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B.C.’s attorney general is clear-eyed about the magnitude of the money laundering problem the province and Canada are facing.

David Eby said as much on CKNW’s The Jon McComb Show Thursday morning, in response to a Global News investigation that detailed shocking links between Chinese gangs, street drugs like fentanyl, B.C. casinos and the province’s high-priced real estate market.

READ MORE: How Chinese gangs are laundering drug money through Vancouver real estate

The scheme has come to be known internationally as the “Vancouver model” of money laundering.

“Now, thanks to the work of Sam Cooper, Kathy Tomlinson and others, now the public understands some of what I [learned upon becoming minister],” he said.

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“[They] will surely know that it couldn’t possibly be restricted to casinos, and will also surely know that the money came from somewhere. That there was some sort of tax evasion or criminal activity.”

READ MORE: Report linking drug money and B.C. real estate ‘deeply troubling’: David Eby

Drawing on a report produced by Australian security and crime expert John Langdale from Macquarie University, the Global News investigation revealed how Chinese gangs known as Triads produce drugs and counterfeit goods, which are shipped to Western Canada.

WATCH: Explaining the ‘Vancouver Model.’ How criminal organizations move money and drugs around the world.

1:47 What is the ‘Vancouver Model’? What is the ‘Vancouver Model’?

The money from drug dealers is laundered in B.C. casinos, then sent to China through underground banks in Vancouver. The cash is then moved through shell companies back in to luxury Vancouver real estate.

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“Whether you’re talking about fentanyl or whether you’re talking about real estate, it’s a crisis,” Eby said. Tweet This

Eby admitted that even the B.C. government doesn’t know the scale of the problem.

However, he said there are some concrete facts: that hundreds of millions of dollars in suspicious cash have flowed through B.C. casinos, that hundreds of people are dying of drug overdoses and that real estate in Vancouver has become unaffordable for the middle class.

On Thursday, he pledged action — but provided no details as to what that would look like.

Eby appointed former high-ranking Mountie Peter German to head a task force on casino money laundering last fall. He has received German’s final report, but hasn’t revealed the government’s response.

He said German has been tasked to start a second phase of his investigation into real estate next.

“We are going to get to the bottom of it,” he said.

WATCH: NDP government announces new rules to combat money laundering

1:51 NDP government announces new rules to combat money laundering NDP government announces new rules to combat money laundering

Late to the game

Eby said part of the challenge B.C. is now facing is that officials are just beginning to scratch the surface of the problem.

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He slammed the former BC Liberal government for disbanding a police unit dedicated to casino crime, and said he doesn’t understand how they could not have recognized the money laundering problem.

“I try to put myself in the shoes of people who received the briefings that I received, that had access to the information that I now have access to and I wonder about why they didn’t take action,” he said.

“The only thing I can think of is that the incentives around the revenue from casinos was too great for them to decide to take steps to deal with it, and figure out where the money was coming from.

“It just boggles my mind.”

WATCH: B.C.’s attorney general in Ottawa to tackle money laundering

1:55 B.C.’s attorney general in Ottawa to tackle money laundering B.C.’s attorney general in Ottawa to tackle money laundering

Eby said the provincial government isn’t the only party that’s late to the game, but also pointed to federal regulators who he said are ill equipped to deal with the problem.

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He said FINTRAC, the agency charged with tackling financial crime, has been receiving reports on large cash transactions, but hasn’t moved on them.

“The issue is all the reports were filled out but then it appears there was no action taken on them,” he said.

“I still am not aware of a prosecution or a tax evasion prosecution that resulted from someone dragging a hockey bag full of $20 bills into a casino.”

And he said federal officials need to be serious about funding resources for the Canada Revenue Agency (CRA) and the RCMP to crack down on financial crime.