Canada needs to improve its anti-money laundering efforts according to U.S.

By Christine Duhaime | May 22nd, 2010

Canada needs to improve its anti-money laundering efforts in several areas, according to the 2010 Money Laundering Report published by the U.S. Department of State. Canada was among 61 countries identified as major money laundering countries in 2009. Others include Afghanistan, Austria, Brazil, Cayman Islands, China, Greece, India, Iran, Italy, Lebanon, Lichtenstein, Mexico, Pakistan, Turkey, Switzerland, United Arab Emirates, United Kingdom, United States and Zimbabwe.

The Report identified six areas in which Canada should focus to improve its anti-money laundering compliance. The most significant area of concern is organized crime. The Canadian Security Intelligence Service estimates that there are about 750 organized crime groups operating in Canada and 80% of them are involved in the illicit drug trade.

Other areas of concern include:

  1. improved oversight and regulation of anti-money laundering measures in the gambling industry;
  2. better communication between FINTRAC and law enforcement authorities;
  3. better monitoring of money services businesses;
  4. improved cross border reporting with U.S. authorities; and
  5. ensuring privacy laws do not stand in the way of providing information to foreign and domestic law enforcement agencies.

Th 2010 Money Laundering Report also cites currency transactions to Somalia from Canada, the U.S. and Europe that are routed through Nairobi as an area of concern for money laundering and terrorist financing.

The 2010 Money Laundering Report is available here.

Sri Lankan sentenced for terrorist financing in Canada

By Christine Duhaime | May 14th, 2010

A former refugee from Sri Lanka, Prapaharan Thambithurai, pleaded guilty to terrorist financing in British Columbia Supreme Court and received a lenient six-month sentence today. He is the first person in Canada charged with terrorist financing under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Thambithurai admitted raising funds for the Liberation Tigers of Tamil Eelam (LTTE) through a non-profit group.

The LTTE was founded in 1976 and uses illegal methods to raise money, acquire weapons and technology, and publicize its cause of establishing an independent Tamil state in northern Sri Lanka. The LTTE began its armed conflict against the Sri Lankan government in 1983, and uses a guerrilla strategy that often includes acts of terrorism. The LTTE has an army of several thousand combatants and until recently, controlled most of the northern and eastern coastal areas of Sri Lanka.

Over the past 17 years, the LTTE has conducted approximately 200 suicide bombings, resulting in the deaths of hundreds of people, and carried out numerous political assassinations. The LTTE was designated by Canada as a terrorist organization and therefore may not legally raise money or procure equipment or materials in Canada.

Thambithurai will serve his sentence in Ontario. He will likely be immediately stripped of his refugee status in Canada and deported to Sri Lanka after serving his sentence.

Brooklyn lawyer sentenced to 15 years for money laundering

By Christine Duhaime | May 5th, 2010

Steven Rondos, a Brooklyn lawyer who admitted stealing US$4 million from the trust accounts of 23 disabled or incapacitated clients, was sentenced to 15 years in prison today in New York. Rondos was the court-appointed legal guardian in charge of supervising the guardianship accounts of clients who were incapacitated. He used some of the funds to buy and furnish a US$1.4 million luxurious home in Ridgewood, New Jersey, and buying a US$31,000 plasma TV for his home. Rondos was born in Canada and practiced law in New Jersey.

Noriega extradited to France to face money laundering charges

By Christine Duhaime | April 27th, 2010

Former Panamanian President Manuel Noriega was extradited to France from the U.S. on an extradition warrant to face charges that he laundered US$3.15 million in drug profits through transactions that included buying luxurious apartments in Paris. Noriega was in jail serving a sentence for multiple charges, including drug trafficking in the U.S. from 1990 to 2007. Since 2007, he has been held in custody pending extradition applications from France and Panama. He is the first head of a foreign country to be convicted of crimes in the U.S. courts, and he became the U.S.’ only official prisoner of war.

