Comment 109

COMMENT

Show us the money: unexplained wealth orders in Canada

Jeffrey Simser

Revelations of unchecked money laundering activities on Canada’s west coast a few years ago led the Attorney General to commission two reports from Dr Peter German, which is turn lead the groundwork for a full judicial commission of inquiry, called the Cullen Commission. The final 1,800 page commission report included 101 recommendations, one of which was to enact a UWO or unexplained wealth order process. A UWO is an early information gathering step in the civil forfeiture process (non-conviction based forfeiture) whereby a court order compels a respondent to explain how they came to acquire specified property. While each law varies in detail, to obtain a UWO, the government must show firstly that the respondent did not have known legitimate wealth and income to acquire the property and secondly that the respondent has been implicated in unlawful activity. Failure to comply with a UWO gives rise to a rebuttable presumption that the specified property is forfeitable as a proceed of unlawful activity. The government of British Columbia (BC) enacted a UWO process in 2023, one of a surprising number of such jurisdictions worldwide. BC’s model adopted large portions of the U.K.’s UWO law, which in 2020 suffered some initial setbacks in court but saw some success in 2025. The courts in Canada have now issued a series of UWOs.

The first case starts with an event in 2023, where police in Vancouver responding to a “shots fired” call, found one victim with gunshot wounds to their leg and another more seriously injured (who later died). The shooting was clearly linked to one specific residence, which was then searched under a warrant. Police found an illegal cannabis operation, roughly $1.5 million in cash on the premises along with records pointing to bank accounts and other properties. The owners had minimal to no income, and in fact one owner was seeking a child benefit credit from the province and the federal government on the basis that she made less than $1,000 a year. Canada’s financial intelligence unit, FINTRAC, analysed bank disclosures and reported on patterns of placement and structuring in the bank accounts of the two owners. On August 14, 2025, the court issued a series of UWOs in respect of properties and bank accounts belonging to the two owners of the searched residence.

The next two UWO cases are best understood in the context of a securities fraud known as the Silverton Exchange. A fraudster, Roger Knox, set up a platform to hide beneficial ownership in a series of small public companies, which then created the conditions for a “pump and dump” scheme, whereby shares of little value were aggressively sold to small unsophisticated investors. The “insiders” position was not disclosed (as is required under securities law). The fraudsters would cash out at what they saw as the peak of trading, leaving investors with worthless share certificates. The first Silverton case in British Columbia was decided before the enactment of the UWO process. Money found its way through the holdings of a Mexican national and a shell company in Hong Kong into two luxury properties. The court reluctantly issued a freezing order, observing that there were information gaps in the money trail. The subsequent BC UWO process was designed to close those information gaps by seeking information from the person in the best position to provide it, the owner. The next UWO case also related to securities fraud, this time involving Kevin Miller, a UK national last seen in Malta. The shares of a small company called Jammin’s Java Corp were placed in the hands of insiders through a reverse merger and then parked in Panamanian offshore entities to disguise beneficial ownership. The share price rose from $0.17 USD on virtually no trading to $6.35 USD a share with 20 million shares traded, generating $78 million in illicit profit. Miller settled a complaint by the US Securities and Exchange Commission, paying $900,000 but not admitting any liability. In 2016 Miller wired money from the shell companies through a Lebanon bank to his lawyer’s account in Vancouver. Canadians love irony. Miller’s lawyer was the first in Canada to be disbarred for money laundering. Miller then asked the law society to return “his” money (frozen in his lawyer’s trust account). The law society referred the case to the director of civil forfeiture and a UWO was sought. Miller’s lawyer vigorously argued that the UWO process was unconstitutional and that Miller’s SEC settlement ought to absolve him of any other consequences. The court rejected those assertions and on December 22, 2025, issued a UWO.

Another securities fraud UWO case is pending before the courts. Four wire transfers, purporting to be loans, went through a lawyer’s trust account to buy a beautiful property on Salt Spring Island, just off the coast of Vancouver, for $1 million in 2017. The Director alleges that the money came through a securities fraud committed by Skye Lee. Lee had handed the house over to his now ex-wife to settle their divorce. She originally challenged the UWO but has now consented to provide the information. She continues to claim that it would be unjust to dispossess her and her children of their home. Finally, a UWO was sought in respect of Quadriga CX, a cryptocurrency exchange which turned out to be a massive fraud with $169 million in losses. The founder, Gerald Cotton, allegedly died in 2018 at the age of 30 while travelling in India. His co-founder and silent partner, Michael Patryn (last seen in Thailand) had a safety deposit box in Vancouver with cash, jewels, gold bars and luxury items. A UWO was sought and Patryn originally indicated he would oppose the order. However, he chose not to attorn to a Canadian jurisdiction, and the property was forfeited through a default order (rendering the UWO unnecessary). The forfeited funds will likely be disbursed to a trustee responsible for victim compensation.

UWOs are not a magic bullet. That said, the tool works exceptionally well in cases where a fraudster has deliberately created informational gaps by laundering money over borders. There are four Canadian jurisdictions with a UWO process (BC, Manitoba, Saskatchewan and Nova Scotia). With these latest rulings, we can expect more Canadian jurisdictions will adopt UWOs.

(2026) 47 Company Lawyer, Issue 4 © 2026 Thomson Reuters and Contributors