RCMP creates new role to crack down on money laundering in B.C.
Former Crown prosecutor now a special adviser
Amid growing fears that the Vancouver region has become a hotbed for money laundering, Mounties in B.C. have tapped a former Crown prosecutor to help them step up their investigation of financial crimes.
The selection of John Ahern as a “financial crime special adviser” based at the RCMP’s Surrey, B.C., headquarters comes at a time of heightened concern that illicit money is being funnelled through Lower Mainland casinos, and possibly other sectors, on a large scale.
Within the international intelligence community, B.C. has become “infamous” for money laundering, David Eby, B.C.’s attorney general, told the House of Commons finance committee in Ottawa in late March. Eby said he was stunned when he was shown video of people wheeling suitcases packed with $20 bills to casino cages.
“I was astounded by the audacity of those involved. On a purely practical matter, $800,000 in twenties is very heavy. It looked like they were helping somebody move a box of books.”
In a written statement to the National Post this week, Eby said while he was encouraged to hear about the RCMP’s appointment of a special adviser, significant gaps remain in enforcement, which he characterized as a “massive failure.”
“It’s a bigger issue than just B.C.,” he said. “It’s an international issue and we need that support to deal with it.”
The special adviser will be expected to give advice to investigators, review case files, serve as an expert witness in court, assist in the preparation of search warrants, and provide training on financial crime topics, according to details posted on the federal government’s tendering website. The oneyear, $217,000 contract could be extended for up to four years.
Though members of the public still have a couple of weeks to submit their names for the job, the public notice states that Ahern, who is a former RCMP member and spent years prosecuting serious financial crimes, “is believed to be the only known consultant capable of performing the duties outlined” and the government intends to award the contract to him.
Ahern, who has already updated his LinkedIn profile to reflect the new position and has voice mail set up at Surrey headquarters, referred requests for comment to the RCMP, which did not respond by press time.
Money laundering concerns ramped up last year after the release of an audit by accounting firm MNP that focused on “large volumes of unsourced cash” being accepted at the River Rock Casino Resort in Richmond, B.C. The audit revealed that approximately $13.5 million in $20 bills was accepted at the casino in July 2015 alone.
“Law enforcement intelligence has indicated that this currency may be the direct proceeds of crime,” the report said. “The majority of this cash is being presented by persons commonly referred to as high roller Asian VIP clients. Single cash buyins in excess of $500,000 with no known source of funds have been accepted at (River Rock).”
In the wake of that report, the province appointed former RCMP deputy commissioner Peter German to conduct an independent review of B.C.’s anti-money laundering policies, with a focus on the gambling industry. His final report is expected to be made public in the coming weeks.
In the interim, the province has enacted two of German’s recommendations: that casino patrons who deposit cash or bearer bonds in excess of $10,000 be required to identify the source of those funds and that government regulators be onsite 24/7 at large, high-volume casinos to help assess any suspicious transactions.
But “we’re still not done yet in terms of solving this problem,” Eby testified in March.
Eby alluded to a potential nexus between illicit money flowing through casinos and money laundering in the “out-of-control” real estate market. Eby cited a report by Transparency International Canada that analyzed land title records attached to the 100 most valuable residential properties in the Vancouver region.
Nearly half of the homes, according to the report, were held through structures that hid their true — or beneficial — owners. Almost one-third were owned through shell companies and about 11 per cent listed a nominee on the title.
Currently, the real estate and casino industries are among the sectors required to file suspicious transaction reports to FINTRAC, the federal body tasked with detecting money laundering and terrorist financing.
But Eby testified that he is concerned the reports FINTRAC sends to police or the Canada Revenue Agency for followup investigation end up “gathering dust,” as there have been so few prosecutions.
A FINTRAC spokeswoman said this week the agency has seen a 180 per cent increase in suspicious transaction reporting from the real estate sector and a 127 per cent increase from casinos compared to previous years.
She added that FINTRAC does have a mechanism for tracking files that are forwarded to law enforcement but said federal law prevents the agency from saying anything further about what becomes of those files.