Criminal money laundering is so pervasive and gangsters so adept at corrupting and deceiving bankers, lawyers, realtors and insurance agents that policing it seems doomed to failure, according to a detailed probe conducted for the RCMP and obtained by the National Post.

[. . . .] "The police win a few battles, but they're losing the war," said Dr. Stephen Schneider, author of the report for the RCMP, when contacted by the Post.

"It is an inherently uneven playing field in favour of the bad guys."

Dr. Schneider, a criminologist with both St. Mary's University in Halifax and the Nathanson Centre for the Study of Organized Crime and Corruption at York University, was given unprecedented access to RCMP files.

. . . crime scenes to offshore banks . . . drug dealers to the retailers of luxury goods. . . a deposit institution . . . Canadian chartered banks . . . insurance industry . . . motor vehicles . . . real estate

[. . . . An] Ontario cocaine trafficker deposited more than $2-million into chartered banks between 1994 and 1997. Police found he had signing authority for 32 different bank accounts, including 11 foreign accounts; all of them were active with cash deposits, withdrawals and wire transfers.

[. . . .] Gangsters could not be successful in laundering money if it were not for the help of professionals, from bankers, security brokers and lawyers to accountants, travel agents and car dealers, the report shows.

[. . . .] "In a smaller number of cases the transaction was clearly suspicious, such as the use of large amounts of cash to purchase big ticket items; using multiple bank drafts from different banks to personally finance the purchase of a home; requests that lawyers purchase assets on behalf of a client through cheques issued from legal trust accounts; and the incorporation of numerous companies that carried out no legitimate businesses yet have significant amounts of cash deposited into corresponding bank accounts," the report says.

[. . . .] . . . an informant infiltrating the drug empire of the Hells Angels caught a conversation on tape of a biker recommending a dirty accountant. . .

"He worked 25 years for the government. [. . . .]

. . . corrupted professionals . . . increasing pressure from new laws and the efforts of dedicated police . . .

"One should... anticipate an increase in efforts by criminal organizations to corrupt industry professionals in order to by-pass or manipulate the transaction reporting requirements," the report says.

[. . . .] Dr. Schneider, a former researcher for the Solicitor General of Canada, culled through almost all cases successfully closed by RCMP between 1993 and 1998 that included a proceeds of crime seizure or money laundering charge involving more than $10,000. The cases also had to involve more than 40 hours of investigative time. [. . . .]
1993-98:

Where the cases come from: [. . . . Read the details by Province]

Source: Money Laundering in Canada: An Analysis of RCMP Cases, 2004

CRIMINAL TECHNIQUES:

[. . . . ] SMURFS: 1 Find a number of trustworthy people -- called "smurfs" -- to help you sneak money into the banks without raising suspicions. Give each smurf a big chunk of change. [. . . .]

CASINOS: [. . . .]

CO-MINGLE: 1 Establish a cash-intensive legitimate business or corrupt the owner of an already established enterprise. Restaurants are good picks. [. . . . ]

A person who is nice to you, but rude to the waiter is not a nice person. (This is very important. Pay attention. It never fails.)

Your friends love you anyway.

Never be afraid to try something new. Remember that a lone amateur built the Ark. A large group of professionals built the Titanic.

Men are like a fine wine. They start out as grapes, and it's up to women to stomp them until they turn into something acceptable to have dinner with.

Sentencing rules in the federal government's new young offender law are so complex, officials have increasingly resorted to using actuarial "wheels" to figure out jail terms and have freed some youth either too early or too late.

[. . . .] Confusion among those who have to implement judges' sentences has reigned throughout the country, say the officials' union leaders.

"I've heard stories of people who thought someone was getting six months more custody, but when we did all the figuring out with the wheel, it came out to nine days," said Bob Eaton, union representative for many Ontario probation officers.

"If the judiciary says someone should be in custody for three months, they should be in there for three months. [. . . .]

The problems crop up after judges mete out punishment under the Youth Criminal Justice Act, implemented a year ago today, and officials try to work out how much of the sentence is supposed to be spent behind bars and how much in the community.

