Multiple investigations of money laundering in BC have produced much evidence but little in the way of prosecutions, signalling a longstanding problem in Canada's enforcement regime..A multi-year investigation by authorities in BC led them to recommend eight charges against Paul King Jin of Richmond over money laundering offences..The probe, named “E-Nationalize”, identified ten transactions in 2017 where roughly $20 million in bulk cash, bank drafts and casino chips were moved to clients, and more than $7 million was deposited in Chinese bank accounts..The investigation yielded 41,877 documents, seized 90 smartphones and intercepted more than two million communications. Despite the evidence, the BC Prosecution Service doubted the likelihood of a conviction. .Not satisfied, then-Attorney General David Eby appointed special prosecutor Christopher Considine to provide a second opinion. But on March 1, 2023, the Victoria-based lawyer also decided against prosecution..“While it is possible to identify on paper a theoretical legal path to conviction, my instincts tell me a prosecution is likely to flounder,” Considine wrote in a statement..“The public interest would not be well served by embarking on an expensive and lengthy prosecution that comes to naught.”.Considine noted that a previous probe by the RCMP in 2015 prompted the Public Prosecution Service of Canada to press charges, who eventually stayed the charges in 2018..The biggest problem was establishing “beyond reasonable doubt” that illegal money was laundered..“The proposed predicate offence for [two] charges is the operation of an unlicensed Money Service Business (MSB), contrary to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA),” Considine wrote..“The Crown’s theory would be that X was operating an MSB. Because he had not registered this MSB as required by the PCMLTFA, his business was illegal. As such, the cash received into and paid out of X’s unlicensed MSB became tainted with criminality by virtue of having passed through an unlawful enterprise.”.No legal precedent existed in Canada to determine whether judges would view the MSB as explicitly illegal or simply unlicensed. Precedents in the UK suggested the latter would be the case, leading Considine to conclude that prosecution would be a costly failure..Anti-money laundering consultant Matthew McGuire said the case would have been hard to win, but it’s another sign that Canada’s money-laundering enforcement is failing..“This year there's a parliamentary review to look at whether it's effective or not, and then shortly afterwards, we're going to have our international evaluation of what our outcomes are. And how is it going to fare when there are outcomes like that?” McGuire asked in an interview with the Western Standard..The case wasn’t the only investigation with substantial evidence, yet no prosecution. Project Fisk, a joint investigation by Edmonton Police Service and a Canada Revenue Agency task force, looked into the activities of an inner-city landlord. Det. Dan Behiels recommended 19 charges be laid in 2021, but Alberta prosecutors declined, claiming there wasn’t enough evidence or public interest. .After this, Behiels leaked a USB of the files to the CBC, leading to his suspension. McGuire saw the contents and believes a prosecution would have been a lot of work, but nonetheless possible..The 2022 Cullen Commission said substantial money laundering had been happening in BC since 2008, but officials and law enforcement “failed to intervene effectively.” An estimated $46 billion to $120 billion is laundered through Canada each year..It’s an old problem, according to Larry Comeau, a former Mountie who retired in 2001. When the RCMP first set up Proceeds of Crime Investigation units in major cities, he was attached to the Ottawa unit..“The consistent problem has always been getting enough seasoned investigators to tackle these crimes coupled with the financial resources to conduct these complex investigations, often involving foreign countries,” Comeau told the Western Standard..“I remember the US Drug Enforcement Agency once labelling Canada a money laundering haven.”.Convictions have never been easy, Comeau said..“Because money laundering is purposely designed to hide evidence, especially any paper trail, as in the case of major frauds, it gets very complicated to both present and prove cases in court. Judges and juries often are not familiar with such criminal schemes. These often are year-long investigations…complicated to present in an easily understood fashion,” Comeau explained..“You first have to prove the money being laundered was gained illegally through drug trafficking or another criminal activity, then how it was invested to clean it. Anything bought with proceeds of crime such as houses, boats, vehicles, paintings, goods, can be confiscated if that can be proven.”.The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) was created in 2000 to deal with financial crimes and requires institutions to report transactions over $10,000. However, money launderers skirt this by dealing with cash instead of bank transfers..The federal government created a Financial Crime Coordination Centre within Public Safety Canada to handle financial crime. In 2019, Ottawa dedicated of $319.9 million to strengthen the Anti-Money Laundering and Anti-Terrorist Financing Regime, with $48.8 million ongoing. A new Financial Crimes Agency is also expected..Vanessa Iafolla, a fraud prevention and loss consultant and instructor at Wilfred Laurier University, wonders if the new agencies will do any better than the old ones..