The federal RCMP team responsible for money-laundering crimes in British Columbia is running with a skeleton staff that refers files to the provincial civil forfeiture office, rather than conducting criminal investigations and laying charges.
B.C. Attorney-General David Eby released the details on Monday, saying the staffing revelations explain why the RCMP has a dismal track record for prosecuting money laundering.
The federal money-laundering team has, on paper, 25 positions in B.C. In practice, there are currently five RCMP members on the job, and they are responsible for moving files out of the criminal justice system, to a civil system that is designed to recoup the proceeds of crime.
The details emerged from an independent report by former RCMP deputy commissioner Peter German on money laundering. Most of the report will be released later this spring. Mr. Eby said the findings demonstrate an urgent need for Ottawa to step up with qualified staff to tackle an issue that has given the province an international reputation as a haven for money laundering.
“We know that the money launderers are here, that they’re already rich, they’re already experts and they’re clearly better resourced," he said. "What I really want to come out of this is a significant shift in how law enforcement around this issue is approached.”
B.C.’s Civil Forfeiture Office does not need a criminal conviction or even charges to pursue a file. It has pursued civil claims where criminal cases into money-laundering have collapsed. But the Attorney-General said that is not enough.
“It is profoundly concerning for me that in the federal serious and organized crime unit, that is supposed to be dedicated to money laundering, the only apparent activity that’s taking place is referrals to civil forfeiture," Mr. Eby said. "What we really need to have is criminal investigations and prosecutions, and civil forfeiture is a complement to that. It is not the entirety of it.”
The findings were delivered on Friday to the federal Organized Crime Reduction Minister, Bill Blair. Mr. Blair’s office provided a written statement on Monday, noting that Ottawa has committed significant new funding and additional Criminal Code powers in response to concerns raised by Mr. Eby last year.
Last December, Mr. Eby asked whether police and prosecution have the capacity to handle large-scale financial crimes, after the collapse of a money-laundering case, dubbed Project E-Pirate, allegedly involving hundreds of millions of dollars.
This year’s federal budget promises a funding boost for anti-money-laundering initiatives, and much of the new money is expected to come to B.C.
The B.C. RCMP’s Kevin Hackett, criminal operations officer for federal, investigative services and organized crime, said in a statement the force is juggling budgets, and recruitment and retention. “We are mindful that the costs associated to delivering on policing, particularly in complex money laundering investigations, have increased over the years. We are continuously adapting to ensure that our human and financial resources are prioritized and aligned to address the greatest risks to public safety.”
“Our government takes the threat posed by money laundering and organized crime to Canada’s national security and the integrity of our financial sector very seriously,” Mr. Blair’s statement read.
Just in the past year, information about specific cases has emerged pointing to billions in ill-gotten gains being washed through B.C.’s gambling and real estate sectors.
B.C. has its own investigative police team that deals exclusively with casinos, but Mr. German noted the issue is broader. The province relies on the federal unit for other investigations.
The German report looks at money laundering in real estate, horse racing and luxury cars.
Mr. German said the federal shift away from commercial crime and proceeds of crime investigations likely began in 2012, when resources were funnelled into terrorism and organized crime. Amid austerity measures in Ottawa, the RCMP abolished its specialized proceeds of crime section, and its roster of financial crime specialists were shuffled into other areas.
Christine Duhaime, a financial crime and anti-money laundering specialist with Duhaime Law, said Mr. German’s findings are a serious blow that will only worsen B.C.'s reputation as a place to launder dirty money.
“This is part of the answer of how we got here. Criminal organizations look to where there is a weakness, because where there is a weakness, they can get away with whatever they want to get away with, because the chances of being prosecuted are probably very slim," she said. Even if the 25 positions were fully staffed tomorrow, she added, there would be a backlog of cases likely going back years.
“It’s pretty serious, it’s saying there is no oversight and no real enforcement in this area for the whole province – it’s a little bit crazy," she said in an interview.