Despite multiple recent reports that identified Toronto’s vulnerability to money laundering, the RCMP has decided to disband its Ontario financial crimes unit, the Star has learned.
Announced internally on December 10 in a series of meetings held in detachments across the province, the decision will see 129 officers and eight civilian staff re-assigned to other units, including organized crime, anti-terrorism and drugs, according to an internal email obtained by the Star.
Breaking up a stand-alone unit devoted to investigating complex and difficult cases has financial crime experts worrying that fraud and money laundering activity will increase.
“It just won’t work,” said Garry Clement, former director of the RCMP proceeds of crime unit. “The RCMP, in my view, has sort of lost sight of the fact that taking on financial crime requires a very high degree of expertise.”
After a review of federal policing priorities in April 2019, the RCMP is now focusing all its resources on three areas: National security, transnational serious and organized crime and cyber crime, the email stated.
As a result, “financial crime was no longer a stand alone priority, and … all current Financial Crime Positions are being eliminated,” states the email, which was sent to RCMP officers across the province the day after the town hall meetings in December.
The RCMP told the Star the move will allow the force to better focus on urgent threats while not denting its ability to tackle financial crime.
The financial crimes officers’ integration into other units will “attain the most effective use of our existing resources,” according to the email. “This integrated approach is anticipated to increase our ability for effective operations.”
“The focus will be on the overall criminality of the file which may or may not have a financial crime component. (Financial Crime) employees can expect to be cross-trained.”
Asked to comment on the email, Assistant Commissioner Jodie Boudreau, the commanding officer of the RCMP in Ontario, said: “Tackling financial crime continues to be aligned with our federal mandate as it is now embedded in overarching criminality … There is no anticipated gap expected in the fight against financial crime or impact to Canada’s economic integrity … This integration will allow us to focus on the highest threats.”
“It amazes me that they tried this approach of dissolving the (financial crime) units and putting them together with other units and we know the results,” he said.
Last year, former deputy commissioner of the RCMP, Peter German, released two reports on the staggering scale of money laundering in B.C. and revealed that there wasn’t a single federal police officer in the province devoted to money laundering. This prompted Prime Minister Justin Trudeau to announce a dedicated money laundering task force in the federal budget. B.C. is currently planning a public inquiry into money laundering.
Meanwhile, the belated crackdown in B.C. may have criminals turning their attention to Toronto, where a hot real estate market and weak oversight provide ideal conditions for financial crime, according to a report released last year. A second report highlighted how, over the last decade, at least $20 billion in anonymous cash has been used to buy GTA property. These reports underlined the potential for widespread money laundering in the GTA, virtually unhindered by law enforcement.
There’s been growing public awareness of the problem since the Panama Papers investigation in 2016, when the Star revealed how criminals and tax evaders from around the world are using Canada to “snow wash” their money.
In an interview with the Star, German said the RCMP shouldn’t be moving away from financial crime enforcement when fraud and money laundering are on the rise.
“Eliminating economic crime as a national priority for the RCMP is a mistake. It was recognized years ago that protection of our economy is a critical issue for the national police. Furthermore, following the money trail is accepted around the world as likely the most effective way to attack organized crime where it hurts most,” German said.
Even when charges are laid, convictions have proven elusive. Last month, the Star obtained statistics showing that between 2012 and 2017, 86 per cent of all money laundering charges were withdrawn or stayed.
Henry Tso, who headed the RCMP’s Financial Crimes Unit in Toronto until 2012, said that the RCMP has been moving away from dedicated investigation teams for financial crime in Ontario, and individuals and companies that have been defrauded are turning to private investigative firms to go through the civil process for financial recovery.
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“All those big cases are not going to be investigated … The police, their priorities have changed,” said Tso, who now works for the consulting firm MNP and routinely investigates the same kinds of frauds he probed as a police officer.
“Fraud victims come to us since many get turned away from police services due to (a lack of) capacity in financial crime units … When we are engaged, we do the investigation and forensic accounting to provide expert reports for civil remedies. If the client wants criminal charges, our reports can be provided to the police to pursue those charges.” he said.
Back in the 1980s and 90s, the RCMP pioneered a different kind of integrated unit, Clement said. Instead of putting a lone financial crime investigator on teams devoted to drugs or gangs, teams devoted to financial crime were integrated with prosecutors, tax auditors and customs officials to follow complex money trails wherever they led.
“They were highly successful,” Clement said, and they have since been adopted in the UK and U.S. But the integrated financial crimes units were disbanded in mid-00s.
“The RCMP is failing miserably on the enforcement front, you would think that they would go back to a tried and proven model,” Clement said.
Last fall, the Ontario government announced it was creating a Serious Fraud Office that would bring together Ontario Provincial Police investigators and prosecutors to tackle complex cases.
“The RCMP’s move is the very opposite of the Ontario initiative to create a specialist (unit),” said German.