White-collar criminals have little to fear from the Canadian judicial system, in which nearly all money laundering charges get thrown out before trial, according to statistics obtained by the Star.
Eighty-six per cent of charges for laundering the proceeds of crime laid between 2012 and 2017 were withdrawn or stayed, according to data from Statistics Canada’s Integrated Criminal Court Survey.
A mere nine per cent of money laundering charges during that period resulted in a guilty plea or a conviction.
“A conviction rate like that is pretty abysmal,” said Chris Mathers, a former RCMP officer who specialized in undercover money laundering investigations.
For context, 64 per cent of all criminal cases in Canada during the same period resulted in a guilty finding, according to Statistics Canada.
The statistics — which were prepared for the Star by data analysts at Statistics Canada — reflect Mathers’ experience in court, where money laundering charges were often dropped in exchange for a guilty plea on other, mostly drug-related charges, he said.
“There are men and women in law enforcement who are very dedicated in trying to catch these guys and put them in jail. But the Crown (attorneys) just end up using (the money laundering charge) as a bargaining chip and withdrawing it,” he said.
Christine Duhaime, a Vancouver lawyer who specializes in anti-money-laundering law, said these numbers paint a very attractive picture for organized criminals looking for a place to spend their ill-gotten profits.
“I think that all leads to this concept that in British Columbia, there’s no one watching the money laundering,” she said. “Clearly, criminals look for that.”
In response to questions about the high rate of stayed and withdrawn charges, the Public Prosecution Service of Canada (PPSC), which prosecutes the majority of money laundering cases, sent the Star an emailed statement.
“In Canada, the vast majority of cases never go to trial; rather they are resolved by way of a guilty plea, in most instances to a number of the charges laid, but not the totality,” the statement read. “One has to consider the global outcome of the file, not only that of one single charge, to get an accurate picture of the outcome of the resolution discussions.”
An avalanche of alarming headlines this year have drawn attention to Canada’s poor record for combating financial crime.
In April, it was revealed that there isn’t a single RCMP officer in B.C. devoted to money laundering investigations. In May, a major report commissioned by the B.C. government described how criminals were laundering more than $5 billion per year through Vancouver real estate. Additional studies estimated that authorities were missing 99.9 per cent of money laundering in the country and that more than $20 billion in anonymous money has been used to buy real estate in Toronto in the last decade.
Last November, in an illustration of Canada’s poor prosecution record, the biggest money laundering case in B.C. history fell apart and the Crown stayed all charges.
According to Statistics Canada, there were 2,026 money laundering charges laid across Canada during the five years from 2012-13 to 2016-17. Of those, 1,747 — or 86 per cent — were either withdrawn or stayed, while only 190 — or nine per cent — led to a conviction or guilty plea.
“Keep in mind that only in cases where there is a high probability of a conviction is a charge even laid,” said Mathers. “That’s a lot of good cases getting thrown out.”
A second data set, which the Star obtained from the PPSC through an access to information request, shows only the charges that were pursued by federal prosecutors, which generally involve tax and drug offences. The track record for securing convictions there isn’t much better.
Get more stories like this one in your inbox
Take your time with the Star’s biggest and best features with our Weekend Long Reads email newsletter.
According to the database, 63 per cent of federal money laundering charges during the same five-year period were either withdrawn or stayed, while 28 per cent led to a guilty finding.
Delving into the PPSC data reveals large regional disparities. In Ontario and the National Capital Region, where nearly half of all federal cases were tried nationwide, 71 per cent of money laundering charges were dropped and only 22 per cent of charges led to a conviction.
Atlantic Canada had the best conviction rate, at 41 per cent, while Manitoba didn’t secure a single conviction or guilty plea.
One piece of data that jumps out from the statistics is the small number of charges laid in B.C. There were only 25 federal money laundering charges laid in that province in the same five-year period.
“That’s crazy,” Duhaime said. “That’s part of what leads to the whole concept that British Columbia, and particularly Vancouver, is not a place where anti-money-laundering law is taken all that seriously. It can’t be with so few charges.”
While the federal government pledged in its last budget to fund a dedicated money laundering task force, the calls for doing more to stem the wave of dirty money have multiplied, coming from places as diverse as the B.C. government and the Ontario Real Estate Association.
If the new funding is going to have an effect, it will be “way down the line,” Duhaime said.
“The money announced federally last year was really just going to Ottawa to hire more oversight for B.C. It’s not like there are going to be more boots on the ground,” she said. “You can’t remotely assault financial crime cases.”
Mathers, who now works as an anti-money-laundering consultant in both Canada and the U.S., says there’s a structural problem with how Canadian courts work that minimizes the impact of sentencing. Even though money laundering carries a maximum penalty of 10 years in prison, Mathers said, judges will often order the sentence to be served concurrently with other sentences, so the criminal will not see any additional time behind bars.
“If you’re a prosecutor in a drug case, you’ve arrested a bunch of guys and seized a bunch of drugs and money. The defence (lawyer) will say: ‘My guy won’t fight the seizure. Drop the money laundering charge and he’ll plead guilty to everything else,’” said Mathers. “The Crown thinks: money laundering is complex, the jury won’t understand. We’ve got the property, we’ve got the dope. This is a good deal.”
But it’s a deal that provides very little deterrence for money launderers. Duhaime says, until there is more emphasis on complex money laundering cases across the board, nothing will change.
It might be complicated, but unless prosecutors learn from some misses and some losses, the situation won’t improve, she said. “If we cave and say, ‘these are really complicated, let’s not prosecute,’ that doesn’t help. I just think we need to acquire the expertise, train for it, do it the hard way and become better at it.
“And eventually, in five years from now, we’ll be kicking ass and getting convictions. But we have to start now.”