Is a money laundering avalanche about to smack Canada?

If you believe some of today’s headlines, the answer is yes

Richard Paxton
Apr 1, 2016 · 3 min read

According to a report issued by Transparency International, Canada is one of the least corrupt countries in the world. And, thanks to its FINTRAC unit, it has long been rumored to be one of the toughest enforcers of money laundering regulations at the government level unit. However, reports are now emerging in its media outlets about new money laundering opportunities and threats in Canada — proof that no country is truly immune to the evils of financial fraud. My take? Since these are just threats and not real cases, I think they may be indicators of Canada’s strength, rather than weakness.

I fear too many North American readers of news stories today only catch the headlines and fail to digest the actual content. They see a headline that says liquor stores, casinos or real estate companies in Canada could fall victim to money laundering schemes, and walk away from the article thinking that the country has somehow lost its tough grip on its regulations. In actuality, nothing could be farther from the truth.

Unlike most government operations, FINTRAC is very proactive. Here are some examples of headline topics that have emerged over the past month: 1) details on 55 Vancouver-based real estate firms that are not following strict money laundering regulations; 2) a report that customers in BC are spending over $10,000 on alcohol purchases; and 3) how Canadian casinos have ‘allegedly’ laundered millions of dollars. These articles are not the result of journalistic investigations, but report on FINTRAC’s proactive approach to money laundering.

Why would FINTRAC and other government agencies willingly give details of investigations to the press? Certainly there is some back-scratching going on, but perhaps the Canadian government is just being savvy. Maybe it understands its citizenship and the deterrent power of creating paranoia where corruption is concerned?

Both concepts would certainly be supported by the current research. The Alacer Group recently crunched two separate pieces of data gathered by Transparency International and discovered that, when it comes to corruption, Canadians are the most paranoid citizens in the world. They’re suspicious of bankers, the government and its representatives, even though Canada is one of the least corrupt countries in the world, ranking ninth out of 167 (for reference the US is ranked 16), as you can see by clicking this link to TI’s map.

Now, I don’t want to paint Canada as a country that has completely mitigated its money laundering and financial fraud issues — that is not a realistic possibility in any country. Canada has strict regulations and a very proactive regulator in FINTRAC, but money laundering cases still slip through the system. In fact, just this month two cases appeared in the media:

Convicted Canadian narwhal tusk smuggler extradited to U.S. (not an April Fool’s joke!)

SQ targets contraband tobacco, money laundering in raids

In spite of the best efforts of regulators, banks, financial consultants and robust programs to kill money laundering, it still happens every day in every country across the world. Money launderers constantly change their techniques and targets. It is one reason the Alacer Group exists and continues to thrive.

Richard Paxton

Written by

CEO of the Alacer Group. Sharing the latest news in financial crimes and best practices that enable financial institutions to prevent money laundering.