Investigation: Money-laundering prosecutions rare, difficult in B.C.; convictions of B.C. residents more likely in the United States
B.C. Attorney General David Eby revealed Monday his government’s second review of money laundering, this one studying real estate, is also examining the lack of money-laundering prosecutions.
Postmedia published the results of investigation that showed successful money-laundering prosecutions in B.C. are rare and convictions of B.C. residents are more likely in the U.S.
“It confirms some of what I have heard anecdotally from people involved in law enforcement … that it is difficult, if not impossible, to get convictions for money laundering in Canada,” Eby said Monday of the findings.
“And there is a concern that some of the prosecutions are being farmed out to the United States, instead of going ahead in Canada where they should have gone ahead, because of that,” said Eby.
The first independent report by Peter German, a former RCMP deputy commissioner, was released in June 2018 and concluded money from organized crime was being laundered through Lower Mainland casinos.
Eby then commissioned German to examine money laundering in the real-estate, horse racing and luxury-car sectors, with a report due by the end of March.
On Monday, Eby said, he has already asked German as part of his second review to determine why there are few money-laundering prosecutions, including whether there is a lack of investigative and/or prosecutorial capacity.
“I gave (German) examples of specific cases where it appeared that other countries were well ahead of Canada in knowing what was going on — and prosecuting cases,” said Eby. “It is a very significant concern of mine.”
Police and experts say the reasons for the lack of prosecutions include issues such as availability of resources and expertise, case management problems, setting of priorities and difficulty in proving money laundering is tied to criminal activities.
But it also includes challenges, said police, related to the huge amounts of information that must be disclosed to the defence, as well as new deadlines for prosecutions, a result of a precedent-setting 2016 Supreme Court of Canada decision.
Critics have suggested a separate federal policing unit with expertise in money laundering is needed.
Eby said he believes any federal government changes will take time, which is why the province is proceeding wherever it can.
Federal Crown prosecutors handle most money-laundering cases.
The Public Prosecution Service of Canada has declined interviews and has not answered Postmedia questions about it challenges in money-laundering investigations.
The federal prosecution service has 101 employees in B.C., according to its latest annual report from 2017-18, down from 114 in 2009-10. The prosecution service would not say how many were lawyers in 2017-18, although in previous years it has ranged from 65-70. “As with any organization, there are many factors that can contribute to fluctuations in staff levels,” spokesperson Nathalie Houle said in a brief written statement.
A federal parliamentary committee last year reviewed Canada’s anti-money laundering regime and made more than 30 recommendations to improve the system. The recommendations include changes in criminal and privacy laws to assist money-laundering investigations and to add “any necessary” resources for law enforcement and prosecutors to pursue money-laundering and terrorism-financing activities.
In a written statement, a federal Finance Department spokesperson, Pierre-Olivier Herbert, said the recommendations are being carefully reviewed. “A comprehensive government response will be given in the coming weeks,” said Herbert.
He added that minister Bill Blair’s office, which has responsibility for border security and organized crime reduction, is enhancing the RCMP’s investigative and intelligence capabilities in Canada and abroad.
But federal NDP finance critic Peter Julian, who was vice-chair of the committee that reviewed Canada’s anti-money laundering regime, said he has no sense the Liberal government will take the necessary actions to curtail money-laundering, including helping dramatically underfunded institution such as the RCMP. “The report seems to have landed on somebody’s desk and been filed away,” said Julian, MP for New Westminster-Burnaby.