and maintaining a very broad network of privileged contracts based on the fact of being Chinese, your backers (Hou Tui) and an individual's obligations towards others (Guanxi).  Furthermore, no other ethnic group in the world can equal the economic power of the Chinese diaspora.  Their numbers are estimated at over 60 million, and their financial power is put conservatively at over US $2 trillion.  With the wave of immigration from Hong Kong, this financial power has grown again exponentially.  Most Southeast Asian countries have long found their national economics to be dominated sometimes by as much as 90 per cent, by the Chinese community.  While not supporting its political views, most Chinese retain a strong attachment to the Motherland remains.  The Chinese diaspoa is present on every continent and has always been, willingly or not, the point of entry into and the centre of operations in a foreign country for the ChIS and the triads.  (S) 
CONSEQUENCE FOR CANADA
53.  Because of its strategic alliance with some important and influential Hong Kong business people, and with organized crime syndicates, the Chinese leadership appears to be today in a position to developing a potential of influence over the international market and particularly on the Canadian economy and political life of the country.  Why Canada?  Because Canada always been somehow favourable in China.  It has also an important Chinese community and very important economic tides with Hong Kong.  Having bought significant real-estate holdings and established companies in Canada, gain some access to political leaders and business people, it is now in a position to seek power by influence.  What make it difficult to argue against it the fact that most of it has been done legally.  Even more, the threat is manifold and very elaborated in a complicated web of businesses.  It diffuses itself through a not so tangible network.  If you look at a single individual, the threat does not seem to be there but because of their associations and their alliances with China, the facts analysed lead to the believe that a gain of influence is been the object of a concerted plan and that could constitute a threat to Canada.  (S)
54.  Some Chinese owners are now in a position to use the Canadian companies they have bought and some political channels that they have developed to obtain subsidies for research and even classified contracts.  Once access is gained, little is in place to prevent them from repatriating the fruits of the research or classified information to China.  (S)
55.  The triads and their associates also used these positions to transfer large sums of money derived from criminal activities into the Canadian economy.  Buying Canadian property or a Canadian business affords a "window" of opportunity to pursue their illegal activities in Canada, such as money-laundering and drug-trafficking.  (S)  
56.  One of the important dimension of the Chinese financial holdings is its ownership over important Canadian real estate.  The nerve centre of the Canadian economy is concentrated in three or four large urban centres.  Already, a large part of these financial centres are in the hands of Chinese interests.21  Canada is not the only country where we observe this situation.  One has only to look at the profile of the Southeast Asian economy or the investigations currently underway in the United States.  The Canadian economy, however, is more vulnerable because of many legislative loop hole governing finance and the concentration of financial power in the hands of few.  The potential of threat also lies in the fact that, at present, a foreign power, China, seems to be in a position to influence the Canadian economy and politics.  (S)
57.  Several Canadian companies in the security field, such as computer management and video surveillance, are now owned by Chinese interests.  When a contract is awarded by federal departments to private companies, the usual security investigations are done on the persons who will eventually be working on a project or installing equipment.  Now a new threat seems to be itself in relation with the ownership of some companies.  The case of Data Crown is a good example of this situation.  Although some verifications to investigate foreign companies are done by a group of people at the Department of Public Work, it is not impossible that this shortcoming has already been exploited by no one is able at the moment to answer this question with any certainty because of the complexity of the ramifications involving Chinese companies owned or the ones with some special interest with China.  (S)
58.  There is no longer any doubt that the emigration process in Hong Kong has been abused, and that individuals are being corrupted in some of the Western immigration services.  The entry of triad members and the cases of 13 illegal migrants laid against an ex-judge of the immigration services are not the only cases of malpractices and had caused in the past problems to the immigration system.  This situation places Canada in a vulnerable position regarding illegal immigration and shows the interest by the Chinese of the Canadian immigration system.  (S) 
