QUICK TAKEAWAY
Money Laundering: Section 385 of the Criminal Code states you can be charged with money laundering if you are involved in any way with disguising the origins of funds made through criminal activity or if you are part of the process to incorporate those funds into the regular financial system. This crime is most frequently carried out by members of criminal organizations or those committed white-collar crime, though the extent of it in Canada is difficult to track. The maximum sentence upon conviction is 10 years in prison.
Table of Contents:
Money Laundering in Canada
Money laundering is the process used commonly by criminal organizations (Organized crimeA organization whose members work together on criminal activities) or white-collar criminals (White-collar crimeA crime where the primary motive is financial in nature) to disguise the origin of money so that it appears legitimate. This can involve setting up a cash-based business, such as a restaurant, then mixing the legitimate money with the criminal proceeds so that tax authorities or police are unable to track the source of the funds. Another method is to buy a big-ticket item like a car, boat or home for cash. That asset can then be sold and converted into "clean" cash.
Section 462.31 of the Criminal Code makes it an offence for you to be involved in any way with the laundering of the proceeds of crime, such as using, transferring or transporting funds raised through criminal activity. This section of the Code was amended in 2019 to make it a crime to be "reckless as to whether, all or a part of that property or of those proceeds was obtained or derived" from criminal activity. That means if you should have known or suspected the funds were not legitimate but you played some role in a transaction, you could be charged with money laundering.
What Steps Authorities are Taking
Since money laundering is hidden, it is difficult to determine how widespread of an issue it is in Canada. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act makes it mandatory for individuals and financial institutions to report a variety of transactions to a central office. The reporting is designed to assist in the detection and prosecution of money. In 2019, the (Government of Canada invests $98.9M over five years to modernize the RCMP and strengthen its foundations to help fight money laundering and identify proceeds of crime) in Integrated Money Laundering Investigative Teams in British Columbia, Alberta, Ontario, and Quebec, to battle this issue.
What is Needed to Convict
To win a conviction the Crown has to prove beyond a reasonable doubtThe standard that must be exceeded to find someone guilty that you assisted in the process to launder money obtained through criminal activity. They have to show that you knew, or should have known, your actions were illegal. It is not necessary that you knew the exact origin of the funds, as wilful blindness is not a defence.
Since many money laundering schemes are international in scope, the Crown also has to prove the crime lies within the jurisdiction of the Canadian legal system. In 1985, the Supreme Court (Libman v. The Queen) ruled cases can be prosecuted here if “a significant portion of the activities constituting that offence took place in Canada.”
Money Laundering a Hybrid Offence
Canadian courts deal with offences in three ways. Summary convictionUsed for lesser offencess are for less serious crimes such as thefts under $5,000. Indictable offenceIndictable offences are more-serious criminal offencess deal with such charges as murder, sexual assault and aggravated assault. In between are what are called hybrid offenceAn offence prosecuted either as a summary conviction or as an indictable offences, which includes money laundering, which the Crown can deal as either a summary or indictable offence.
The Penalty for Money Laundering in Canada
If the charge is treated as an indictable offence, the maximum sentence is 10 years in prison, with lesser sentences given for summary convictions. An exemption is given to peace officers who commit this act “for the purposes of an investigation.”
Defences if Charged with Money Laundering
According to a 2019 news report from The Hamilton Spectator (In Canada, nearly all accused money launderers get their charges dropped), “white-collar criminals have little to fear from the Canadian judicial system” as 86 percent of charges for laundering the proceeds of crime laid between 2012 and 2017 were withdrawn or stayed, according to data received from Statistics Canada.
One defence is to tell the court you were unaware that the funds were derived from criminal activity and that someone duped you into taking part. Since investigators rely on financial records for evidence, a court challenge about their accuracy can be raised. Another defence would be that your rights under the Canadian Charter of Rights and Freedoms were breached during the police investigation. If the police conducted an unlawful search and seizure to obtain evidence, your lawyer can ask the court to exclude that evidence. In all cases, a successful defence is built on the facts of the case.
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Titan Defence LLP
Warren W. Tobias
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Yaskiel Francesca
Glossary of Legal Terms
Hybrid offence
Hybrid offences fall between a summary and an indictable offence. The Crown prosecutor chooses whether to treat the offence as a summary or indictable offence.
Indictable offence
Indictable offences are the most serious offences under the Criminal Code and they come with more serious punishments, up to a maximum penalty of life in prison.
Organized crime
The Criminal Code defines organized crime as a group of three or more people whose purpose is the commission of one or more serious offences that would “likely result in the direct or indirect receipt of a material benefit, including a financial benefit, by the group.” That is often through crimes such as gambling, prostitution or drug trafficking.
Reasonable doubt
The Supreme Court of Canada has said that reasonable doubt “falls much closer to absolute certainty than to proof on a balance of probabilities” and “that something less than absolute certainty is required, and that something more than probable guilt is required."
Summary conviction
Summary convictions are used for lesser offences with penalties, fines and short jail time. They reflect the majority of offences as defined in the Code.
White-collar crime
A non-violent crime where the primary motive is typically financial in nature, usually carried out by those in business or management positions
