Turning a blind eye to money laundering now costs you in Canada

By Christine Duhaime | May 8th, 2017

In a surprise decision for Canada, an appellate court has reversed a lenient sentence for Jacqueline Garnett, the girlfriend of a drug dealer who was convicted of possession of proceeds of crime, and instead imposed a two-year conditional sentence, partially to be served under house arrest. While the new sentence is still light by global standards, the lower court had given the accused three years probation.

In August 2016, Ms. Garnett, was sentenced in Nova Scotia for laundering money. She banked millions of dollars for her boyfriend’s drug business, and lived off the avails of the proceeds of crime without reporting the proceeds as income or paying taxes. In her capacity as the person who banked her boyfriend’s money, Ms. Garnett washed the proceeds of crime at Canadian financial institutions.

While noting that it is illegal to receive the benefit of proceeds of crime, the lower court sentenced her to probation because the judge believed she was not likely to re-offend.

The Crown appealed the light sentence and on appeal, the appellate court held that the lower court’s decision was not appropriate, in part because it suggested that partners have a license to launder proceeds of crime.

In the case of Ms. Garnett, the court held that she knew her boyfriend was involved in illegality and was also aware that associates of theirs had been murdered for that activity. Consequently, her sentence was increased to house arrest and two year condition sentence. In increasing the sentence, the court of appeal held that a message must be sent to business and relationship partners that if you’re going to be involved in holding, moving or laundering the proceeds of crime, you can expect serious consequences.

By way of comparison, in other countries, money laundering sentencing is taken more seriously by the judiciary. Money laundering constitutes a serious national and international problem, and other countries endorse a sentencing structure that imposes substantial penalties for financial transactions which promote drug trafficking or other serious criminal activity or which obscure the origins of illicit funds.

In the US, for example a drug trafficker who is a first-time offender may be incarcerated for a 121- to 151-month period if charged and sentenced only for drug trafficking. His girlfriend would be incarcerated  for 46 to 57 months if charged and sentenced only for laundering the money from such drug trafficking.

Comments are closed.