59.  China remains one of the greatest ongoing threats to Canada's national security and Canadian industry.  There is no longer any doubt that the ChIS have been able to gain influence on important sectors of the Canadian economy, including education, real estate, high technology, security and many others.  In turn, it gave them access to economic, political and some military intelligence of Canada.  The great difficulties in determining the threat is that it is diverse and multi-layered.  It diffuses itself through elaborated networks hold by a cultural practise that still is not well understood by Western Services.  (S)
RECOMMENDATIONS
1.  An expanded task force including analysts from at least the RCMP, CSIS, DFAIT, Immigration Canada and Revenue Canada (Customs and Excise) should be formed to pursue the research begun by this document.  (S)
  • To assess the actual control of Chinese companies over the Canadian economy. (S)
  • To review who the influential Canadian figures are on the boards of the Canadian companies. (S)
  • To consult the FBI, which has recently undertake a similar study; such consultation could prove mutually beneficial. (S)
2.  Support a series of presentations to CSIS regional directorates and RCMP divisions to alert operational managers to the need to investigate Chinese activities the better to grasp the links among the Chinese Intelligence Services, the triads and entrepreneurs in the service of Chinese Companies.  (S)
3.  Organize a series of presentations for senior members of the Canadian security and intelligence community.  (S)
4.  Organize presentations for specific government departments affected by the problem other than those in the intelligence community, such as Justice and Industry.  (S)
5.  Undertake review of security companies which have installed security systems for federal government departments and Crown corporations to determine the real control and ownership of the companies and the potential risk to the integrity of the systems.  (S) 
6.  Carry out thorough research to determine the extent of contributions to Canadian political parties by Chinese companies established in Canada.  (S)
7.  Produce a strategic analysis of the activities and involvement of the government of China and the triads in Chinese entertainment and media in Canada.  (S)
Appendixes
ANNUAL NUMBER OF CERTIFICATES OF PERMANENT RESIDENCE IN CANADA FOR PERSONS FROM HONG KONG SINCE 1990: "ENTREPRENEUR" AND "INVESTOR" CATEGORIES22
EntrepreneurInvestorTotal
1990429422936587
1991362225006122
19928130445812588
19937698524612944
19945758543711195
1995362320465669
1996435226947046
1997 (March)504268772
1990-1997379812494262923
ANNUAL BREAKDOWN OF THE CHOICE OF PROVINCE BY PERMANENT RESIDENTS FROM HONG KONG:  "ENTREPRENEUR" AND "INVESTOR" CATEGORIES23
1990199119921993199419951996
1997
(Mar)
1990-97
Newfoundland
13398910043
P.E.I.
6241251327069
Nova Scotia
22427916024316820419(937)
New Brunswick
912211713144090
Quebec
148115554354337985558673864(13012)
Ontario
1857159530993627339918392196346(17958)
Manitoba
768914211914322283(622)
Saskatchewan
1157328626113839134(929)
Alberta
3413298251048102542855961(4616)
British Columbia
2663341737624313535425593269275(25612)
NW Territories
4500704020
Yukon
0070404015
Total
6587(7122)(12588)129441119556697046(772)(63923)
     (corrected summations)
ORIGIN AND DESCRIPTION OF THE TRIADS
1.  The origin of the triads remains blurred by romantic legend, heroic myths and patriotic folklore.  "Triad" is an English term given to describe the three-sized symbols found on many of the early flags and banners of various Chinese political and social organizations.  The three sides represent the three primary forces of the universe-heave, earth and man.  Triads originated in China during the 17th century in the form of secret societies.  They were dedicated to the political cause of overthrowing the Mongolian (Manchu (or Ch'ing) Dynasty.  While their original intentions were patriotic in nature, by the late 1800s, triads had evolved into widely feared criminal societies.
2.  During the upheavals in China in the early part of this century, they aligned themselves with the nationalist Chiang Kai Shek, himself a major triad leader.  When the communists seized control of mainland China in 1949, these syndicates fled to Hong Kong and Taiwan.
3.  Triads today remain extremely secretive and closed criminal fraternities.  The triads also developed highly ritualized initiation ceremonies meant to instill a strong sense of secrecy, and more importantly, loyalty to other triad members.  Thirty-six oaths, most dealing with loyalty to the triad, traditionally are part of these imitations.  For example, Oath number 4 states: "I will always acknowledge my Hung brothers when identify themselves.  If I ignore them, I will be killed by myriads of swords."  Oath number 20 states that if a brother gives away the secret ceremonies of the society, may he be eaten by a tiger or have his eyes bitten out by a snake.  Each oath ends with a promise of death if the oath is broken.
