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Ontario police forces worked together on Project Blackhawk, targeting drug trafficking and money laundering.
Ontario police forces worked together on Project Blackhawk, targeting drug trafficking and money laundering.

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Money laundering going largely unpunished in Canada Add to ...

For the first time, a federal agency has crunched the numbers on money laundering in Canada - and the scorecard shows that, so far, the criminals remain largely unknown and unpunished.

The Canadian Centre for Justice Statistics says while the reported number of money-laundering crimes has "increased considerably" in the past decade, law enforcement has had little success in finding the culprits, much less putting them behind bars.

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A recent bulletin by the Statscan agency reveals that police have been able to identify the suspects in less than a fifth of the cases and, even when they do, prosecutors have succeeded in getting convictions only a third of the time.

"It comes down to a tremendous weakness in our investigative and prosecutorial forces," said Garry Clement, the former director of the RCMP`s Proceeds of Crime program, who has been an expert witness at a dozen money-laundering trials in recent years.

Canada has been harshly criticized for its poor record of cracking down on money laundering and corruption by several international monitoring organizations this year, including Transparency International, the OECD and the Paris-based Financial Action Task Force.

The RCMP estimates that between $5-billion and $15-billion is laundered in Canada every year, as criminals try to "clean" their dirty money through the financial system.

But the Statscan report found that police were able to identify the suspects only 18 per cent of the time, about half the proportion of suspects identified for crimes in general. Even if a suspect is identified, in only a third of the cases where money-laundering was the most serious charge did the Crown succeed in getting a guilty verdict, compared to a two-thirds success rate for adult court cases in general.

The study also found money-laundering cases were stayed or withdrawn at more than double the proportion of court cases in general.

But Simon William, who co-ordinates proceeds-of-crime cases for the Public Prosecution Service of Canada, said it is misleading to compare complex money-laundering files with other offences. "We have to be really careful," he said. "You have to look at it case by case."

He said even if there is a plea bargain or a stay, the Crown seizes the goods and assets involved in the crime. "We always get the forfeiture of properties," he said.

Mr. Clement, who has been involved in one ongoing case in Montreal that has dragged on since 2005, said overburdened prosecutors will frequently plea bargain away the money-laundering charge in exchange for a more certain and less complicated conviction on the underlying offence, such as drugs.

"They are long and arduous trials," said Mr. Clement.

The Statscan study found the rate of reported money-laundering crimes shot up five-fold between 2004 and 2006, and has levelled off since then; that led to police recording 525 "incidents of money laundering" in 2009, the latest year the agency was able to study.

It takes resources to prosecute those cases. But the budget for the RCMP's Proceeds of Crime work has been frozen since 1996 - despite 15 years of salary increases, a flurry of new laws and the explosion of Internet-related financial crime.

"On paper, Canada has built a Rolls-Royce when it comes to fighting money laundering," said Mr. Clement, noting an elaborate system of regulations and reporting agencies has been put in place. "But we forgot to put in the engine - an effective law enforcement that can take on these complicated cases."

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