DIRTY MONEY

Businesses Are Encouraged to Be Vigilant for Red Flags

A provincial program is getting the message out about the dangers and
risks of money laundering.

Melissa Guindon and Molly St. Arnauld have visited the Rose City
twice in the last few weeks to make presentations to the Rotary Club
of Camrose, July 17, and the Daybreak Rotary Club, Aug. 1.

The program is in its second year and Guindon, who has been involved
since the beginning said, this year they decided to make as many
presentations as possible to Rotary Clubs in the northern portion of
Alberta, as well as chambers of commerce and other business groups
and organizations.

"It has been really beneficial because they have so many industries
and businesses represented. We are specifically trying to reach
businesses who take in a lot of cash, but we will present to whoever
wants to hear," Guindon said.

Widespread

Money laundering is not just a big city phenomenon but reaches out
throughout the province and country to businesses that take in a lot
of money, no matter where they are located Guindon said.

"The small town drug dealer might want to clean his money up as well
and gangs are expanding," Guindon added.

Drug dealers are increasingly turning to real estate to clean up
their money as quickly as possible. By putting down a cash down
payment, Guindon said they can purchase a house will minimal risk of
losing a lot of money especially if they turn it into a hydroponics
operation and it is busted by the police.

"Real estate is really popular because they can put five per cent
down and set it up as a grow op and then if it is busted, they don't
lose much of their investment," Guindon said. "We encourage realtors
to say, we don't want cash down payments but ask customers to go get
a bank draft. Then they know there are strict regulations being followed."

"We identify the red flags you should look for. A foul odour, the
smell of moth balls indicates marijuana and the smell of cat urine
indicates crystal meth," St. Arnauld said.

Signs

"Individuals who deal with a large amount of cash should realize the
signs. Many gangs fold a bill over a bundle of money," Guindon said.
"We want people to realize the consequences to their business and the
community. It's a billion dollar industry in Alberta."

St. Arnauld added, "Alberta and British Columbia are known for
marijuana and cocaine and the real figure is hard to track."

Guindon and St. Arnauld admit that criminals know that banks are
required to report transactions involving $10,000 or more in cash and
they take advantage of it. "They will make deals at just under the
threshold. They know that $10,000 must be reported so they will use
$9,000 or $9,900 in cash so it is not detected. It should be a big
red flag if they are coming in with small denominations," Guindon said.

Another major clue is when a customer comes in and wants to make a
big purchase but doesn't care about the cost. "A big red flag should
go up. There is also smurfing where they befriend little old ladies
who are trusting and unknowingly are asked to do the deposit (without
knowing they are depositing and using dirty money)," she added.

Suspicious

"If someone is suspicious they have accepted cash that might be
dirty, call the police. Any kind of information may be enough to
solve the case. Right down as much information as possible about the
individual and the transaction and by reporting it they are clearing
themselves of charges of wilful blindness charges," Guindon added.
"One report can make a difference. In fact, one turned into one of
the biggest investigations."

In addition to real estate and many other high ticket items, like
vehicles, electronics are always popular. "They definitely do like
to buy expensive toys and jewellery and they like to pay in cash.
Jewellery stores are a popular target," she explained.

Contractors are also becoming targets as upgrades can be completed
and money is not an object. "They don't mind paying the capital gains
if it helps them make a profit," Guindon said.

"Contractors do see it a lot and they need to say, we'd rather have a
bank draft. The construction market is so hot right now it is
tempting to take the money, but it should also be a red flag if they
are willing to pay more than what the work is worth. The business can
be charged with wilful blindness if they process the transaction,"
St. Arnauld explained. "Investigators are going more and more after
businesses who continue to process these types of transactions for criminals."

Impact

For the community, the impact can be huge Guindon cautions. "If a
competitor is accepting illegal money they may have extra revenues
coming in that allow them to under cut prices because they have lower
costs. It really has an impact. The two (businesses) can have the
exact same item, but if one is accepting illegal money at a profit
they can charge less and sell more," Guindon said. "It can happen in
any industry."

St. Arnauld suggests businesses err on the side of caution. "If
people are worried at all, check it out. If you are concerned in
anyway that you may be dealing with someone laundering money contact
police. Don't be exploited by the criminals."

Businesses who sell high ticket items like ATVs, accessories,
motorcycles, expensive clothes, electronics, homes and jewellery
should be particularly conscious of the money laundering problem
plaguing the province.

Businesses should ask themselves does the transaction fit the
customer profile, is it the usual method for this type of
transaction, do you understand the transaction and are you
comfortable with it. If in doubt, there may be a possibility your
business is being used to launder money, call police.