Canada has always been seen as a safe haven for the rich and the crooked from China.

Over the years dozens of them have fled to Vancouver and Toronto with their families and illegal fortunes mainly because Canada has no extradition treaty with China.

Some have been found and returned, but their ill-gotten gains have remained in Canada with their families or in banks and invested in real estate.

Now Beijing in addition to signing an agreement to get at the fugitives, is working on plan with Ottawa to share the assets that Chinese fugitives illegally transferred to Canada.

Negotiations are in advanced stages and an agreement should be reached in the next few months, Canadian Ambassador Guy Saint-Jacques told China Daily.

“It will provide a legal basis for Canada to share the proceeds of forfeited assets with China, once we identify the transferred illegal money belonged to some criminals or criminal organisations,” he said in an interview with the paper.

“I believe more and more Chinese fugitives will be brought back, and Canada is no longer the imagined haven for Chinese fugitives, including many corrupt officials, to flee to,” the ambassador said.

According to China’s Ministry of Public Security, thousands of Chinese economic fugitives have transferred “billions of yuan” overseas.

“After the bilateral agreement is completed, it will facilitate the return of the money the fugitives illegally transferred and the recoveries of the losses, which will help combat such crimes,” said Wang Gang, a senior officer with the international cooperation bureau under the Ministry of Public Security.

Since 2008, judicial cooperation between China and Canada has made great progress, and Canadian judicial authorities are working closely with Chinese police to identify the criminals and repatriate them, he said.

Canadian judicial departments have sent 590 Chinese nationals back to China since July 2011. Of those, 53 were repatriated in connection with crimes such as drug trafficking, murder, fraud and gambling. The others were mostly related to illegal immigration.

It is understood that the details of the proposed plan were discussed at a meeting between Canadian border officials and their Chinese counterparts on Aug. 3, 2012.

The meeting raised questions among legal experts over whether Canadian and Chinese authorities were circumventing the formal extradition process, which generally protects fugitives from returning to face charges in what is perceived to be a corrupt justice system.

Liao Jinrong, director of the international cooperation bureau under the Ministry of Public Security, said that in recent years Canada has engaged in productive judicial cooperation with China.

“They paid close attention to information Chinese police provided and cooperated closely with us on case investigations, fugitives’ arrests and repatriation work,” he said, according to China Daily.

Over the past decade, a number of high-profile fugitives have been sent packing from Vancouver, including Lai Changxing, who was found guilty of operating a huge smuggling ring. He was deported from Canada in 2011 after a 12-year battle. His children remain in Canada.

Chinese authorities said Lai was the mastermind of a vast smuggling operation that moved some $4.4-billion worth of cars, cigarettes and oil through the southern port city of Xiamen during the late 1990s. Lai was also found to have paid millions of dollars worth of bribes to a total of 64 officials between 1996 and 1999.

Another high profile fugitive who has been sent back is Li Dongzhe, who was hiding out in North Vancouver for about six years. He and his brother Li Dongue are allegedly behind a billion-yuan banknote fraud.

The Li brothers and another fugitive banker Gao Shan fled to Canada’s westcoast in 2004 just as financial authorities discovered that almost 300 million yuan ($47.5m) had disappeared from the savings account of the Northeast Expressway company at the Hesongjie branch of Bank of China in Harbin, Heilongjiang province.

It was the biggest financial fraud case in Heilongjiang since 1949.

They followed another trio of financial fugitives to Canada.

In that case, the fugitives were as Xu Chaofan, Xu Guojan and Yu Shendong and linked to the massive Bank of China scandal. 

Prosecutors allege that these fugitives created a network of phony companies, staged sham marriages and used fraudulent visas to launder the cash in Canada, Hong Kong, Australia, Macau and the United States between 1991 and 2004.

The Asian Pacific Post reported in 2006 that the three suspects used Richmond, B.C. as a base to stash millions of the stolen loot.

The group bought at least three houses in Richmond while stashing large amounts of cash into accounts at the Royal Bank Canada branch on Ackroyd Road in Richmond and the Vancouver-area branches of the Hong Kong Shanghai Banking Corporation and the Canadian Imperial Bank of Commerce.

In addition, the group also purchased huge amounts of jewellery, expensive watches and gold figurines.

Legal experts in China and Canada both agreed that differences in judicial and political systems were stumbling blocks to extradition and asset transfers.

“It will be interesting to see how this protocol is developed,” said an Asian crime investigator in Vancouver.

“Many a time the ill gotten gains have been laundered, transferred to children through a complex financial web… we will have to prove that it is a direct result of the loot that they had come to Canada with,” he said.

The flow of fugitive fortunes into Canada has been going on for decades.

In 2006, the family of a notorious police sergeant who fled to Vancouver with millions of dollars he had accumulated in bribes during a 31-year career has returned part of the ill-gotten fortune to the Hong Kong government.

Hon Kwing-shum, alias Hon Shum or Hon Sum, served in the Royal Hong Kong Police from September 1940 until he retired in August 1971 during which time he had earned a total of about C$35,000.

But upon retirement he and his beneficiaries owned millions of dollars worth of assets. This included over 50 properties, various bank accounts, investments in Hong Kong, Florida, Thailand and British Columbia.

In 2006, seven years after the corrupt cop, known as one of the “Five Dragons” died – his family reached an out of court settlement and gave up about C$20 million dollars worth of property to the government of Hong Kong.

The assets handed over were all in Hong Kong and do not include the millions of dollars worth of property and investments linked to Hon in Canada.

A covert police study obtained by The Asian Pacific Post showed that Hon and his family had bought at least 11 residential and commercial properties and established a dozen companies in Vancouver and a restaurant on Robson Street.

The properties were mainly located in the posh Shaughnessy, Kerrisdale and South Granville neighbourhoods.

The police study done by Asian Organized Crime Investigators believes that up to 44 former Royal Hong Kong cops, followed the lead of Hon and the other so-called “Five Dragons” to escape a corruption crackdown and establish themselves in Canada with their ill-gotten gains.

The ex-Royal Hong Kong police officers, their wives, concubines and children have invested tens of millions of dollars in businesses and real estate in Canada, mostly in B.C. and Ontario, according to the secret Canadian police study.

The study also found that four of them, whose average salary was about HK$30,000 a year each, had built a two-tower, 600-room hotel in Toronto valued at more than $20 million.

The richest eleven of the 44 fugitive cops were estimated to have a combined asset base both directly and indirectly of some C$80 million.

Police officers and lawyers familiar with proceeds of crime investigations said the money brought in by the corrupt Hong Kong cops and other Chinese fugitives is likely to have been legitimized through a variety of means and that there is very little the authorities can do now, unless the same players are actively involved in criminal enterprises.