"The legislation introduced methods of calculating sentences that are entirely different from the [old] Young Offenders Act sentences and adult sentences," said Anne Machowski-Smith of the Ontario Children's Services Ministry.

[. . . .] The difficulty in calculating sentences has helped fuel another emerging problem: apparently dramatic disparities between punishments handed out by different judges for similar offences under the new act, Mr. Luff said.

[. . . .] The new act was implemented quietly last April 1 to replace the Young Offenders Act. It is designed to steer youthful criminals away from the formal justice system and jail, based on a belief that incarceration does little to deter most young offenders. At every stage, from arrest to trial, officials must consider diverting the youth from custody and into community service, counselling or some other alternative. [emphasis mine]

[. . . .] One-third of all jail terms must be served in the community, while some sentences add a probation period at the end -- as well as the one-third served in the community, she said. Further intricacies come when more than one sentence is combined.

TORONTO and WASHINGTON - Police across Canada and the U.S. arrested nearly 170 people yesterday in connection with a sophisticated drug ring that used Ontario as a base for one of the biggest Ecstasy rings in the United States.

Authorities say the massive organized crime network, allegedly operated by a [Scarborough] Toronto man and an Ottawa woman, was behind nearly 15% of all the Ecstasy -- a popular nightclub drug -- found in the United States.

The alleged kingpin, Ze Wai Wong, 46, was picked up early yesterday while he slept at his Scarborough condominium. The Chinese national is well-known to police; he was arrested in 1994 and later ordered deported, but it appears he never left. "He was the mastermind," said Chief Superintendent Ben Soave of the Combined Forces Special Enforcement Unit, a task force of investigators from Toronto police, the Ontario Provincial Police and the RCMP.

[. . . .] Thi Phuong Mai Le, a 38-year-old Vietnamese woman known in her Ottawa neighbourhood as "The Queen," was the network's "chief financial operator," Chief Supt. Soave said. She was in charge of laundering millions of dollars in drug profits, he said, some of which ended up in Vietnam.

[. . . .] When it was viable, police say the operation, believed to be linked to Chinese Big Circle Boys and Vietnamese criminal gangs, was a highly mobile smuggling and trafficking enterprise with tentacles in U.S. cities as wide ranging as Los Angeles, New York, Baton Rouge and Des Moines, Iowa.

[. . . The] network distributed at least one million Ecstasy pills every month in the U.S., while at the same time moving millions of dollars through other legitimate and illegitimate enterprises.

[. . . .] The wide-ranging investigation . . . began in May, 2001, when U.S. authorities informed their Canadian counterparts that large portions of "E" were entering the country from Ontario.

The investigation later grew into three separate probes -- Operation Okapi, Operation Codi and Operation Candybox -- that came to a head last summer, when police raided three suspected Ecstasy labs in the Toronto area.

Officers seized 377,000 pink, green and purple pills, 120 kgs of Ecstasy powder worth more than $33-million and other equipment, such as presses, scales, dyes and vacuum packers.
Police say the laboratories were capable of producing more than 250,000 pills -- with a street value of $25 each -- every day.

"Although the term 'lab' conjures up images of a clean, sterile environment, these labs were anything but clean and sterile," Chief Supt. Soave said. "And the ingredients going into these pills are suspect at best."

[. . . .] U.S. indictments unsealed yesterday also reveal how the cartel used prepaid cellular phones -- which do not require proof of identification to purchase -- to co-ordinate drug transactions. Members spoke in coded language when arranging smuggling and distribution throughout the U.S., the indictments say, and they often fretted about unpaid debts.

[. . . .] "It was a very small operation, but a legitimate sewing and clothes manufacturing plant," said RCMP Staff Sgt. Jacques Lemieux, the project manager for Project Codi. "But it gave the group a legitimacy as to why they had the houses and why they drive the cars they did."

[. . . .] Chief Supt. Soave also warned that despite the magnitude of yesterday's arrests, "E" is still widely available.

Wednesday, March 31, 2004 -- It is the club drug of choice. And tonight its been revealed Canada is at the center of it. Like most other drugs, ecstasy is produced in labs. For about twenty bucks a hit it helps you party till the sun comes up and then some. More psychologically addictive than anything else, long-term abuse of E is nevertheless dangerous to the brain.

