Money Laundering

What is Money Laundering?

 “The process used to disguise the source of
money or assets derived from criminal
activity”
 Include:
 Drug trafficking
 Extortion
 Corruption
 Fraud
 They try to “launder” the money so that the
source cannot be found.
 International Monetary Fund estimates
$900 billion to $2.25 trillion annually
worldwide.
 Government of Canada estimates
 the amount in Canada to be in the billions!
Why do the laundry?
Criminals want to:
 Avoid prosecution
 Increase profits
 Avoid seizure of accumulated wealth
 Appear legitimate
 Tax evasion

They are trying to conceal the origin of the cash

Money Laundering Legislation
 The financial Transactions and Reports
Analysis Centre of Canada (FINTRAC) is
the Canadian agency responsible for
initiatives in this country
 Created in July 2000
 Independent agency
 Arms length from police & other gov’t
agencies
What does FINTRAC do?
 Collects reports on financial transactions
and analyzes them
 If reasonable grounds exist to suspect the
info would be relevant to investigating or
prosecuting a ML offence it will go to the
Law Enforcement Agency.
 If there are threats to Canada they disclose
to CSIS.
FINTRAC and Privacy
 Required by Law to protect the personal
information it receives from unauthorized
disclosure
 Criminal penalties for FINTRAC employees
who unlawfully disclose info
Who must report to FINTRAC?
 Financial entities (banks, credit unions)
 Life insurance cos, broker or agents
 Securities dealers
 Persons engaged in foreign exchange dealings
 Money services businesses
 Accountants & accounting firms
 Real estate brokers
 Casinos
 Individuals – whether a Cdn citizen or not & any entity who is
importing or exporting currency or monetary instruments of
$10,000 or more.
What must be reported?
 Suspicious activities
 Large cash transactions over $10,000 or
more
 International EFTs > or = $10,000
 Cross-border currency or monetary
instruments of or = $10,000
Deadline to Report
 Deadline for reporting a suspicious
transaction is 30 days after the transaction
occurred.
 Deadline for reporting cash transaction of
over $10,000 is 15 calendar
days after the transaction
occurred.
What if you ignore?
 Failure to report a suspicious transaction or to
make a terrorist property report - up to five years
imprisonment and/or a fine of $2,000,000;
 failure to report a large cash transaction or an
electronic funds transfer - a fine of $500,000 for a
first offence and $1,000,000 for each subsequent
offence;
 failure to retain records - up to five years
imprisonment and/or a fine of $500,000; and
 failure to implement a compliance regime - up to
five years imprisonment and/or a fine of $500,000.
Common money laundering
techniques
 Structuring- Also called smurfing
 Bank complicity
 Asset purchases with bulk cash
 Postal money orders
 Credit cards
 Gambling in casinos
 Refining