B.C. MONEY-LAUNDERING SCAM RAKED IN $200 MILLION

Funds Came From Cocaine, Pot Smuggling

The RCMP and the Organized Crime Agency of B.C. are wrapping up separate
investigations into what is alleged to be one of largest drug
money-laundering schemes in Canada.

Police believe more than $200 million was laundered as the proceeds of
trafficking cocaine imported from the U.S. and B.C. marijuana smuggled
across the U.S. border, according to court documents.

"It was a very successful investigation involving an organized crime group
. . . primarily Asian organized crime," Inspector Mike Littlejohn of the
Organized Crime Agency of B.C. said Wednesday.

The agency's investigation has resulted so far in charges against two
Vancouver residents of conspiracy to import cocaine. The RCMP's separate
money-laundering investigation has resulted in no charges so far, but is
continuing.

The organized crime drug investigation resulted in the Dec. 12, 2002
seizure of almost $800,000 cash found in the trunk of a Porsche driven by
Piotr Robert Sperka of Vancouver.

At the time, Sperka was a trader at Wolverton Securities Ltd. in Vancouver.
He no longer works for the company.

The seized cash totalled $792,980, including 10 bundles of $100 bills
amounting to $500,000. The rest of the bundles were in $20 and $50 bills.
Also seized were two cellphones and an adding machine tape with amounts
totalling $793,530. Sperka, who has not been charged, allegedly received a
cash commission for converting U.S. funds into Canadian currency.

Police allege that Sperka exchanged currency through Larry Heng, the
brother-in-law of Laurence Chang, a broker at Wolverton Securities,
according to a recent court judgment by B.C. Supreme Court Justice Marion
Allan.

The judge imposed a publication ban on the proceedings last February, at
the request of defence lawyer David St. Pierre, who was representing three
targets of the investigation.

But the ban was lifted Wednesday after The Vancouver Sun applied to set
aside the judge's previous order.

The only affidavit filed in support of continuing the publication ban was
that of Dat Dac Tien (Frank) Tran, who was concerned about a potential of
loss of reputation that may affect him commercially.

Tran said he is a principal of a company that leases a building to various
tenants and was concerned that publicity would affect his desirability as a
landlord.

He also hoped to establish a "currency exchange business" in the future and
was concerned he would not be able to establish customer good-will if there
was publicity about him with respect to unproven allegations of financial
misconduct.

Tran and Sperka were targets of an RCMP Integrated Proceeds of Crime
Section investigation, code-named Project Exchange Rate, that began in July
2001. Other Vancouver targets were Tran's wife, Thi Bac Hoa (Kim) Phan, and
Kim Lien Do.

Tran and Phan were charged last month in Vancouver with conspiracy to
import cocaine with Jose Donaldo Lopez-Guzman, and conspiracy to traffic
cocaine with Lopez-Guzman, Van Doan Ha, Nhi Mui Chiem and Tho Ahn Khuc. Ten
others were named as co-conspirators in the trafficking scheme.

Tran and Phan were earlier charged with money laundering in Washington
State, where they are also accused of conspiracy to export more than five
kilograms of cocaine, which carries a maximum penalty of life in prison and
a $4 million fine.

As the RCMP investigation continued into the summer of 2002, it appeared
some of the targets had surfaced in Project Blizzard, a separate drug
investigation conducted by the Organized Crime Agency of B.C.

According to court documents, police concluded during the Project Blizzard
investigation that Tran and Phan were involved in trafficking large amounts
of marijuana and cocaine after both were identified by the U.S. Drug
Enforcement Administration as being involved in drug trafficking and money
laundering.

B.C. Supreme Court documents allege that Do, who has not been charged,
purchased a condominium for Phan for the purpose of storing the cash from
drug trafficking and other items related to the alleged money laundering
scheme.

On Feb. 11 last year, police seized four bank drafts worth about $200,000
from Phan as she was leaving a TD/Canada Trust bank on Kingsway with her
daughter.

Phan was carrying an envelope containing bank drafts in the amounts of
$10,077.58 US, $83,160.67 US, $14,387.85 Cdn and $110,530.48 Cdn.

Police allege the bank drafts are the proceeds of crime. But Phan has
claimed the bank drafts represented her life savings and were operating
capital for family businesses. Her family has suffered hardship as a result
of the seizure, she claimed.