Tuesday, March 30, 2004 -- Global National and the Ottawa Citizen can exclusively report tonight that terror raids in Britain, which police say headed off a massive attack are likely linked to similar raids in Ottawa.

Compared with countries that have suffered air terrorism and are serious about combatting it, Canada's security standards are amateurish beyond belief.

Yet the risk is real. Last November, in a tape attributed to Osama bin Laden, Canada was singled out along with Britain, France, Italy, Germany and Australia as a U.S. ally slated for attack. The recent carnage in Madrid showed that al-Qaeda's reach and thirst for innocent blood are undiminished. Canada could be hit. Moreover, the combination of a relatively permissive refugee policy and a relaxed security posture are bound to make us a target for those seeking to do further harm to the United States itself. To assume otherwise would be grossly naive.

[. . . . The] Senate Committee on National Security and Defence, and anyone who's listened to them in the past two years. . . has repeatedly tried to raise alarm in Ottawa over glaring gaps in our air and border security. Among the loopholes it's identified: a disturbing level of organized crime connections in our airports and a shocking lack of communication between border authorities and intelligence agencies on such things as terrorist "watch lists."

[. . . .] And now, yesterday, the Senate committee was back again with another stark warning: Canada is still utterly unprepared for a terrorist attack or any other major emergency.

There is still no national strategy for dealing with a national crisis, whether it's the result of "an act or God - or the Devil" (i.e., terrorists), notes the committee.

And, as committee chair Sen. Colin Kenny put it to me in an interview yesterday, a terrorist strike here is inevitable.

"Our time is coming," Kenny said, noting Canada is one of the only countries on al-Qaida's attack lists that has yet to be hit. "The next attack is a certainty. And the people who are going to have to clean up after it are very frustrated."

Those people are firefighters, cops, doctors, nurses, soldiers - a selection of whom Kenny's committee consulted across th e country, along with public health workers and officials designated full time to prepare for disasters.

Their unanimous conclusion: We're not ready.

Why don't we all just paint targets on our foreheads? Make it easy for the terrorists.

Yesterday brought word of another report al-Qaida plans terrorist attacks on Canadians.

Meanwhile, in a scathing, two-year study, the Senate Committee on National Security and Defence concluded Canada is unprepared to deal with the aftermath of a terrorist attack.

This a day after Auditor General Sheila Fraser's found the federal Liberal government is doing a lousy job of securing our borders, despite spending billions on security post 9/11.

Sen. Colin Kenny, a Liberal who chairs the Senate committee, said we should all be "mad as hell" that the feds are basically "muddling through" the issue and aren't ready to handle a terrorist attack or natural disaster.

OTTAWA (CP) - A Liberal plan to release previously secret testimony about the federal sponsorship scandal was derailed Wednesday when MP Dennis Mills jumped the gun and started talking too soon. [. . . .]

Guite, through his lawyer, has agreed to waive the confidentiality he demanded in 2002 and make public the testimony he gave at that time.

But before the committee could vote on releasing the transcripts, Mills told reporters outside a Liberal caucus meeting that Guite had exonerated former public works minister Alfonso Gagliano of political meddling in the program.

"Someone asked him what about influence from Mr. Gagliano," said Mills.

"And he said 'Mr. Gagliano never gave me any specific direction on any advertising files . . . . I've been in this business for 37 years and I know my business.' "

That was at odds with reports in the summer of 2002, when opposition MPs who heard Guite testify told a very different story.

[. . . . ] "We decimated a major marijuana and ecstasy cartel," he said, calling the popular dance-club drug "death pills masquerading as harmless fun."

The network also reached into Vietnam and other parts of Southeast Asia, police said. But the heart of the criminal operation was in Ottawa.

The alleged ring leader, Mai Le, 38, [and several siblings were] arrested [. . . .]

Le and several siblings are charged with possession of pot for the purpose of trafficking, money laundering, theft of hydro and other related offences.

[. . . . ] Officers raided 32 locations in the capital - some apparent residences, some businesses. They included eight marijuana grow operations.

[. . . . ] "It's Asian organized crime," said Det. Josh Pulfer of the Ottawa Police drug unit.