Australian charged with laundering US$500 million for Internet gambling

By Christine Duhaime | April 16th, 2010

The U.S. Attorney’s Office announced today that an Australian foreign national, Daniel Tzvetkoff, was arrested in Las Vegas on charges that he assisted illegal Internet gambling companies process about US$500 million in transactions for American gamblers. An indictment against Tzvetkoff was unsealed in Manhattan federal court today. It alleges that Tzvetkoff operated a payment processing company called Intabill Inc. and convinced banks to provide services to Intabill Inc. through the Automated Clearing House System to Internet gambling companies operating offshore disguising the identity of the recipients so banks would not know they were dealing with Internet gambling companies. Tzvetkoff is charged with gambling conspiracy, bank fraud conspiracy, money laundering conspiracy and one count of money laundering. If convicted, he faces a term of imprisonment of up to 75 years.

India’s billionaire Lalit Modi is subject of government inquiry

By Christine Duhaime | April 16th, 2010

According to a news report in the Economic Times of India, Indian billionaire Lalit Modi, the commissioner of the Indian Premier League, is the subject of a government report prepared by the Income Tax Department of India that alleges he may be connected to money laundering and the fixing of cricket games. The report apparently alleges that until four years ago, Mr. Modi had a trail of failed ventures and now has a luxurious lifestyle that includes expensive cars, several homes, and a private jet and yacht. No charges have been laid against Mr. Modi, however, India’s News X has reported that several of Mr. Modi’s offices and residences were the subject of a search by the Income Tax Department.

Canadian businessman being investigated in money laundering probe

By Christine Duhaime | April 14th, 2010

Baie Comeau smelterAccording to a report in the Wall Street Journal, prosecutors in the U.S. and UK are investigating the role of prominent Canadian businessman, Victor Dahdaleh as part of a bribery and money laundering investigation of Alcoa Inc. under the Foreign Corrupt Practices Act. Mr. Dahdaleh’s London premises were raided and documents seized as part of the investigation. Mr. Dahdaleh is said to be a longtime agent of Alcoa who negotiated contracts for the corporation in the Middle East. The Foreign Corrupt Practices Act prohibits U.S. corporations, or corporations with U.S. subsidiaries, or their associates, directors, officers, employees or agents from bribing foreign government officials to obtain or retain business.

Canadian convicted of attempting to leave Canada without declaring funds

By Christine Duhaime | April 10th, 2010

Oksana Yang, a Vancouver resident, was convicted this week of attempting to leave Canada with more than $10,000 cash and not reporting it. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act requires that every person report when they import to Canada or export from Canada cash (or other monetary instrument) equal to or greater than $10,000. It is not illegal to import or export cash but it must be reported in advance. A failure to report is an offence and may result in the cash being seized and forfeited to the government.

Minnesota man sentenced to 50 years for money laundering

By Christine Duhaime | April 8th, 2010

Thomas Petters, a Missouri businessman, was sentenced to 50 years in jail today for carrying out a Ponzi scheme that netted about US$3.7 billion over a 16-year period. In December 2009, Petters was convicted of several charges including conspiracy to commit money laundering, and money laundering. Petters’ company, Petters Worldwide Group, once owned Polaroid. “This was a massive fraud,” said U.S. District Judge Richard Kyle. “Tom Petters was at the front and centre of every stage. [He] was captain of the ship. [The fraud] would not have happened without his direction.” Petters’ lawyer sought a prison term of four year; the prosecution was seeking 335 years. More from Fox News here.

Al-Qaeda terrorist funds may be drying up

By Christine Duhaime | April 7th, 2010

According to a report by Foreign Policy, Al-Qaeda has been financially weakened by international efforts to combat terrorist financing but the Taliban still has plenty of money. The news stems from a talk given by David Cohen, the assistant treasury secretary for terrorist financing, at the Washington Institute for Near East Policy. Al-Qaeda groups have started engaging in extortion, drug trafficking and kidnapping to secure funding for their activities. You can read Mr. Cohen’s remarks at the Institute’s site here.