MOB RULE: Canadian Real Estate To Government, Organized Crime Infiltrated Everything – Intelligence

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  • “…Organized Crime Loves Canadian Real Estate…Money laundering is popular, as you might guess with all of the illicit cash. That’s pretty obvious. What’s not obvious is the amount laundered. It rivals the size of whole financial systems in small countries. CISC found 30% of assessed organizations participate in laundering professionally. Maybe there’s some sort of money laundering Olympics we can host?”

Canadian Real Estate To Government, Organized Crime Infiltrated Everything: Intelligence

Some countries lack corruption and some lack investigations revealing corruption. Canada feels like the latter after the data Criminal Intelligence Service Canada (CISC) shared. CISC might not ring a bell, because they operate largely behind the scenes. They provide law enforcement with intelligence on organized crime groups and track activity.

The agency’s 2021 Report on Organized Crime reveals they identified thousands of organized crime groups. The report also reveals these organizations have infiltrated everything from real estate to government. Let’s take a quick dive through some of the data points discreetly eroding your quality of life. 

Canada Is A Cesspool Filled With Organized Crime

The report focuses on organized crime groups (OGCs) that are “higher-level” threats. Higher-level threats use methodic violence, infiltrate law enforcement, security, or government. They also use multiple businesses, cooperate with other OCGs, and are often international. These aren’t street-level thugs, but highly methodic and hierarchical organizations. Think criminal enterprises, complete with top level management. 

Sounds complex and there can’t be that many, right? Maybe 5 or 6, is what you’re likely thinking. Try over 2,600 operating in Canada, that they have identified. CISC says 45% are relatively new entities too. Canada’s self-employment is plummeting, but at least we’re getting more world class criminals.

But for real, let’s put that number into context. Let’s say there are 3 people in a group, the legal definition. Not exactly organized, unless one person is telling two people to do stuff, but we’re low balling here. That works out to 1 in 4,000 Canadian adults that are a member of an OCG. There are more organized criminals in Canada than Toronto high school teachers. Just the ones identified. 

CISC has conducted threat assessments on 469, a relatively small share. Even with just that tiny number, it reveals some very large problems for Canada. They’ve labeled 14 as “national” high level threats. That means they present a national security risk and conduct business across borders. It includes “mafia” groups, explained the agency. Half of the high-level threats are located in Ontario.

Organized Crime Loves Canadian Real Estate

Canada’s organized crime groups must have been really into HGTV growing up, with real estate being a top interest. Financial crimes such as mortgage and real estate fraud are amongst the top 3 activities. The other two rounding out the top are illicit drugs and crimes against persons, such as extortion. Not very Canadian of them. That doesn’t even include the actual trade of real estate for laundering.

Real Estate Is A Top Tool For Money Launderers

Money laundering is popular, as you might guess with all of the illicit cash. That’s pretty obvious. What’s not obvious is the amount laundered. It rivals the size of  whole financial systems in small countries. CISC found 30% of assessed organizations participate in laundering professionally. Maybe there’s some sort of money laundering Olympics we can host? 

They warn the number is actually much higher, but due to the fact that laundering is hidden, it’s hard to find.

There are 22 groups and 9 individuals who “score high” for money laundering. The term makes it sound like they’re not sure, but that’s not what it means. Scoring high means they use sophisticated methods and often launder as a service. Money service businesses, private sector, informal transfer, casinos, and real estate are popular tools. 

Amongst professional money launderers (PML), the highest threats launder $100s of millions per year. “One senior PML network is part of international networks serving transnational criminal organizations (e.g., drug cartels) and use Canada as a transit point to launder foreign proceeds of crime,” wrote the agency. 

1 In 10 Organized Crime Groups Are Involved In Government 

When discussing numbers this large it’s hard not to believe wilful blindness is at play. There’s a reason why — 1 in 10 (11%) of OCGs infiltrated, or is in the process of infiltrating, the government. CISC warns of a “…significant intelligence gap and the actual proportion is likely higher, as the involvement of almost two thirds of the assessed OCGs in this sector is unknown.”

In other words, there’s more criminals than we think.

They add, “… some have ties with municipalities through associates or personal relations within major Canadian cities.” And people say their local government isn’t accessible. Clearly they are, you’re just not a big enough criminal to access them. 

It doesn’t stop there but we’ll just leave you with this last point on government. CISC alleged 6 of the assessed groups have “significant” influence on the public sector. That includes 4 national threats, once again indicating they likely infiltrated the government, as per the agency’s definition.

Corruption Drives Up The Cost of Everything, From Real Estate To Taxes

Canada’s a very expensive place and part of this has to do with the scale of crime, according to CISC. “Public sector infiltration increases costs of public goods and services, leads to misallocation of public resources, weakens policy making and implementation, and damages public confidence in the government and law enforcement,” warns the agency. 

They even ballpark how much it has cost taxpayers. “Corrupt activities in government processes can increase project costs by up to 50%,” CISC estimates. 

Not hard to see with CISC suggesting OCGs flock to transportation and construction. They estimate 71 OCGs are in the construction industry alone. We previously discussed how money laundering impacts home prices via marginal buying. Now more attention should be paid to how building costs inflate prices, apparently.

Why Isn’t Law Enforcement Doing Anything? 

In short, they can’t. To understand why, think back to how often you’ve heard news about a known criminal in Canada. Maybe they were the head of crime family, and they were murdered in their home or shot in public. Think about how weird that is for a second — we know they’re a criminal leader. They were just out doing stuff? We knew they headed a criminal enterprise but they’re just out for dinner, going for jogs, and shit?

Guessing a few examples came up.

Now try to think of an example in the US. It’s not impossible, but it’s relatively scarce. The reason goes back to the 70s, and the Racketeer Influenced and Corrupt Organizations Act (RICO). The law opens up anyone that benefits, even indirectly, from organized crime activity. Any leader of a group that demonstrates a pattern of activity can be held responsible. Even if the leader isn’t caught issuing the orders, they can be pursued. 

It’s not that politicians don’t understand the need for RICO-style laws in Canada. BC Attorney General David Eby has been asking the Federal government to rewrite the criminal code to prosecute organized crime. “I’ve made many proposals to the federal government, including RICO-style United States-style laws, unexplained wealth orders, increasing and dedicated policing to go after money-laundering in the province,” he told CTV News last year.

Clearly those requests didn’t go very far.

Federal support has been lighter, but member of parliament (MP) Adam Chambers is trying to build support for the issue. He’s demanding a Federal money laundering inquiry, after having a number of questions regarding the failures identified by BC’s inquiry.

“We need to look at all tools available to curb money laundering activity. A national inquiry will give us some ideas and if one of them is a RICO style act, then it should be considered,” explained MP Chambers by email.

Despite increasing support and a public demanding answers regarding the numerous failures, Canada has been strangely opposed to RICO-style laws. It’s not exactly an issue of time or a particular government either, since there’s been no action for 50 years. Law enforcement has been begging for tools like this, but the requests are ignored by every party. The country just doesn’t want to pursue it, and it’s not clear why. Wait… how many organized crime groups did you say infiltrated the government, again?

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