Police said tips suggest there are at least 500 more residential grow labs in Ottawa alone.

[. . . . ] Sometimes a car would stop outside and the driver would leave a bag of garbage to make it look as if someone lived there.

An Asian man regularly checked on both houses, and there was always someone to clear snow or cut the grass, Foster said. A fake bouquet of sunflowers adorned an upstairs window.

Citizen involvement is key to busting such rings, said Pratapas of the U.S. Drug Enforcement Administration.

"They're affecting your communities, your schools, your parks."

When a bureaucrat wants to bury an issue, he refers it to a "special committee." And when heads of government wish to do the same, they call for a "special summit."

This is what the European Union leaders have just done with regard to their role in the global War on Terror. [. . . .]

The G-7 have discussed terrorism at eight of their summits since 1976. The Halifax, Canada, summit in 1995 approved what was presented as an in-depth analysis of the threat that international terrorism posed to global stability. [. . . . ]

Why have the major powers been reluctant to treat the War on Terror as a genuine war? There are at least three reasons.

1. Many Western leaders can't free themselves from the philosophy of "One man's terrorist is another's freedom fighter."

This leads to a division of terrorist movements into good ones and bad ones. For example, successive British governments had no difficulty seeing the Irish Republican Army (IRA) as evil. But when it came to terrorist groups using British territory for planning and organizing attacks on other countries, the "freedom fighter" shibboleth quickly came to the fore. Until 9/11, visitors to London's Regent Park could see groups of bearded militants collecting money for terrorism in half a dozen Muslim countries while the British police watched with a straight face.

[. . . .] using the phrase "resistance movement." . . . banned the very term "terrorist" . . . replacing it by euphemisms such as "militant," "radical" and (borrowing a term from Noam Chomsky) "people-based."

Few people noticed that Jose Luis Zapatero, leader of Spain's Socialist Workers' Party, used the term "Arab resistance" throughout the March election campaign in order to avoid the term al Qaeda, which had been favored by his rival, Prime Minister Jose Maria Aznar.

2. Many nations are tempted to obtain an opt-out from the terrorist threat.

[. . . .] The "opt out" trick played a key role in persuading millions of Spanish voters to switch from the governing People's Party to the opposition Socialist Workers' Party. Many Spaniards deluded themselves into believing that by withdrawing their troops from Iraq, they would secure an insurance against future terror attacks.

3. Many of the Western elite believe that terrorists can be weaned away from their evil ways through negotiations.

[. . . . ] What these would-be deal-makers don't realize is that terrorists of the Taliban and al Qaeda type don't believe in compromise and give-and-take.

[. . . .] For the global War on Terror to succeed, it is imperative that all those fighting it convince themselves that there is no good terrorism, and that the real or imagined nobility of a cause cannot justify the murder of innocent people.

[. . . .] The major democracies must shed their illusions about ways of wiggling out of the War on Terror before they can mobilize the rest of the international community to face what is a serious threat to us all. The best insurance against terrorism is firm resolve.

[. . . .]The holes in border watch lists are especially troubling. If border agents don't have up-to-date information about who to watch for, it is hard to see how they are supposed to prevent terrorists from entering the country. Yet from June to mid-October last year, to take just one example, no updates were made to immigration records. When the updates were finally entered, 8,000 suspected terrorists were added to the watch list. What if some of those suspects tried to enter the country during those months?

The Auditor-General found that the Immigration Department often does not even add suspects flagged on Interpol's public website to its watch list. After checking, she found that 27 per cent of Interpol's "recent" notices were not on the list. [. . . .]

Then there is the question of fingerprinting. Ms. Fraser found serious delays in the processing of fingerprints, resulting in backlogs that could affect the screening of possible terrorists.

Current border watch lists. Good airport security. Up-to-date fingerprint records. As Ms. Fraser put it at a news conference yesterday, "these are basic things." Ottawa is not providing them, and Canadians are less safe as a result.

At a time when the country is focusing on the sponsorship scandal, it is useful to be reminded that a government's most basic function is defending the security of citizens. Fixing our security net is quite literally a matter of life and death. Ottawa should take Ms. Fraser's critique seriously and get to work.