Aftab Ahmed: Billions stolen from Bangladesh find safe haven in Canada

Of the reported $150 billion laundered by cronies tied to Bangladesh’s recently deposed autocratic regime, a large portion has ended up in Toronto real estate.

Bangladeshi expatriates in Toronto organize a human chain at the corner of Eldon Ave and Danforth Ave to protest money laundering from Bangladesh to Canada. Photo: The Daily Star, February 3, 2020. 

By: Aftab Ahmed

A student-led mass uprising toppled Bangladesh’s autocratic regime in August. Freed from the invisible grip of censorship, journalists en masse exposed the unchecked corruption that had plagued the 180-million-strong, densely populated Asian economic tiger for over a decade.

The buzz in Dhaka has coalesced around a connection surprising to global audiences but all too familiar to Bangladeshis: Canada. Specifically, Toronto’s real estate market is now infamous as a key node in the global chain of financial fraud and embezzlement — a veiled haven for laundered wealth that links kleptocratic regimes to sophisticated yet complicit financial systems.

The now-deposed Sheikh Hasina was the world’s longest-serving female head of government. She fled to New Delhi on August 5 as tens of thousands of protesters stormed the prime minister’s residence in Dhaka. At least 1,500 people were killed during a brutal crackdown on anti-government protests in the weeks leading up to her resignation. Her departure triggered an unprecedented exodus of elites.

Hasina’s inner circle of cronies — including family members, cabinet colleagues, parliamentarians, civil servants, grassroots politicians, judges, party-affiliated student activists, oligarchs, and law enforcement officials — either fled Bangladesh or went into hiding. They saw the storm coming, with good reason. Public anger was palpable. Mob violence erupted in some cases against those accused of blindly backing Bangladesh’s most ruthless dictator.

Parallels can be drawn to the fall of Ferdinand Marcos in the Philippines and, more recently, Gotabaya Rajapakse in Sri Lanka. However, the scale of this exodus is perhaps unmatched in modern history, involving not just Hasina but thousands connected to her government. Many Bangladeshi commentators view her as the chief architect of a mafia-style criminal enterprise that bore little resemblance to a responsible government. The state malfunctioned as a partisan vessel for institutionalized corruption on an astonishing scale. Economic development was weaponized as a camouflaged instrument for state-sponsored financial crimes. Billions of dollars were siphoned out of the country and funnelled into financial refuges such as Toronto, London, Dubai, and Kuala Lumpur. 

The banking sector lay at the heart of this corruption. Politically connected individuals strong-armed public and private banks into granting them huge loans without any intention of repayment, resulting in a ballooning crisis of non-performing loans. By 2023, around 11 per cent of all loans were classified as non-performing.

Between 2008 and 2018, more than $28 billion was invested in the Greater Toronto Area (GTA) through corporate entities linked to money laundering. Of that total, $9.8 billion in GTA real estate was purchased during that period using cash, bypassing anti-money laundering checks. By 2023, over half of the homes priced above $7 million in Toronto were owned by anonymous corporations.

Bangladeshi elites have been active participants in this system, leveraging shell companies and trusts to obscure ownership. It would be naive to suggest that Canadian financial institutions were entirely unaware of this. A report by the Financial Transactions and Reports Analysis Centre of Canada revealed alarming levels of non-compliance with anti-money laundering laws.

In the real-estate sector, 61 out of 71 firms lacked sufficient safeguards, allowing billions in dirty money to enter Canada unabated. Commentators define it as snow-washing, which refers to hiding illegitimate financial transactions, often for purposes such as tax evasion, within Canada.

The term Begumpara — a colloquial Bengali phrase that combines the words aristocratic Muslim lady and neighbourhood — has become synonymous with the influx of Bangladeshi wealth into Toronto’s real-estate market. Toronto’s robust Bangladeshi immigrant population of around 500,000 and the federal government’s marketed channels for permanent residency through investment-related pathways have contributed to this trend.

Begumpara broadly efers to affluent neighborhoods in the GTA, including areas such as North York and Richmond Hill, filled with luxury homes and multiple investment properties purchased by Bangladeshi elites, typically men. The average Bangladeshi newcomer to Toronto views these neighborhoods as stains of betrayal, representing money stolen from public coffers with no sense of remorse.

Canada’s weak regulatory framework for real-estate transactions enables these practices. In the bigger picture, beyond political commitments to financial integrity, Ottawa has little economic incentive to restrict the inflow of foreign funds into real estate, as these investments remain interlinked with urban economic growth.

The absence of a transparent beneficial ownership registry also allows criminals to use shell companies to launder money with little oversight. Unregulated mortgage lenders, who manage an estimated $35 billion in residential loans in the GTA, have further facilitated the integration of illicit funds into Canada’s formal economy.

While British Columbia introduced a Landowner Transparency Registry in 2020 to combat similar issues, Ontario and the federal government have lagged behind. A planned national database of beneficial landowners, expected in 2025, may address some of these gaps but will come too late for the billions already laundered.

There are salient lessons for Ottawa if it seeks to translate words into action in tackling international financial crimes. First, Canada must strengthen its financial oversight and enforcement mechanisms to address non-compliance in the financial and real-estate sectors, ensuring stricter penalties for institutions failing to report suspicious transactions.

Second, while implementing a beneficial ownership registry to increase transparency in property ownership, Canada must prioritize rigorous monitoring to prevent the misuse of shell companies for laundering illicit wealth.

Third, Canada should establish mutual legal assistance agreements with laundering source countries to enable the tracing, freezing, and repatriation of stolen assets effectively. Without such initiatives, Canada risks quietly sustaining a global financial architecture where developed nations with sophisticated financial systems provide carte blanche to bad actors from developing countries to siphon wealth while leaving economic instability behind.

These are problems Canada must solve, for itself and for the world. Given the increasing scrutiny on this country that will be a feature of the incoming second Trump administration, now would be a good time.

Aftab Ahmed completed his Master of Public Policy degree from McGill University's Max Bell School and is a Policy Development Officer with the City of Toronto. He serves as a regular columnist for Canadian and Bangladeshi media outlets and policy publications. He can be reached at mir.ahmed@mail.mcgill.ca.  The views expressed in this article are his personal opinions and do not reflect those of any organization, institution, or entity with which the author is associated.

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