4.  An individual gains considerable benefits from being a triad member.  These benefits include:

1)    FREEDOM OF MOVEMENT - membership gives the automatic right to operate socially or criminally in an area controlled
       by the triad.
2)    FINANCIAL AID - when arrested by Police, he can rely on fellow members to provide financial aid for legal expenses and
       his family.
3)    CONFIDENCE - triad members who are involved in syndicated crime require continuous contact with their fellow
       conspirators and the fact that all have taken a oath instills a greater degree of mutual trust.
4)    FEAR - the fact that a criminal is a triad member and tells his victim so, often reduces the necessity for violence.
5)    FACE - this is very important and there is no doubt that triad membership increases one's status in the criminal
       community.
6)    POWER OR PHYSICAL SUPPORT - if involved in a dispute he can summon fellow members to his aid to intimidate or
       assault the opposing party.
5.  All triad societies display some degree of hierarchy, and a typical triad has members organized by rank.  Each rank carries a title and a numerical value, based on triad ritual.  The leader of a triad is known as the "Dragon Head' or the Mountain Lord, and carries the rank "489."  Other "office bearer" positions include the deputy head of a branch also known as Assistant Mountain Lord, who carries the rank "438".  This rank goes as well to the Vanguard and Incense Master, both of whom officiate at ceremonies.  The White Paper Fan, who holds the rank "415", is the advisor on administration, finance and organization of the branch.  The Red Pole, who holds the rank "426", is the head fighter and battle strategist.  The Straw Sandal, holding the rank "432", is responsible for organizing battle and meeting with other societies.  He also delivers demand notes when necessary, for ransom or protection money.  All other triad members are know as ordinary members or soldiers, and hold the rank of "49".    
6.  the relationships among individual triad members are based on ties between "Dai-Lo's" (big brothers), and "Sai-Lo's" (little brothers).  The Sai-Lo's give loyalty, support and sometimes money to their Dai-Lo, in exchange for protection and advice.
7.  Triad societies are in fact a collection of loose-knit groups or gangs rather than a complete monolithic criminal organization, such as the Mafia whose power is diffused from a central core through an organized chain of command.  Instead, triad members frequently branch out into their own criminal enterprises.  While the triad leadership does not always initiate and direct the criminal activities of all the triad members, triad clearly serve as international networks to facilitate such activity.  Moreover, monetary profits from criminal activity of triad members often flow to the top in indirect ways, such as through gifts.
8.  Even though it is now a criminal offence even to be a member of a triad in Hong Kong, that city is the undisputed capital of modern day triads.  While exact numbers are difficult to corroborate, according to the Royal Hong Kong Police there are today in Hong Kong over 50 triad societies, of which 15 to 20 regularly come to the attention of the police through their involvement in crime.  The clandestine nature of the triad movement precludes an accurate assessment of the total number of triad members, society membership ranging in size by considerable degrees.  In Hong Kong, triads can be divided into four main categories:
The Chiu Chao Group
9.  This group consists of four criminal syndicates.  The oldest of the four is know as the Fuk Yee Hing and it continues to operate in Hong Kong.  The membership of this triad is comprised mainly of descendants of the earliest immigrants from China.  The youngest triad of this group is the Sun Yee On triad, established in 1919.  The Sun Yee On Triad is currently the most powerful of the Hong Kong-based triads with extensive international interests (United States, New Zealand and Canada.)
The Big Four
10.  This group is composed of nine triad organizations whose name characteristically starts with one of the following words: Tang, Tung, Luen, and Ma.  This group is involved in extortion, prostitution, and robbery.  The Luen Kung Lok is one of the most important triads in Canada. 
The Wo Group
11.  Thirteen triad organizations now belong to the Wo, including the Wo Hop To and Wo Shing Wo.  The Wo triads are principally noted for their large-scale robberies and gangland-style killings.
