Criminology Term Paper: Money Laundering Analysis in Canada

This report examines money laundering in Canada from a criminological perspective, focusing on the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. It delves into relevant theories, including rational choice, conspiracy, and deterrence theories, as well as the research supporting them. The report analyzes a specific case involving money laundering through Canadian casinos, highlighting the issues, critical analysis, and policy recommendations. It also discusses the instrumental role of theory and research in understanding organized criminal activities. The report concludes by summarizing the key aspects of money laundering, including its phases and impact on society, emphasizing the importance of understanding and combating this form of organized crime. The report references academic journals and Canadian legal sources.

Running Head: CRIMINOLOGY
MONEY LAUNDERING IN CANADA
Name of the Student
Name of the University
Author’s Note

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Table of Contents
EXECUTIVE SUMMARY:............................................................................................................2
INTRODUCTION:..........................................................................................................................3
RESEARCH:...................................................................................................................................3
THEORY:........................................................................................................................................4
CRIME:............................................................................................................................................5
Issue:............................................................................................................................................5
Critical Analysis:.........................................................................................................................5
Theory:.........................................................................................................................................6
Finding:........................................................................................................................................6
Policy Recommendations:...........................................................................................................7
Sentencing:..................................................................................................................................7
WHETHER THEORY AND RESEARCH ARE INSTRUMENTAL:...........................................7
CONCLUSION:..............................................................................................................................7
REFERENCES:...............................................................................................................................9

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EXECUTIVE SUMMARY:
The study explains the theories of criminology with respect to the organized crimes that
is Money laundering. The study explains a case study and its pattern in relation with the research
of the crime of money laundering. The thesis aims to bring out the analysis of the complete
review of the crime and its theories with respect to its researches by various pioneers of law. The
study explains the theories and its researches and affirms that both are instrumental depending
upon the nature of crime and the application of theory.

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INTRODUCTION:
January 31st, 2018 marks the standing point for the statutory review of the Proceeds of
Crime (Money Laundering) and terrorist Financing Act. Section 462.31(1) of the Act states that
the any transfer, delivery, disposition or possession of money by any means, knowing that the
money was obtained from the proceeds of criminal activity shall amount to criminal offence. In
other words, money laundering is the method to camouflage the origin of money or property
obtained from criminal activities.
Anti-money laundering scheme of Canada was formally established and enforced in 2000
under the National Initiative to Combat Money Laundering. The study aims to bring out the
details of the crime, its analysis with the theories laid down to its relevancy.
THEORY:
According to Taylor, Fritsch and Liederbach (2016), it has been stated that the theory of
money laundering is largely based on the rational theory. The rational theory means that the
choice of criminal activity is made by the circumstance faced by the person and the explicit
driven activities like the diversity of risk, which is rational in every decision made by them.
According to Connachie and Tudge (2013), it has been explained that money laundering
is a part of conspiracy theory. This theory means that there is more number of stores and hence,
there are more places to shuffle money.

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According to Unger (2013), money laundery is largely based on the theory of deterrence.
This means that the process of punishment should be deterrent to inflict fear among the criminals
so that the honest businesses are not suffered.
According to Chong and Lopez-De-Silanes (2015), the deterrence theory has been
affirmed. It has been explained that it is because of such criminal activities that the honest
businesses suffer losses. These activities show cast the people the luxury of life while the honest
businesses struggle to maintain their profits amidst their honest principles. However, Nunes et al.
(2015) has supported the cause of rational theory by stating that crimes are organized, planned
and executed by means of criminal minds. These minds are not the creation of market but they
are derived from the circumstances faced by these people and their rationality to avert risks and
make decisions.
RESEARCH:
Although money laundering is explained with a number of theories by renowned
scholars. However, the most explicit theory that explains the crime is the rational theory, which
states that the criminal minds are the outcome of circumstances faced by them and the rationality
of decisions assessed along with the diversity of risks agreed by them. However, the deterrent
theory also explains the process of punishment, which would instill fear in the minds of other
criminals, and they would refrain from doing such activities. On the contrary, the rational theory
also gives rise to the conspiracy theory. In other words, criminals are so risk-averted and
rationale that they conspire to do such activities for legitimation of illegal money. They make
such attempts because they know their actions are of criminal nature and the money obtained by
such actions is of the similar nature.

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CRIME:
On January 28, 2019, Cooper (2019) that the regulators that approximately 1.7billion
have been believed to have transacted through B.C. Lottery Corporation. These are high-end
accounts with huge amounts of money financed by loan sharks and unauthorized bank drafts.
This has been recorded as one of the massive money laundering cases in the history of British
Columbia.
Similar case was seen where an American Bitcoin exchange owner murdered his
girlfriend in the Phillipines ("Duhaime's Financial Crime and Anti-Money Laundering Law",
2019). The case is on trial.
Issue:
The accused are gaming accounts to launder cash through bank drafts. In other words, the
criminal organizations provide loans to high rollers and engage low-level members to bet with
little amounts of money. These members exchange the cash into chips provided by casino, place
bets and play games for some time with a portion of such money and later, they leave the casino
with the legal checks or cash with a receipt ensuring they obtained by winning the amount.
The charges were laundering of proceeds obtained by criminal activities and possession
of property by criminal activities.
Critical Analysis:
It has been contended by the government that the cash only transactions are used by the Chinese
VIPs and loan sharks with respect to over 600million$ of illegal money was laundered through
these casinos. The Gaming Enforcement Branch has witnessed the fact stating that the cash
presented by them were in 20$ bills which is the most preferred mode of currency in the illegal

