In a Toronto courtroom on Monday, the financial records of a man from Ontario accused of laundering money for an international drug smuggling operation were closely examined as he sought release before his extradition hearing. Rolan Sokolovski, a dual citizen of Lithuania and Canada, faced scrutiny over his tax filings, financial reports from his jewelry business called Diamond Tsar, and income from poker games, which he claimed sustained his lifestyle for nearly a decade.
Sokolovski revealed that he had earned over $100,000 annually from poker activities between 2013 and 2020, and had ventured into cryptocurrency trading about seven years ago, with profits reaching up to US$200,000 in certain transactions. However, he admitted that none of these earnings were disclosed to the Canada Revenue Agency, believing that gambling proceeds did not need to be reported for tax purposes. He equated cryptocurrency trading to another form of gambling.
Under Canadian tax laws, gambling winnings are typically viewed as windfalls and are not subject to taxation unless they are considered income derived from a profession or business. Transactions involving the sale, trade, or use of cryptocurrency may result in gains or losses that must be reported in tax filings.
Last fall, Sokolovski was arrested alongside other Canadians allegedly working with Ryan Wedding, a former Olympic snowboarder listed as one of the most wanted by the U.S. Federal Bureau of Investigation for drug-related offenses. U.S. authorities have accused Sokolovski, 37, of managing the organization’s finances, acquiring luxury items for Wedding, and creating a valuable necklace as payment for a crime.
During this week’s proceedings, the court is anticipated to hear from individuals willing to supervise Sokolovski if he is granted bail. Justice Peter Bawden of the Ontario Superior Court has ordered the concealment of any details that could identify these potential supervisors to mitigate the risks of harm or danger to them.
Sokolovski’s legal team had previously requested safeguarding the identities of the sureties, citing safety concerns, while prosecutors argued that only their addresses should be shielded from public disclosure. The bail hearing has been allocated several days, with the prosecution opposing Sokolovski’s release on grounds of public safety, upholding confidence in the legal system, and addressing potential flight risks.