The 14K
12.  The 14K is the third largest society of modern times.  The society was formed in 1949 by refugees from the Chinese mainland.  14K has a large number of sub-branches and independent groups.  This triad has become international in scope with branches in Japan, Taiwan, Southeast Asia, Europe, United States and Canada.  
Taiwan
13.  After 1949, the triads also fled to Taiwan.  Today there are believed to be 700 or so gangs and triads in Taiwan.  One of the most famous and largest is the United Bamboo Triad.  The United Bamboo has an estimated membership of over 20,000.  It now operates internationally in the United States, Canada and throughout the Far East.  The group is particularly active in Los Angeles, Houston, New York and Vancouver, and has been linked to murder, kidnapping, alien smuggling, illegal gambling, and loan sharking.
PROFILES OF TYPICAL TRIAD MEMBERS
These profiles are used by the Immigration Control Office and the RCMP Liaison Office in Hong Kong to assess applicants.
Profile A: Young Adult24
Sex: Male
Age: 11-25 
Occupation:  The status of an individual can range within this category depending on the position within a society.  At lower levels, some well be unemployed and will be living off their girlfriends, who in many cases may be willing prostitutes.  If employed, employment will be in a business of a cash generating nature, e.g. hawkers, night clubs, restaurants, interior decorating firms, fish markets, health clubs, massage parlours, mahjong schools, billiard halls, sports or martial arts clubs, film or video distribution companies, and transportation companies.  Generally, the education level will not be beyond a secondary education.  
Travel: Asian Counties, North America.
Residences Outside Country of Origin: Generally, this group will not have real estate outside their country of origin.
Foreign Counties Used for Criminal Activities:  Although this list is by no means exhaustive, North America, Thailand China, Taiwan, Singapore, Nepal and Vietnam have been identified as primary areas of operation.
Outside Activities: Gambling, Horse races, triad affiliation.
Arrest Convictions:  Juvenile record for minor violence, petty thefts, gambling, fighting, and weapons offenses.  In later years, a more serious record of crimes of a more sophisticated nature will be noted: i.e. extortion, pimping, drug trafficking, triad affiliations, bookmaking and loan sharking.  This would indicate an individual being a member of a youth gang and then graduating to an affiliated street gang and then as a senior gang member.  Some may have tattoos such as dragon, phoenix, snake, etc.
Profile B: Mature Member25
Sex: Male
Age: Over 25 
Occupation:  Within this age bracket, it is still possible to see some of the characteristics of younger members, however, with age it can be assumed that if triad associated, the individual will move farther and farther away from the actual criminal activities and will appear as a manager/owner of a cash generating business.  Subjects will possess a substantial amount of wealth and would apply under the business immigration program, but may also appear in other immigration categories.  Likely has had involvement in past or currently with businesses listed in Profile A on previous page.  
Education:  The educational level will generally be no more than a secondary education, although some exceptions do exist.
Travel: Extensive in Asia and will show considerable travel to North America prior to making application for immigration.
Residences Outside Country of Origin: May have an interest in North American businesses which will likely be in the form of a hotel, restaurant or finance affiliated business.  May already own property and/or business in Canada.
Foreign Counties Used for Criminal Activities:  Asian countries such as China, Vietnam and Thailand for drug-related activities, and Taiwan, Hong Kong and Singapore for money laundering.
Outside Activities: Will be involved in the business community to the greatest extent possible in order to give the appearance of legitimacy and may be on the executive or an active member of many well know charitable organizations such as the Boy Scouts, Rotary clubs, etc.  By donating to charitable causes and organizations, may attempt to cultivate political friends and make a habit of associating with prominent members of the community to gain influence.  May be a gambler, frequent the races and attend triad-associated functions.
Arrest Convictions:  As in Profile A, a progression may be noted with criminal convictions in early years.  Later on, subject may have a clean record, but intelligence may reflect triad association and/or gambling offences or being a triad member.  This would indicate an individual may have progressed through a triad hierarchy and is now controlling a certain criminal group.
