An Ontario man facing charges of money laundering for an international drug trafficking ring had his financial records scrutinized in a Toronto court on Monday as he sought bail ahead of his extradition hearing. Rolan Sokolovski was questioned by prosecutors about his tax filings, the financial status of his jewelry business, Diamond Tsar, and his income from poker and cryptocurrency trading, which he claimed sustained his lifestyle for nearly a decade.
Sokolovski, a citizen of both Lithuania and Canada, stated that he earned over $100,000 annually from poker activities and cryptocurrency trading from 2013 to 2020, making profits of up to US$200,000 in certain trades. He admitted to not disclosing any of this income to the Canada Revenue Agency, believing that gambling earnings were exempt from tax reporting. He equated cryptocurrency trading to gambling in his perspective.
In Canada, gambling winnings are typically considered windfalls and not subject to taxation unless they are deemed as income from employment or business activities. Transactions involving cryptocurrency, such as selling, trading, or spending, may result in gains or losses that need to be reported for tax purposes.
Sokolovski was arrested alongside other Canadians last autumn on allegations of collaborating with Ryan Wedding, a former Olympic snowboarder and suspected drug kingpin on the FBI’s most wanted list. According to U.S. authorities, Sokolovski, 37, managed the organization’s finances, procured luxury items for Wedding, and created a valuable necklace as compensation for a criminal act.
The court is set to hear testimonies this week from potential supervisors for Sokolovski if he is granted bail. Ontario Superior Court Justice Peter Bawden has ordered the non-disclosure of any details that could reveal the identities of the proposed sureties to mitigate risks of harm or threats to their safety.
During last week’s proceedings, Sokolovski’s legal team requested safeguarding the sureties’ identities, citing safety concerns. Prosecutors argued that only their addresses should be kept confidential. The bail hearing is scheduled for several days, with the prosecution opposing Sokolovski’s release on grounds of public protection, upholding justice system integrity, and preventing flight risks.