‘Dirty Money’: New book explores how financial crime is plaguing Canada

A vast “financial world” operates in Canada, whose members commit fraud and other financial crimes without being punished, corroding communities, undermining democratic institutions and even the country’s prosperity, say the authors of a new book.

Indeed, elected leaders at all levels encourage and encourage financial criminals by failing to combat them or even trying to obstruct their efforts to break the law, according to the co-authors of Dirty money: financial crime in Canada.

“Canada is a prime destination for laundering ill-gotten gains with impunity,” say Jamie Ferrill and Christian Leuprecht, co-editors of Dirty money. They also wrote some of its 16 chapters.

Leuprecht is a professor at Queen’s University, security expert and author. Ferrill is a Canadian political sociologist who spent eight years at the Canada Border Services Agency before becoming a professor of financial crime at the Australian Graduate School of Policing and Security at Charles Sturt University in Canberra, Australia. The two men do not mince their words.

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Christian Leuprecht, co-editor of “Dirty Money: Financial Crime in Canada,” is a professor at Queen’s University and director of the Queen’s Institute of Intergovernmental Relations.

Terry Ratcliffe / Queens University

“Numerous investigations that ultimately came to nothing have exposed weak legislation and an under-resourced law enforcement regime that is clearly not fit for purpose. The chances of getting caught are almost zero, civil and criminal asset forfeiture is low, and the penalties are negligible,” their book states.

The 417-page tome is published by McGill-Queen’s University Press. This is an unprecedented, albeit timely, effort led by a leading group comprised of the nation’s top financial crime investigators, intelligence professionals, lawyers and financial crime thinkers.

Made up of a wide range of men and women, academics and private sector leaders, they have painstakingly assembled everything the Canadian public should know about what is happening (or not happening) in Canada, in the hope that revealing and discussing the problems will raise public awareness and spark reforms. .

We must act because the current situation is not good, say Leuprecht and Ferrill. Globalization is becoming an accelerator of financial crime because Canadian authorities “struggle to do the bare minimum,” let alone coordinate transnational criminal investigations, the co-editors say.

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“Dirty money drives up the cost of housing, worsens gang violence and related shootings, drives synthetic opioids manifesting in an epidemic of overdoses, enables human trafficking, and other forms of gross exploitation, funds the proliferation of nuclear weapons by rogue states, and helps malicious countries evade international sanctions while allowing foreign interference in Canada’s democratic institutions by state actors and hostile non-states,” their book says.

“Financial fraud is steering seniors away from their retirement savings and ransomware costs businesses billions in losses each year. The public bears the costs: through rising prices, taxation (lost revenue and increased tax costs for law enforcement) and increased insurance premiums,” the book adds.

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The book includes chapter contributions from prominent financial crime fighters from English and French Canada, exploring money laundering, underground banking, organized crime groups and anti-money laundering efforts, as well as financial intelligence activities.

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One chapter examines the mysterious inner workings of the country’s top-secret financial intelligence agency, the Financial Transactions and Reports Analysis Center of Canada, known as FINTRAC.

Katarzyna McNaughton, a visiting postdoctoral researcher at the Royal Military College of Canada in Kingston, Ontario, reveals that FINTRAC produces and transmits to police services a large volume of proactive communications on potential major financial crimes.

However, information disclosures often go unused or implemented within police departments because investigators are already overwhelmed by their own mountain of cases, McNaughton writes, citing an unidentified former FINTRAC employee as a source. (This same information also appeared in an RCMP briefing note earlier this year.)

FINTRAC spokesperson Darren Gibb disputed those claims, saying 96 percent of comments FINTRAC received last year from law enforcement and national security agencies “indicated that its intelligence financial resources were both valuable and exploitable.

Gibb said in an emailed statement to Global News that FINTRAC provided 2,085 financial intelligence disclosures last year to support money laundering and terrorist activity financing investigations in Canada and around the world – or nearly six disclosures every day. The center’s intelligence has contributed to 292 major, resource-intensive investigations as well as “several hundred other individual investigations” at the municipal, provincial and federal levels across the country, Gibb added.

Another chapter explores how criminal organizations use government-run casinos and real estate deals to support their illegal activities and launder dirty money into the clean economy.

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Two additional chapters explore the insidious nature of “trade-based money laundering,” or criminal organizations using legitimate businesses to conceal the money laundering of their crimes.

Dirty money discusses the scale of profits from criminal activity in Canada, with informed estimates of between $46.7 and $54 billion per year. Whichever estimate you favor, it remains enormous and more than 2,000 organized crime groups across the country are involved.

“This is the equivalent of the GDP of Nova Scotia in 2018,” writes Denis Meunier, former deputy director of FINTRAC turned anti-money laundering consultant. Meunier explores the dysfunction of Canada’s anti-money laundering regime in another chapter.

Saana Ahmed

Sanaa Ahmed, assistant professor of law at the University of Calgary, offered a critical assessment of Canada’s anti-money laundering efforts in her chapter.

University of Calgary

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The book also devotes a chapter to cryptocurrency laundering, and another on the state of money laundering regulation and enforcement by Sanaa Ahmed, an assistant professor of law at the University of Calgary, who could leave you sleepless.

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Ahmed explains how Canada, despite a robust anti-money laundering regime, generates dismal results because the country lacks a clear national commitment to combating these harms. The country repeatedly fails to deliver on its promises due to missteps, shifting priorities and insufficient resources.

Instead, money laundering has become an industry within the broader Canadian political economy, Ahmed says.

The federal and provincial governments’ commitments and declarations against money laundering are of questionable value when compared to a multitude of seemingly contradictory and ineffective policies, weak regulations and inaction, she writes.

“Given the state’s demonstrated and repeated inability to deliver on its promises, how reasonable is the presumption that the Canadian state wishes to prevent or even contain money laundering? Ahmed asks. “This may be why the Canadian state uses one set of policies (money laundering regulations) to appease cheap housing lobbyists and another set of policies (investment and immigration policies ) to protect its own interests and appease those who have come to rely on laundered money. for their livelihood. »

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