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Money mules are used to launder cash, often with cryptocurrency, and allow criminals to move their ill-gotten gains by concealing identities, sources and destinations of funds
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B.C.’s financial market regulator and the RCMP have joined forces to go after so-called “money mules” in an effort to disrupt offshore investment scams.
On May 29, the RCMP’s integrated market enforcement team and the B.C. Securities Commission hand-delivered warning letters to 10 suspected money mules. Money mules are used to launder cash, often with cryptocurrency, and allow criminals to move their ill-gotten gains by concealing identities, sources and destinations of funds.
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RCMP Supt. Adam MacIntosh, in charge of the federal financial integrity program in the Pacific region including B.C. and Yukon, said the warning letters are an initial effort to disrupt those more likely to be unwittingly helping to launder money.
“Through that, we are going to identify individuals who are clearly showing the intent and knowledge as it relates to their activity, which is going to be required in order to be able to substantiate a charge and ultimate conviction in a criminal court,” said MacIntosh at a news conference Monday at the RCMP’s B.C. headquarters in Surrey.
If part of an investment fraud scheme, moving money for others can also lead to allegations of misconduct under B.C.’s Securities Act.
No arrests have been made.
The representatives of the RCMP and the commission wouldn’t say exactly how much money was involved, but that it was in the range of hundreds of thousands of dollars.
Online scams have originated in the past from countries in eastern Europe and also in Africa, including Nigeria, but many are now coming from Southeast Asia, said Sammy Wu, manager of investigations for the commission, who spoke at the news conference.
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B.C. Security Commission and RCMP officials said the mules in the province could be unwittingly helping out, thinking they’re assisting an online friend, are wilfully ignorant or are aware of what they’re doing. Some might also be victims, having been scammed themselves.
Criminals use a variety of tactics to recruit people to act as money mules, often offering a portion of the transferred funds as payment. The criminals may lie about their identity, promise job offers and start an online friendship or romance.
The RCMP and commission representatives said they didn’t know which organized crime groups were behind the online scams.
The officials also said, that generally, money mules could also be moving criminal gains from drug trafficking, as well as crimes such as online fraud.
The commission identified the suspected money mules after uncovering information that they sent or received money or cryptocurrency that was obtained from victims of investment fraud, said Wu.
MacIntosh repeatedly said the first line of defence was public education and the key to prevention was people simply not answering anonymous texts or phone calls, the first step in getting hooked into online scams.
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Earlier this year the commission released figures that showed British Columbians reported $46.4 million in losses from online investment scams in 2023. That’s up from reported losses of $24 million in 2022 and $8.5 million in 2021.
Losses are believed to be much greater. The Canadian Anti-Fraud Centre estimates that only five to 10 per cent of online fraud is reported. That means in B.C. there are likely hundreds of millions of dollars in losses, a figure commission officials have agreed is likely the correct order of magnitude.
Asked Monday why there aren’t more alleged criminals facing charges for money laundering and this type of growing fraud, MacIntosh said it’s not easy to establish who is behind the computer keyboard, who is in charge or where it’s coming from when offshore.
And it’s not easy proving intent, and you have to associate proceeds of crime with an actual criminal offence, he said.
“So there is no clear easy solution to this. Certainly, no matter how much we change our legislation, we’re not going to arrest and charge our way out of this problem,” said MacIntosh.
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Wu observed it remains to be seen whether the use of the warning letters will be effective.
“If it’s not, I don’t think we have anything to lose. It’s something that we try and we can find something else. We’ll try again,” he said.
Money laundering has been a hot-button issue in B.C. for years, and the provincial government launched a public inquiry led by B.C. Supreme Court Justice Austin Cullen that delivered recommendations in 2022.
Cullen recommended that the B.C. government create a new money laundering intelligence and investigation unit because the federal government was failing to carry out its mandate to investigate money laundering.
Asked how many RCMP staff were working with the integrated market enforcement team, Macintosh wouldn’t say. He said, however, in B.C., the unit was “well-staffed” and they have a lot of files that they’re investigating, including traditional market enforcement type of investigations.
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