‘Operation Mad Money’ Drug and Money Laundering Investigation Has Links to GTA Real Estate, Documents Say

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A drug and money laundering investigation called “Operation Mad Money – which stretched from Toronto to British Columbia to China – showed links between illegal marijuana sales and the booming real estate market. booming Toronto, CTV News Toronto has learned.

The investigation, led by the Calgary Police Department, is part of an attempt to seize millions in what authorities allege to be drug profits that ended up in money-service businesses in the Greater Toronto Area. , who passed them on to people trying to buy houses.

And that could be the tip of the iceberg, says a retired Royal Canadian Mounted Police officer and money laundering expert. In an interview, Garry Clement Ontario is expected to follow in British Columbia’s footsteps and hold a public inquiry to assess the impact of laundered money on the real estate market.

“We know it’s happening, we know the money is coming into the province. All you do is look at the number of condos that are vacant, ”Clement said.

“Canada really needs to sit down and realize that we are still a very weak link. This case shows that we have a long way to go. “

The investigation began when a Calgary police officer purchased marijuana from websites called BudExpressNow and Cheapweed, according to a petition in Ontario Superior Court.

Court documents claim the sites did not have a license to sell, and an investigation showed they had made more than $ 3 million in revenue through multiple feed accounts, accepting electronic bank transfers with explanatory notes including “weedguy” and “ed and bills”.

Police watched the money being deposited into bank accounts in Edmonton and located some of it at three properties outside of Vancouver, where they say it was used to pay $ 1.38 million in bills electricity.

The properties had licenses from Health Canada to cultivate around 5,000 marijuana plants, but a 2020 raid counted nearly four times as many.

The British Columbia Office of Civil Forfeiture is requesting the seizure of these properties.

In Ontario, authorities say in documents filed in Superior Court that the purported profits of the transaction came under the control of Toronto-area money-services firms, which officials say sent money to money in Canada to Chinese nationals interested in purchasing real estate in Toronto.

In return, Chinese nationals refunded the money to China, the documents say, noting that it is a way to bypass currency controls in China that prevent easy withdrawal of money from that country.

The Attorney General of Ontario is now asking for the seizure of some $ 3.7 million in bank accounts he says contain money from sales of marijuana.

“The pattern of deposits in the accounts in question, including frequent and large deposits made in round numbers, is indicative of illegal activity,” said the court’s request.

“The contents of the Respondents’ accounts consist in whole or in part of the proceeds of illegal online sales of cannabis and / or constitute instruments of money laundering. “

The allegations are brought before a civil court, which relies on a lower standard of evidence than a criminal court. Nothing has been proven and a judge is evaluating the case now.

An attorney for the recipients of the money said in a recent court hearing that they believed everything was legal and had no idea the money deposited into their accounts could come from unlicensed marijuana.

“The respondents were in no way involved in the alleged illegal acts allegedly committed by unknown perpetrators,” said attorney William E. Peppall.

“This is not a delinquent individual, criminal or criminal mastermind. The respondents are innocent bystanders who for legitimate reasons bought Canadian currency at fair market value in exchange for their currency. Canadian won by legal means, ”he said. noted.

Clement, the money laundering expert, says the alleged arrangement has a lot in common with a scheme in British Columbia where drug money was laundered through government-licensed casinos and poured into real estate – so much so that a government report found it to be responsible for a five percent price spike.

The BC government has called a public inquiry known as the Cullen Commission. Clement said a public inquiry may also be needed in Ontario.

“It shows that we have a lot of loopholes in our system,” he said.

FINTRAC, the federal agency that monitors money laundering, says it has conducted 276 reviews in the past three years and 700 real estate transactions in the past five years.

The agency claims to have issued nine notices of violation for non-compliance, five in the real estate sector for $ 143,219, two in money services for $ 143,219 and two at dealers in precious metals and stones for a total of 272 $ 910.

The agency said the money services business identified in the court case was registered, but could not share anything it disclosed to police about the case.

The Department of Finance told CTV News Toronto in a statement it had invested $ 98.9 million over five years to improve the RCMP and strengthen its foundations to fight money laundering and identify proceeds of crime.

“New Integrated Money Laundering Investigation Teams (IMLITs) will be created in British Columbia, Alberta, Ontario and Quebec, bringing together the expertise of various organizations to address high profile cases and advance cases. national money laundering and proceeds of crime investigations. Said a spokesperson.

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