The federal Financial Transactions and Reports Analysis Center of Canada (FinTrac) has released an alert to banks, credit unions and other organizations regarding drug traffickers laundering money through their organizations in relation to the deadly opioid, fentanyl.
Fentanyl is wreaking havoc across Canada and this problem is not just secluded to large cities. According to Bob Kapur, Deputy Chief Anti-Money Laundering Officer at the Canadian Imperial Bank of Commerce (CIBC), “It’s everywhere, small towns as well.” Fintrac is the first financial intelligence unit in the world to send out an alert in relation to an opioid.
Financial intelligence is suggesting that the traffickers are receiving fentanyl and compounds of the opioid from foreign sources, primarily China, but with the release of FinTrac’s alert, financial institutions (FI’s) are better able to detect the warning signs for money laundering related to this drug. The traffickers pay for this opioid using virtual currency such as Bitcoin or wire transfers and money orders which go through banking and money service businesses. The report warns businesses to look out for multiple individuals who are sending money orders to the same recipients in places like China, the Ukraine and India. In addition, FI’s are advised to look out for customers that often use wire transfers of money orders, cash or prepaid credit cards under the $10,000 reporting threshold at multiple money service businesses over a short period of time.
Once the money transfers are complete, the drugs are then smuggled into Canada using the postal system and are often disguised as pharmaceuticals, supplements, weight-loss medications and other related products because the shipping costs are similar to that of the opioids. With that said, the report warns banks when dealing with companies that advertise such products to see this as a “red flag” which will further help them to detect illicit transactions.
Other warning signs FI’s should be wary of include 1) the client’s mailing address is a post-office box, 2) the customer is receiving multiple direct deposits from global payments, 3) the customer is receiving payroll deposits that are not in line with the job they have listed on file, or 4) the customer is depositing checks endorsed by third parties.
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