ORGANIZED CRIME BEGINS USING CANADA AS BASE FOR WIDE-RANGING OPERATIONS

TORONTO -- The world's gangsters are discovering a haven: Canada.

Attracted by comparatively weak laws governing their activities, mobsters
in the past decade have made Canada "one of the most important bases for
the globalization of organized crime," says Antonio Nicaso, a Canadian
authority on global crime. Adds Jack Ramsay, a member of the Canadian
Parliament: "The laws say to the professional criminal that Canada is an
easy mark."

Gangs are spreading into everything from narcotics to prostitution to car
theft. Police say growing car-theft rings have contributed to a 79% rise in
vehicle thefts in Canada over the past decade.

Canada's organized-crime wave directly affects the U.S. Police say drug
smuggling into the U.S. from Canada is rampant. In recent years, Canada has
become a key entry point for Asian heroin headed for North American
markets, and Washington Attorney General Chris Gregoire said in May that
his state is "worried about the high-quality, high-potency marijuana which
is moving from British Columbia into Washington."

Phone Scams Target Americans

Numerous telephone-scam outfits "are moving operations to Canada," says
Martin Biegelman, a U.S. postal inspector who tracks such fraudulent
organizations. In the past few years, Quebec, Ontario and British Columbia
have become three of the top 10 locations for phone scams targeting
Americans, he says. Crooks are fleeing the "stricter enforcement ethic" of
the U.S., he says. They know that in Canada, extradition "could take
years," if it happens at all, even if they are caught.

Jim Fisher, a Vancouver, British Columbia, police officer on temporary
assignment with Criminal Intelligence Service Canada, adds: "Canada is one
of the main centers in the world" for counterfeit credit-card technology.
"We've seen over and over again in the U.S. when Los Angeles and New York
had a lot of problems with it, it was Canadian-Asian criminals that were
running the operations," says Mr. Fisher, an expert on Asian organized
crime in Canada. Not surprisingly, Visa International's Canadian unit says
its credit-card fraud rate jumped 31% last year from 1996, more than double
the increase world-wide, and a Visa Canada official places the blame on
growing organized-crime groups.

Exporting Stolen Cars

Canadian criminals also give their American cousins a helping hand. Many
cars stolen in the U.S. are driven north to be exported overseas because
customs-inspection procedures are less rigorous in Canada than in the U.S.,
says Ron Giblin, an official with the Insurance Crime Prevention Bureau in
Toronto. In June, police broke up a car-theft ring based in Montreal,
seizing 55 luxury vehicles that were to be exported to Russia, Lebanon,
Africa and elsewhere.

"Virtually every major criminal group in the world is active in this
country," concludes a report by Criminal Intelligence Service Canada, an
umbrella group for police forces across the nation. Organized crime in
Canada is growing "ever more powerful, with an unprecedented potential for
corruption," the report adds.

Crime rings made up of Italians, Asians, Russians, Colombians, native
Canadians and others now flourish in Canada. And these diverse groups
increasingly cooperate with each other. In addition to comparatively short
prison sentences, Canada offers a porous border with the U.S. and easy
immigration laws.

The Big Circle Boys

Police say such advantages helped attract Dai Huen Jai, Cantonese for "Big
Circle Boys," a gang that began in Chinese prisons. The gang has built a
presence in Canada in heroin smuggling, high-tech credit-card fraud,
immigrant smuggling, prostitution and car theft.

With an estimated 500 members in Toronto and 250 in Vancouver, the group
has contributed to sharp increases in crime in Canada, police say. And in
recent years, the Big Circle Boys have been involved in credit-card fraud
in California, says William Park, a Los Angeles Police Department
detective. Some Big Circle members are also involved in prostitution,
loan-sharking and currency counterfeiting in California, he adds.

Recent signs indicate the Big Circle Boys may be infiltrating Canada's
law-enforcement agencies, where corruption is rare. Last month, a Vancouver
police officer with a special organized-crime unit was charged with leaking
information to suspected crime figures and counseling a known Big Circle
member to commit perjury. A Vancouver probation officer also was charged
with various offenses in connection with the case, following a nine-month
investigation into alleged Vancouver police cooperation with crime groups.
The cases are awaiting trial.

Lax Money-Laundering Laws

Now Canada is facing greater pressure to crack down. At the Group of Seven
summit meeting in May, officials of other leading industrial countries
singled out Canada for having lax money-laundering laws.

Canada says it is developing new laws to track currency importing and
require financial institutions to report "suspicious" transactions.

But Canada still lacks strong racketeering laws, stiff sentences and an
institution such as the U.S. grand jury to investigate suspects. These
tools all encourage criminals to testify against higher-ranking mobsters,
says Royal Canadian Mounted Police Inspector Gary Nichols, who is in charge
of a Toronto-area proceeds-of-crime unit, which seeks to confiscate money
raised through criminal activity.

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