BURNS LAKE 'BANK' WAS USED TO LAUNDER CASH FROM DRUG DEALS

Surrey Marijuana Grower, Now In Jail, Had Invested In The Numbered Company

A numbered company that until last week was operating as an unregulated
bank in the Burns Lake area was used to launder proceeds of drug
trafficking, The Vancouver Sun has learned.

Donald Briere of Surrey, 51, who claimed to be in the home renovation
business but in fact was involved in a massive marijuana grow operation,
invested some of the illicit proceeds in 439288 B.C., which was operating
as a deposit-taking and money-lending business.

Briere also loaned some of the proceeds to Doug Montaldi, one of the bank's
three directors. He also jointly owned with Montaldi another numbered
company, 573796 B.C. Ltd., that invested extensively in B.C. real estate.

In addition to their business dealings, Briere has a family relationship
with Montaldi. His sister, Sharol, is Montaldi's common-law wife.

In September, Briere pleaded guilty to cultivating marijuana, laundering
$2.3 million of the proceeds and possessing a prohibited assault rifle. He
is now serving four years in jail.

Briere is an outspoken advocate for the decriminalization of marijuana. In
fact, he ran for the Marijuana Party in last year's provincial election.

Montaldi did not return several telephone calls on Thursday and Friday, but
fellow bank director Glenn Anderson confirmed that Briere invested $200,000
or $300,000 in the bank.

"About five years ago, Briere put some money with us -- like a lot of other
people -- through Doug," he said in an interview.

Asked if Briere ever brought in cash, Anderson replied: "I know there were
some cheques and some cash, but that is not uncommon with lots of people I
deal with."

Asked how much cash, he said: "It might have been $5,000 on some occasions.
I can't recall. We gave all those documents to the people who did the
investigation."

Asked whether he ever asked his customers where their money comes from, he
replied: "I never ask anybody where they got their money from."

Anderson said he never met or talked with Briere, "but all the stories I
got from Doug and Sharol was that Briere was a construction guy in the
Lower Mainland who had quite a crew of tradespeople who worked for him. The
perception was that he was a fairly well-to-do building contractor in the
Lower Mainland."

In fact, Briere was running a multi-location marijuana grow operation, the
largest that Surrey RCMP had ever seen. He also owned an arsenal of deadly
weapons, including an Intra Teck 9 mm machine gun and 260,000 rounds of
ammunition.

In an interview with The Province last October, he described how he ran up
to 34 growing operations, or "job sites," employing some 80 people, mostly
in the Lower Mainland.

On average, each rented house held 16 1,000-watt lights, with 25 plants per
light, growing in dirt under intense care. "The goal was a pound of bud per
1,000-watt light every 60 days," he said.

"It was mind-boggling, keeping it all in my head. I had three phones going
at once and I would never use my own phone to phone a job site, only a pay
phone."

Despite the all-consuming nature of his vocation, it appears many people
fell for his cover story.

"When Don was finally charged (in March 1999), I think it was a total shock
to the whole family," Anderson said.

RCMP proceeds of crime investigators continued their investigation to
determine what Briere had done with his illicit drug profits.

In September 1999, they searched banking records for several dozen accounts
at the CIBC and Royal Bank branches at Burns Lake.

They included accounts belonging to Montaldi, the numbered company that
operated as a bank, the numbered company that Montaldi and Briere had
formed to invest in B.C. real estate, and several other companies in which
they had joint interests, including HEMP Scientific International Inc.,
which was conducting research into the commercial uses of hemp.

RCMP also searched the offices of Marmon Financial Management Ltd., which
did accounting work for both Briere and the bank.

Anderson recalled the raids: "About three years ago, the RCMP crime unit
investigated Briere ... We showed them what Don had as investments.
Whatever it was became the property of the Crown."

In July 2000, RCMP laid another round of charges against Briere relating to
money laundering and possession of property obtained with the proceeds of
crime.

The charges included laundering $2.32 million and possession of certain
assets acquired with the proceeds of crime. Those assets included the
unpaid balance of a $216,100 loan Briere had made to Montaldi.

Briere pleaded guilty and agreed to forfeit his half interest in 573796
B.C. Ltd., the real estate investment company he jointly owned with Montaldi.

There was no suggestion either Montaldi or Anderson were involved in any
wrongdoing. No charges were laid against either of them.

"Doug didn't know, I didn't know, and Sherol didn't know [about the money
laundering]," Anderson said.

"Doug even testified against his brother-in-law. I've never even met the
man. The RCMP's proceeds-of-crime division inspected the books."

Meanwhile, 439288 B.C. Ltd. continued to serve as a deposit-taking and
money-lending institutions. By Dec. 31, more than 400 customers, nearly all
located in the Burns Lake area, had deposited at least $36 million.

On May 3, investigators from the B.C. Financial Institutions Commission
issued cease-and-desist orders against the bank and its three directors --
Montaldi, Anderson and Gordon Shanks -- on grounds they were not authorized
to take deposits.

On Thursday, the numbered company's lawyers appeared in B.C. Supreme Court
and filed a notice of intent to make a proposal to its creditors under the
Bankruptcy and Insolvency Act. Under the act, a company cannot make such an
application unless it is insolvent.

The events of the past week have shocked and angered many residents in the
Burns Lake area, 1,000 kilometres north of Vancouver, who relied on the
numbered company as a place to invest their money at high rates, usually at
12 per cent per year, and borrow money on quick and easy terms, albeit at
17- to 18-per-cent interest.

Many residents contend the bank was functioning well, and has been
imperilled by regulatory intervention.

However, commission officials say it was "totally unregulated" and did not
provide any of the usual consumer safeguards, including solvency and
liquidity requirements and deposit insurance.

Unstated by the commission is the fact that, because it was outside any
regulatory purview, it was potentially an attractive place to launder money.