“As much attention as financial crime is being paid, there's not a lot of real sustained focus that's happened,” Iafolla said in an interview with the Western Standard..“I'd like to believe that the federal government's Financial Crimes Agency of Canada comes into being and works in a sustained way, but that was what FINTRAC was supposed to be. And that hasn't exactly borne through either. So, are we just adding layers of bureaucracy to the problem?”.Anecdotal accounts don’t give Iafolla confidence, either..“Fraud victims tell me the same thing. People say things like, ‘I reported my victimization to the police, and I heard back from an officer briefly a few days later, and then then six weeks and nothing,’ or, ‘I follow it up and I follow it up, and they don't have any information,’” Iafolla said..“[They] don't have results at the end of the day. They don't. And that is concerning to me as a Canadian. I don't want Canada to be a place where casinos are attractive spots for laundering money or where our real estate market is used to house illicit funds from kleptocrats or drug smugglers.”.McGuire pointed to some hopeful signs and avenues for change..“One of the things that they're starting to do, which is heartening, is…a meeting of law enforcement and prosecution and the judiciary to train each other and understand what the existing standards are and how we can work within the existing framework,” he said..The consultant said he was “blown away” by the internal discipline shown by the Law Society of BC regarding anomalies in their trust accounts..“There's at least four discipline cases that come out in the last month of lawyers who have been found to be using their trust accounts to help shield the proceeds of crime. Often it just results in disbarment. That's not as much as we would like, we want to deprive the criminals of the profits, we want to get them off the streets. But it's at least shining a big light on the issue.”.McGuire believes there’s more hope in civil forfeiture than criminal prosecution, partly because the former doesn’t require as high a degree of certainty for conviction. He believes a better budget for governments pursuing this route could be helpful..Iafolla also believes a sustained focus with better resources could make an impact. She just wants Canada to get on with it..“I love our country. And I want to believe that we have the possibility, we have the talent, we have the resources, we have the skills, we have everything we need to better deal with the problems that we are facing. And I'm ready for people to do it. We're all ready for people to do it. So, let's make this happen.”
Multiple investigations of money laundering in BC have produced much evidence but little in the way of prosecutions, signalling a longstanding problem in Canada's enforcement regime..A multi-year investigation by authorities in BC led them to recommend eight charges against Paul King Jin of Richmond over money laundering offences..The probe, named “E-Nationalize”, identified ten transactions in 2017 where roughly $20 million in bulk cash, bank drafts and casino chips were moved to clients, and more than $7 million was deposited in Chinese bank accounts..The investigation yielded 41,877 documents, seized 90 smartphones and intercepted more than two million communications. Despite the evidence, the BC Prosecution Service doubted the likelihood of a conviction. .Not satisfied, then-Attorney General David Eby appointed special prosecutor Christopher Considine to provide a second opinion. But on March 1, 2023, the Victoria-based lawyer also decided against prosecution..“While it is possible to identify on paper a theoretical legal path to conviction, my instincts tell me a prosecution is likely to flounder,” Considine wrote in a statement..“The public interest would not be well served by embarking on an expensive and lengthy prosecution that comes to naught.”.Considine noted that a previous probe by the RCMP in 2015 prompted the Public Prosecution Service of Canada to press charges, who eventually stayed the charges in 2018..The biggest problem was establishing “beyond reasonable doubt” that illegal money was laundered..“The proposed predicate offence for [two] charges is the operation of an unlicensed Money Service Business (MSB), contrary to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA),” Considine wrote..“The Crown’s theory would be that X was operating an MSB. Because he had not registered this MSB as required by the PCMLTFA, his business was illegal. As such, the cash received into and paid out of X’s unlicensed MSB became tainted with criminality by virtue of having passed through an unlawful enterprise.”.No legal precedent existed in Canada to determine whether judges would view the MSB as explicitly illegal or simply unlicensed. Precedents in the UK suggested the latter would be the case, leading Considine to conclude that prosecution would be a costly failure..Anti-money laundering consultant Matthew McGuire said the case would have been hard to win, but it’s another sign that Canada’s money-laundering enforcement is failing..