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drug industry of British Columbia. However, the accused have argued that the Patron Gaming
Fund figures were inclusive of the recycled money from gambling and thus, it cannot be believed
that 1.7billion$ of bank drafts could be deposited into the accounts.
It has then been disputed by the BC Gaming Industry Association that over 1billion$
were re-deposited funds by these Chinese VIPs who won in gambling and according to the rules,
these funds should not be included in the estimation of laundered money. They have further
disputed that all the drafts issued by the banks are in compliance with the anti-money laundering
regulations and hence, they cannot be laundered money. However, there are suspicious bank
accounts as third party nominees are exclusively used for the purpose of legalizing the illegal
money of these criminal organizations.
Theory:
In the given case, the rational and conspiracy theory can be applied as the Chinese VIPs conspire
to organize and hire men to launder money and on the other hand, their decisions are so risk
averted that they are well prepared for the consequences.
Finding:
According to Edmonton journal, it has been stated that more than 40billion$ are
laundered in Canada every year. The crime statistics of drugs, corruption and theft and their GDP
are the underlying data extraction mechanism for the assessment of money laundering. there are
other methods of laundering money like buying luxury properties and reselling them to claim
legitimate funds. However, the method through casino has served Laundromats for a long time
leading to the collective system failure.

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Policy Recommendations:
Casinos and racetracks became highlighted and FINTARC took them under its reporting
authority to keep check on money laundering and funding of illegal activities including
terrorism.
Sentencing:
The decision was not adequate to the reasonable prospect of serving the public interest
though, conviction was held by the adjudicating authority.
WHETHER THEORY AND RESEARCH ARE INSTRUMENTAL:
According to Gilmour (2016), Organized criminal activities are worldwide widespread in the
corners across the globe and they are nurtured by various methods, people and regions which are
controlled by various criminal organizations. However, according to Irwin et al. (2012:86) it has
been stated that money-laundering processes have been superficial and hence their explanation
with respect to cash flow or transaction, or behavioral pattern cannot be assessed. Thus, from
above analysis, it can be understood that criminal activities and their research are instrumental to
various theories as the pioneers are deeply engaged in bringing out the hidden gaps of these
crimes. Nevertheless, most theories may contradict with each other, but it is the research, which
determines their applicability to different areas of crimes, which may be of similar nature, but
their assessment may require a different theory application.
CONCLUSION:
Criminals are nurtured by variety of methods, people and the regions, which are controlled by
various criminal organizations. With the development of techniques and technologies, people

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have started migrating to various corners of the world. Their migration has shaped the concept of
organized crime. These crimes provide a platform of legitimate enjoyment over illegitimate
funds by purchasing lavish items and resale them at higher prices to other parties. However, the
process of money laundering has been characterized by three phased actions, which are
placement, layering and integration. Thus, it can be concluded that money laundering inhibits the
benefits of proceeds obtained from crimes such as drugs trafficking, smuggling, and fraud and so
on.

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REFERENCES:
Chong, A., & Lopez‐De‐Silanes, F. (2015). Money laundering and
its regulation. Economics & Politics, 27(1), 78-123.
Cooper, S. (2019). Nearly $2 billion in dirty money may have flowed through B.C. casinos, far
more than official estimates. Retrieved 6 August 2019, from
https://globalnews.ca/news/4897032/bc-casinos-money-laundering/
Duhaime's Financial Crime and Anti-Money Laundering Law. (2019). Retrieved 6 August 2019,
from http://www.antimoneylaunderinglaw.com/
Gilmour, N. (2016). Understanding the practices behind money laundering–A rational choice
interpretation. International Journal of Law, Crime and Justice, 44, 1-13.
Inc., P. (2019). Metro Vancouver casinos gang destinations for money laundering: report.
Retrieved 6 August 2019, from
https://business.financialpost.com/pmn/business-pmn/canadian-press-newsalert-money-
laundering-through-b-c-casinos-tied-to-opioid-crisis-report-2
Irwin, A.S.M., Choo, K.R., Liu, L., 2012. An analysis of money laundering and terrorist
financing typologies. J. Money Laund. Control 15 (1), 85e111
McConnachie, J., & Tudge, R. (2013). Rough Guide to Conspiracy Theories, The (3rd). Rough
Guides UK.

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Money laundering funded $5.3B in B.C. real estate purchases in 2018, report reveals | CBC
News. (2019). Retrieved 6 August 2019, from https://www.cbc.ca/news/canada/british-
columbia/laundered-money-bc-real-estate-1.5128769
Nunes, M. M., Kwan, M. T., Singh, R., & Tam, W. S. (2014). Explaining money laundering with
rational choice theory. HKU Theses Online (HKUTO).
Taylor, R. W., Fritsch, E. J., & Liederbach, J. (2014). Digital crime and digital terrorism.
Prentice Hall Press.
Unger, B. (2013). Money laundering regulation: from Al Capone to Al Qaeda. Research
handbook on money laundering, 19-32.