Money laundering is a big-time crime

Former RCMP investigator visits Vancouver to advocate a public-private network aimed at combating the practice

By Kent Spencer, The Province

Gary Clement conducted a conference in Vancouver for people interested in coming to grips with money laundering.

Photograph by: NICK PROCAYLO , PNG

Veteran crime fighter Garry Clement says the story of money laundering in the world today is one of “greed triumphing over ethics.”

The former RCMP investigator has brought his expertise to Vancouver to institute a local chapter of the Association of Certified Anti-Money Laundering Specialists, an organization with thousands of members around the world.

“This was about creating something in Vancouver’s back yard, a place where problems can be talked about and public-private networks created,” said Clement, who owns an Ontario-based company called the Clement Advisory Group.

The conference, which was attended by 65 people, explored ways to prevent money laundering, close loopholes and impose tougher penalties.

“The only way we will ever get a handle on this is our ability to work together,” he said.

He said money laundering literally means turning dirty, criminally-generated funds into legitimate cash by flushing it through the mainstream economy.

Crimes range from something as innocuous as paying a tradesman in cash (to cheat the taxman), to allowing millions in funding for terrorists to flow electronically around the world.

Clement said casinos are a favourite target. One technique used to convert small amounts is called “smurfing.”

“I would collect a group of people and give them each less than $10,000 in cash. They would buy chits and gamble over 24 hours, keeping their losses to 10 per cent. At the end of it, they would pass the chits back to me and I would come out with a cashier’s cheque for a large amount,” he said.

“It’s difficult to police because casinos find it hard to keep track of how much money is bouncing around the slot machines.”

Casinos, meanwhile, say safeguards are set up to prevent just such transactions taking place.

“It can’t happen under the rules in place. You can’t just pretend to play, not with the amount of surveillance we have here,” said Howard Blank, spokesman for Great Canadian Casino.
Clement said too much focus in B.C. is given to the cash generated from the hydroponic marijuana industry.

Drug profits are “co-mingled” with legitimately-owned businesses such as pizza parlours and corner stores.

“The businesses might generate $50,000 legitimate cash each week and $100,00 worth of drug assets are poured in,” he said. “The money has been legitimized.”

Clement was employed by the RCMP for several decades. High-profile cases included undercover work at the Penthouse Cabaret in the 1980s and a notorious international tobacco smuggling case, which included 22,500 cartons of cigarettes brought to a Richmond warehouse in 1996.

He said one significant problem that doesn’t receive enough attention is Internet fraud.

He knows of a case where two lonely widows joined an Internet dating site and were bilked out of $1.6 million by “someone I’ll loosely call a gentleman.”

“These sites are having a huge impact and generating millions of dollars. They allow predators to go after people. They should be shut down,” he said.

Sometimes, department store gift cards are purchased in cash and then resold at a discount, he said.

Several high-profile cases have occurred recently:

Insp. Barry Baxter, head of the B.C. RCMP’s proceeds-of-crime section, said in 2011 that B.C. casinos were failing to flag large cash transactions as suspicious, making the fight against money laundering more difficult.

Baxter said in one case someone bought $250,000 in chips with $20 bills and the casino only reported it as a large transaction, not as a suspicious one, as it should have been.

One type of illegal transaction involves coming into Canada with undeclared cash.

Canadian customs agents at Vancouver International Airport seized $15 million undeclared cash in fiscal 2011-12, tops in the country. Most of it came from China, where the wealthy are trying to smuggle their fortunes out.

The HSBC multinational banking company agreed to pay a $1.9-billion penalty in 2012 after U.S. officials said that it had helped international drug traffickers transfer funds around the world. HSBC has operations in Canada.

Four Canadians behind the online gaming company Bodog were indicted by a federal grand jury in the U.S. in 2012 on charges of conspiring to commit money laundering.

Read more: http://www.theprovince.com/news/Money+laundering+time+crime/8208357/story.html#ixzz2PtDlEkZM