Financial Crimes

According to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), money laundering is “the process used to disguise the source of money or assets derived from criminal activity.” ^[1] Such criminal activities may include drug trafficking, fraud and extortion.

Techniques for money laundering can vary widely, but FINTRAC notes there are generally three stages:

1. Placement: involves placing the proceeds of crime in the financial system;
2. Layering: involves converting the proceeds of crime into another form and creating complex layers of financial transactions to disguise the audit trail and the source and ownership of funds (e.g., the buying and selling of stocks, commodities or property); and,
3. Integration: involves placing the laundered proceeds back in the economy under a veil of legitimacy. ^[1]

ALERT works closely with FINTRAC on many investigations to monitor the finances of organized crime groups. Seizing bank accounts and assets is one of the most effective ways of disrupting and dismantling organized crime groups to make sure their criminal activities cannot continue.

Organized crime groups can be involved in a number of different fraud schemes. These can involve anything from stealing payment card information to attempting to dupe people through event tickets, pets, employment or rental accommodations.

MASS MARKETING SCAMS REPORTED TO EDMONTON POLICE SERVICE, 2017 ^[2]

If you have become a victim of fraud, contact your local police department’s non-emergency line to file a report. You can also contact the Canadian Anti-Fraud Centre at 1-888-495-8501 or http://www.antifraudcentre-centreantifraude.ca.

In Alberta, organized crime groups have not only been caught making fake Canadian currency, but also counterfeit currency from the United States and India, as well as bus passes and personal documents.

According to the RCMP, a total of 17,504 counterfeit Canadian bank notes were passed across the country in 2016, and 3,362 notes were seized. Of the total number passed and seized, 36% were $20 bills, while 35% were $100 bills. Twenty-one per cent of that total was either passed or seized in Alberta. ^[3]

The Bank of Canada notes that between 2008 and 2017, both the number and the value of counterfeit notes passed has decreased by almost 80% thanks to new anti-counterfeiting features that have been phased in since 2011. ^[4] However, it remains an issue because it has an economic impact on the people and businesses who accept them and undermines public confidence in currency. “The financial loss from a counterfeit note can be significant for individuals and businesses alike,” the Bank of Canada says. “Whether it’s a small retailer or a large business, the loss incurred from accepting a single counterfeit $100 note can affect a day’s profits or lead to increased prices that are ultimately borne by the consumer.” ^[4]

While seizing drugs is an important part of what ALERT investigators do, perhaps the most important aspect of disrupting and dismantling organized crime is hitting criminals in their pocketbooks, hampering their ability to undertake criminal activity.

To that end, ALERT has seized $6.37 million in cash proceeds of crime since December 2011. Other assets seized include vehicles and houses, including a $1-million home in north Calgary as part of Project Offshore in November 2017.

In Alberta, cash and goods seized through police investigations and believed to be gained from or used to commit crime are forwarded to the Civil Forfeiture Office. Forfeited cash and funds generated through the sale of forfeited property are used by the provincial government to compensate identifiable victims of crime and fund community-based programs that support victims of crime, including family violence shelters and gang-reduction programs. These funds may not be used to fund law enforcement, including police training or equipment. ^[5]

If the owner of the property opposes civil forfeiture, a court hearing is held. If a judge finds the property was indeed gained from or used to commit a crime, he/she can rule that the property be:

• returned to any party claiming an interest in the property who can prove they both weren’t involved in the crime and didn’t know the property was gained from or used to commit a crime;
• sold, with the funds used to pay out innocent creditors;
• returned to the original victim(s);
• sold, with the funds used to compensate other victims of crime; or
• forfeited to the provincial government, to be used to support crime prevention and victims of crime programs. ^[5]

In 2017-18, the Alberta government distributed $2 million grants to community-based programs from civil forfeiture funds. ^[5]