“This year there's a parliamentary review to look at whether it's effective or not, and then shortly afterwards, we're going to have our international evaluation of what our outcomes are. And how is it going to fare when there are outcomes like that?” McGuire asked in an interview with the Western Standard..The case wasn’t the only investigation with substantial evidence, yet no prosecution. Project Fisk, a joint investigation by Edmonton Police Service and a Canada Revenue Agency task force, looked into the activities of an inner-city landlord. Det. Dan Behiels recommended 19 charges be laid in 2021, but Alberta prosecutors declined, claiming there wasn’t enough evidence or public interest. .After this, Behiels leaked a USB of the files to the CBC, leading to his suspension. McGuire saw the contents and believes a prosecution would have been a lot of work, but nonetheless possible..The 2022 Cullen Commission said substantial money laundering had been happening in BC since 2008, but officials and law enforcement “failed to intervene effectively.” An estimated $46 billion to $120 billion is laundered through Canada each year..It’s an old problem, according to Larry Comeau, a former Mountie who retired in 2001. When the RCMP first set up Proceeds of Crime Investigation units in major cities, he was attached to the Ottawa unit..“The consistent problem has always been getting enough seasoned investigators to tackle these crimes coupled with the financial resources to conduct these complex investigations, often involving foreign countries,” Comeau told the Western Standard..“I remember the US Drug Enforcement Agency once labelling Canada a money laundering haven.”.Convictions have never been easy, Comeau said..“Because money laundering is purposely designed to hide evidence, especially any paper trail, as in the case of major frauds, it gets very complicated to both present and prove cases in court. Judges and juries often are not familiar with such criminal schemes. These often are year-long investigations…complicated to present in an easily understood fashion,” Comeau explained..“You first have to prove the money being laundered was gained illegally through drug trafficking or another criminal activity, then how it was invested to clean it. Anything bought with proceeds of crime such as houses, boats, vehicles, paintings, goods, can be confiscated if that can be proven.”.The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) was created in 2000 to deal with financial crimes and requires institutions to report transactions over $10,000. However, money launderers skirt this by dealing with cash instead of bank transfers..The federal government created a Financial Crime Coordination Centre within Public Safety Canada to handle financial crime. In 2019, Ottawa dedicated of $319.9 million to strengthen the Anti-Money Laundering and Anti-Terrorist Financing Regime, with $48.8 million ongoing. A new Financial Crimes Agency is also expected..Vanessa Iafolla, a fraud prevention and loss consultant and instructor at Wilfred Laurier University, wonders if the new agencies will do any better than the old ones..“As much attention as financial crime is being paid, there's not a lot of real sustained focus that's happened,” Iafolla said in an interview with the Western Standard..“I'd like to believe that the federal government's Financial Crimes Agency of Canada comes into being and works in a sustained way, but that was what FINTRAC was supposed to be. And that hasn't exactly borne through either. So, are we just adding layers of bureaucracy to the problem?”.Anecdotal accounts don’t give Iafolla confidence, either..“Fraud victims tell me the same thing. People say things like, ‘I reported my victimization to the police, and I heard back from an officer briefly a few days later, and then then six weeks and nothing,’ or, ‘I follow it up and I follow it up, and they don't have any information,’” Iafolla said..“[They] don't have results at the end of the day. They don't. And that is concerning to me as a Canadian. I don't want Canada to be a place where casinos are attractive spots for laundering money or where our real estate market is used to house illicit funds from kleptocrats or drug smugglers.”.McGuire pointed to some hopeful signs and avenues for change..“One of the things that they're starting to do, which is heartening, is…a meeting of law enforcement and prosecution and the judiciary to train each other and understand what the existing standards are and how we can work within the existing framework,” he said..The consultant said he was “blown away” by the internal discipline shown by the Law Society of BC regarding anomalies in their trust accounts..“There's at least four discipline cases that come out in the last month of lawyers who have been found to be using their trust accounts to help shield the proceeds of crime. Often it just results in disbarment. That's not as much as we would like, we want to deprive the criminals of the profits, we want to get them off the streets. But it's at least shining a big light on the issue.”.McGuire believes there’s more hope in civil forfeiture than criminal prosecution, partly because the former doesn’t require as high a degree of certainty for conviction. He believes a better budget for governments pursuing this route could be helpful..Iafolla also believes a sustained focus with better resources could make an impact. She just wants Canada to get on with it..“I love our country. And I want to believe that we have the possibility, we have the talent, we have the resources, we have the skills, we have everything we need to better deal with the problems that we are facing. And I'm ready for people to do it. We're all ready for people to do it. So, let's make this happen.”
