ACAMS Canadian Chapter Event—Canadian Money Laundering Case Studies

More than 200 AML professionals attended the ACAMS Canadian Chapter's first full-day training session on April 14, 2011 in Toronto's financial district. I found the session to be an excellent opportunity to learn more from my peers about how criminals and terrorists are using financial services in Canada to facilitate their illicit activities. The conference was Canadian focused with real case studies.

The first session of the day involved three-banking case studies and touched on advance fee fraud activity, human trafficking and terrorist financing.

It was fascinating to hear about the challenges of AML professionals when dealing with potentially laundered funds linked directly to criminal activities. In one case, the bank became aware that a client was defrauding Canadians and decided that filing a Suspicious Transaction Report (STR)—the Canadian equivalent of a Suspicious Activity Report (SAR)—was not enough. The dilemma was that if the bank returned the funds to the client, it might be seen as facilitating money laundering because the bank had grounds to believe that the funds were from criminal activity. In this case, the bank decided to freeze the funds and accept that it could be sued by the client. I think for smaller organizations, which do not have the same legal resources as a big bank, it would be difficult to freeze a client's funds without legal grounds to do so. I think it would have to be decided on a case-by-case basis. But one would have to balance the legal risks of freezing funds versus a class action law suit from fraud victims or the potential of being implicated in facilitating money laundering.

One of the other presenters spoke passionately about how banks could help in the fight against criminals and terrorists. His point made me also think about the blurring of the lines between private enterprises and law enforcement. This is probably a good question for another session but it was interesting to hear this presentation.

The next session was about online gambling scenarios. This session was entertaining and educational at the same time—definitely one of the more memorable presentations of the day. One of the key points was the use of front-line staff to interview clients about their activity without potentially tipping them off about a potential STR being filed. The presenters said they provide branch staff with scripts for them to use, including approaching the client as if they are doing a sales call.

There were several other excellent presentations on various topics during the remainder of the day such as: how to write effective STRs; dealing with sanctions; using analytics in an investigation; the nexus between fraud and money laundering; and detecting hawala activity. The best part of every session was a slide on lessons learned from the case study which succinctly summarized the key learnings that could be used by other attendees. A suggestion for next time would be to have breakout sessions where a case study would be distributed and each group would have to present what they would do. Then they could compare it to what the presenters did and I think this would create a lot of thought-provoking discussion.

Also, while it was difficult to listen to the director for the Centre for the Protection of Children talk about the commercialization of child pornography, it was encouraging to see that the financial sector is finally taking notice.

After listening to all of the sessions, I could only wish to have the resources, tools and experts that the big banks have but then I don't have to worry about the same types and amounts of risk that they have. I found a certain level of comfort that these large financial institutions have this level of infrastructure in place and it is great that they are willing to share their knowledge with the rest of us. I think this is the biggest benefit of being part of the ACAMS chapter and participating fully in the events organized. Overall, a great day was spent learning about Canadian AML case studies and I am looking forward to more thought stimulating events like this one. A big thanks goes out to the ACAMS chapter executive board for putting on another well organized and spectacular event!

Sal Jadavji, CAMS, CFE, chief AML officer at MCAN Mortgage Corporation

Leave a Reply