GUANXI OR NETWORKING
1.  Influenced by the Chinese, but practised in a variety of Asian societies, "guanxi" means to gain access to social resources, acquire social status and advance economically.  Although this practice is not totally foreign to Westerners, they would generally apply individual initiative to advance themselves economically and socially.  Asians have mastered the art of gaining advancement through the development of a network of relations.
2.  Asian society is relational, while Western society is an individualistic society.  Asian society regulated by the collective morality of relational networks and the rules of law plays a secondary role.  Western society, on the other hand, is a legalistic society in which the individual is subordinate to the law.  "These major differences produce an Asian society that sees behaviour on a moral continuum which proceeds from black through shades of gray to white, while Western society only sees behaviour that is black and white."26
3.  When a relational society is coupled with a monetary objective, any venture that is profitable can and will be pursued.  Therefore, one can say that Asian crime is a form of business and Asian criminals organize and conduct their criminal activities just as they conduct any business; through vast networks of relations.  A globally distributed population and an influential and powerful infrastructure in virtually every country in the world, enables Chinese crime groups to carry out transnational and domestic criminal  activities on a much bigger scale than the Italian mafia, the Colombian drug cartels and Russian-based organized crime.
THE CHINESE DIASPORA
1.  the dynamics of Asian's extra ordinary growth cannot be understood without a thorough examination of the Overseas Chinese also known as Hua Quiao.  The Overseas Chinese community is a borderless nation, united by ties of family, clan, language and motherland.  It is estimated that there are some 60 million Overseas Chinese who contribute much to the overall economic strength of their ancestral homeland, providing ready-made linkages and networks (guanxi) for legal and illegal business.
2.  Hua Quiao influence, power and wealth are disproportionate to its size.  "In some Asian countires, the small population of Overseas Chinese control an amazing percentage of the economy.  in Thailand, the Overseas Chinese comprise only 10 per cent of the population (8 million) but have 60 per cent control over the economy: in Malaysia 35 percent and 60 percent; in the Philippines, 2 percent and 60 percent; in Vietnam, 5 per cent and 60 per cent; in Indonesia, 2 percent and 85 percent.  In countries where Chinese have been the dominant group for much longer, the percentages are higher: in Singapore, 75 per cent and 95 percent; in Taiwan, 100 percent and 100 per cent. 27
3.  "The Overseas Chinese community has one of the world's largest pools of liquid capital, amounting approximately US$ 2 trillion.  Their 'GNP' is estimated to be one quarter larger that of China, that is, approximately US$ 450 billion.  This is a staggering amount considering that Japan with a population double that of the Overseas Chinese, has only US$ 3 trillion in assets in 1990."28   This power base is the result of a pragmatic cohesion of ethnic solidarity aided by official and unofficial networks.  This cohesion is complemented by sophisticated resources supporting information and technology on a global scale. 
Source Notes
20  See Appendix VI, The Chinese Diaspora.
21  For example, Li Ka-Shing owns several building in the core of Toronto financial district.  It is also estimated that he currently
     owns one-sixth of downtown Vancouver.  Among some of his projects, he bought the largest undeveloped site in any downtown
     core in Canada: the lands around the CN Tower and obtained with it the exclusive right to use the tower for $2 billion dollars, 
     Expo '86 lands in Vancouver for $3billion dollars, Harbor Castle Westin in Toronto ($93 million (1981)).
22  Citizenship and Immigration Canada, Permanent Resident Databank, April 1997
23  ibid.
24. Garry W.F. Clement, RCMP (Hong Kong) and Brian McAdam, Immigration Canada (Hong Kong).  
     Triads and Other Organized Crime Groups.
25  ibid.
26.  Willard R. Myers III, Guanxi and Its Role in Asian Crime: A System of Social Organization and Resources Distribution
       Is the Foundation of Organized Crime, Center for the Study of Asian Organized Crime, 1995
27.  Douglas D. Daye, A Law Enforcement Sourcebook of Asian Crime and Cultures, Tactics and Mindsets.  
      CBC Press, New York, 1997, pp. 170-171
28.  Mark Craig, Chinese Organised Crime,  Queensland Police Service, Australia, 1996, p.10.