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TORONTO — The financial records of an Ontario man accused of laundering funds for an international drug smuggling operation came under scrutiny in a Toronto courtroom on Monday as he made his bid for release ahead of his extradition hearing.
Prosecutors questioned Rolan Sokolovski on his tax reports and the financial statements of his jewelry business, Diamond Tsar, as well as the money he earned playing poker, which he said was enough to sustain his lifestyle for the better part of a decade.
Sokolovski, who was born in Lithuania and came to Canada in the 1990s, said he made more than $100,000 a year from poker tournaments and online cash games between 2013 and 2020, and got into cryptocurrency about seven years ago, profiting up to US$200,000 in some trades.
None of that was declared to the Canada Revenue Agency, Sokolovski said, adding he believed earnings from gambling didn’t have to be reported for tax purposes. He told the court he viewed trading cryptocurrency as another form of gambling.
Winnings from gambling are generally treated as a windfall and not taxable in Canada unless they can be considered income from a job or a business. Disposing of cryptocurrency by selling, trading or spending it can lead to gains or losses that must be reported on a tax return.
Court heard Sokolovski didn’t take a salary from his company and reported having no personal income on at least one of his tax returns.
Sokolovski was arrested last fall along with several other Canadians accused of working with former Olympic snowboarder Ryan Wedding, an alleged drug kingpin listed as one of the U.S. Federal Bureau of Investigation’s most wanted.
U.S. authorities allege Sokolovski, who is 37, oversaw the organization’s books, obtained luxury goods for Wedding and made a “bejewelled necklace” as payment for a murder.
The U.S. Treasury Department also alleges Sokolovski transferred millions of dollars in drug money using cryptocurrency.
Sokolovski lived with his parents until he moved in with his now fiancée in 2021, taking on the roughly $3,700 monthly rent for the apartment, he testified.
In 2023, he traded in his car, paying an additional $110,000 or so for a Porsche — money Sokolovski said he got from the business, since he considered the car both a business and personal vehicle.
He also withdrew about $500,000 from the business’s retained earnings last year to help cover the $1.7-million down payment on a $4-million home, he said.
Asked how he was able to come up with the rest of the down payment, Sokolovski said it was a combination of saving and his earnings from trading cryptocurrency.
Buying and reselling luxury watches also added to his nest egg, he said, estimating he’d sold up to 30 over several years. One of them, an Audemars Piguet Royal Oak, sold for $70,000 more than the $55,000 he’d spent on it, he said.
Prosecutors also questioned Sokolovski about trips to Miami and Vancouver, and one to the Bahamas last fall that was cut short when authorities arrested him on arrival.
The court is expected to hear this week from the people proposing to supervise Sokolovski if he is released on bail.
Ontario Superior Court Justice Peter Bawden ruled Monday to prohibit the publication of any information that could identify the potential sureties, finding it necessary to reduce their risk of physical harm or death.
While it is difficult to assess the degree of risk, it’s possible that members of the criminal organization would view Sokolovski as a potential co-operating witness, the judge said.
“If so, the evidence supports the further inference that he and those close to him would be at risk of being killed, either by members of the (organization) or hired assassins,” he said.
“Publication of any information that could facilitate locating the applicant or his sureties in the community would significantly increase that risk.”
Several days have been set aside for the bail hearing. Prosecutors are opposing Sokolovski’s release, arguing he should be detained to protect the public, to maintain confidence in the justice system and because he poses a flight risk.
Wedding, who is believed to be on the run in Mexico, is accused of being at the helm of a violent organization responsible for transporting large quantities of cocaine from Colombia to Canada by way of Mexico and the U.S.
The organization is also alleged to have hired hitmen to kill people it considered to be rivals or threats.
This report by The Canadian Press was first published Jan. 12, 2026.
Paola Loriggio, The Canadian Press
