Gangsters and transnational criminal networks are exploiting long-standing B.C. staffing shortages at the RCMP’s money-laundering unit, knowing they are unlikely to face criminal charges and that any civil-forfeiture proceedings will only target a fraction of their assets, according to experts.
This week, Peter German, a retired senior Mountie examining the issue in British Columbia, found there are only five officers in the province working for the Federal and Serious Organized Crime unit investigating offences such as money laundering, 20 officers (or 80 per cent) shy of the mandated total. E-mails between the B.C. government and top RCMP brass from December, 2015, obtained by The Globe and Mail through Freedom of Information laws, show the level of staffing in this federal unit was only marginally better several years ago, with 43 per cent of its positions left vacant.
That handful of officers who are now working in this unit, Mr. German stated this week, are only forwarding money-laundering cases to the B.C. Civil Forfeiture Office, which means they have exhausted the possibility of criminal charges.
“Both civil forfeiture and criminal [prosecutions] have a part to play in this, but one in the absence of the other is not good,” Mr. German said in a phone interview Tuesday. “You don’t want to just send everything off to civil forfeiture because then why do you have these Criminal Code provisions?”
The biggest problem with this one-sided approach, according to other money-laundering experts, is the civil-forfeiture process, despite undergoing a current overhaul, only ever captures up to half the overall assets of the sophisticated criminals being targeted.
“You’re putting a very small Band-Aid on a huge problem by doing that," former RCMP superintendent Garry Clement said of the current approach. “If you’re not going after and uncovering all the numbered companies and shell companies or [people who hide the identity of true owners], you‘re not getting all the assets, because that’s how organized crime works."
Pat Fogarty, a former Vancouver police officer who led the organized crime section of B.C.'s Combined Forces Special Enforcement Unit gang squad for five years before retiring in 2013, said the Mounties clearly lack the expertise and staffing levels to conduct parallel investigations into proving that the assets being targeted are the proceeds of crime. When referring a case to the civil-forfeiture office, investigators only have to prove on the balance of probabilities that these were gained from criminal activities, whereas a criminal case must prove this beyond a reasonable doubt, he said.
That parallel, more complex, criminal investigation or “archeological dig” is imperative in targeting the hidden assets of a drug kingpin, he said.
“Once you finish that [criminal investigation] then you serve him with restraint orders on each and every property and now you’re seeing a grown man cry, because you’re seizing all his properties,” said Mr. Fogarty.
Mr. Clement, a private financial-crime investigator who ended a 30-year RCMP career as the director of its Proceeds of Crime program in 2003, said Mounties still need to fully understand their shortcomings on this issue and likely would need to create partnerships with private experts in order to beef up their investigative capacity as fast as possible.
“It’s not going to happen overnight,” he said, adding that it takes about five years of experience before an officer becomes an expert investigator of this crime.
The release of Mr. German’s initial findings comes on the heels of a U.S. State Department analysis last month that called on Canada to take steps "to increase enforcement and prosecution” of its considerable money-laundering problem. That report noted only 169 trials on charges of money laundering have led to convictions in recent years, citing official data from 2010-14, which the report stated were the most recent available.
Last December, questions were raised in B.C. about 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.
With a report from Colin Freeze