The drug trafficking and money laundering allegations were raised in court
earlier this year when Crown prosecutors Monica Harmel and Chris Randall
applied to continue detaining the seized money and bank drafts until July
22. The judge decided to extend the detention order until May 22. The
Vancouver drug charges were laid against Kim Phan and Frank Tran on May 21.

At the time of the detention hearing, the court heard that the complex
investigation involved dozens of binders, numerous search warrants and
seven wiretap authorizations that captured thousands of conversations, some
in Vietnamese and Spanish. About 400 conversations already have been
translated and transcribed.

Forensic accountants were also retained for both investigations.
Investigators hoped to establish that Tran, Phan and Sperka allegedly had
access to sums that far exceeded their legitimate sources of income, said a
B.C. Supreme Court judgment from last March 15.

According to the Organized Crime Agency of B.C.'s annual report last year,
Project Blizzard involved Vietnamese and Latinos who were allegedly
smuggling multi-kilogram shipments of cocaine across the Canada-U.S. border.

U.S. prosecutors allege that a U.S. drug trafficker named Adalberto
Silva-Rivas of Schawana, Wash., was using the services of Tran and Phan to
launder drug money and to convert Canadian currency to U.S. funds then used
to purchase cocaine in the United States.

Silva Rivas is in custody in the U.S., as is Thanh Thi Tuyen Tran of
Seattle, the sister of Frank Tran.

Frank Tran, Phan and Silva-Rivas are among 15 people charged last year in a
23-count indictment filed in U.S. District Court in Spokane that alleges
they and others were involved in a conspiracy to export more than five
kilograms of cocaine to Canada.

Silva-Rivas is also accused with others of importing pseudoephedrine -- a
precursor chemical used to make methamphetamine -- into the U.S. from Canada.

U.S. court documents allege Phan and Silva-Rivas were heard discussing
transactions involving Canadian currency being delivered to Phan in Canada,
where it was exchanged for U.S. currency to be used for drug purchases in
the U.S.

One of the accused, Uriel R. Silva-Rivas, who is named as an unindicted
co-conspirator in the Canadian charges, was apprehended in California in
1990 and deported to Mexico. When Uriel was arrested on June 19 last year
in Washington state, he was in possession of a loaded .22-calibre
semiautomatic pistol.

Police claim Ariel and Adalberto Silva-Rivas were living in the small town
of Schawana, near Spokane, at the time of the alleged drug and money
laundering offences.

Other Washington state residents named in the U.S. indictment are: Rafael
Magana, Guadalupe Chirpres-Magana, Marco Antonio Magana, Estolia Rivas,
Hector Luis Chirpres Magana, Adolpho Rivas-Viveros, Uriel Chiprez Ramirez,
Benigno Hernandez and Alejandro Magana.

Named as unindicted co-conspirators in the Vancouver drug trafficking
charges are: Thanh Thi Tuyen Tran, Ding Quang Vu, Nguyen Tat Nguyen, Chau
Hong Phi, Thin Steven Suong On, Hong Chow Wong and Chavo, whose last name
is unknown.

The Canadian drug trafficking conspiracy allegedly took place in 2002 in
Vancouver, Burnaby, Langley, Osoyoos and Mattawa, Wash.

Project Blizzard And Project Exchange Rate: A Cross-Border Drug-And-Cash
Ring Alleged:

Based on United States and Canadian court documents The Vancouver Sun
obtained, this is the nature of the scheme that police and prosecutors
claim to have uncovered:

1. Criminal conspiracy

Six Americans and Canadians made criminal plans between February 2002 and
January 2003 to export cocaine from Eastern Washington to Canada.

2. Money laundered

Kim Phan and Frank Tran were allegedly brought in on the Canadian side to
launder the money gained from the U.S. cocaine connection.

3. Currency swap

At the other end of the transaction, police allege U.S. dollars were
provided to Vancouver securities trader Piotr Sperka.

4. Canadian to American

Through an associate, Sperka allegedly passed U.S. currency to Phan and
Tran to be converted into Canadian money -- the same cash, police believe,
produced by the cocaine sales.

5. The evidence

From Sperka, police seized adding machine tapes, cellphones, and $793,000
Cdn in cash including 10 bundles of $100 bills and 18 bundles of $20 bills.

From Phan, police seized bank drafts for significant sums denominated in
both U.S. and Canadian currencies. Phan and Tran allegedly had an
associated buy a condominium for storage of cash and items related to the
money-laundering scheme.