Pubdate: Sat, Jan 23, 1999 Source: National Post (Canada) Copyright: Southam Inc. Website: http://www.nationalpost.com/ Forum: http://forums.canada.com/~canada Contact: Peter Kuitenbrouwer, National Post CUSTOMS OFFICERS STOLE DRUG CASH, MOUNTIE SAYS At Pearson international: Group stole at least $1-million in seized money: documents Customs officers working to fight the money-laundering problem at Canada's busiest airport were themselves involved in the theft of drug cash and its transfer to various foreign accounts, according to court documents discovered by the National Post. Court documents filed this week say the group channelled the stolen cash out of Canada into the U.S., the Bahamas, and the Channel Islands in a bid to hide it. The activities took place between January, 1995, and December, 1998, and involved the transfer of money to locations in Ontario, New Jersey, elsewhere in the United States, the Bahamas, and the Channel Islands. Sources close to the investigation say the thefts took place during an ongoing joint operation by the RCMP and Canada Customs, during which agents X-rayed suspicious luggage on flights from Toronto's Pearson International to Colombia. Suitcases containing cash are part of a drug cycle in which cocaine comes into Canada and is sold on the streets. The Canadian cash paid for the drugs is then converted into U.S. dollars and sent back to Colombia to buy more drugs. Sources say that, rather than turn the seized cash -- amounting to at least $1-million (US) -- over to police, the group pocketed it and banked it. One bank reported the unusual deposits, a source said. A bail hearing has been set for Monday morning for five men and two women in Brampton, Ont. Sources say police have made arrangements with the lawyers representing the group that they turn themselves over to the police. The case raises fresh questions about laundering controls in Canada, which have been repeatedly criticized in the United States and Europe as an easy place to move the proceeds of crime. The team targeted in the current police case were themselves part of a federal effort to step up the fight against launderers. Information sworn Wednesday by Sergeant Robin Smith, of the London RCMP proceeds-of-crime unit, outlines the basis for 12 charges. According to the documents, one member of the group,"being an official Revenue Canada customs officer, did unlawfully commit a breach of trust, did steal money the property of person or persons unknown of a value exceeding $5,000." That person "did commit a breach of trust in connection with the duties of his office by failing to report the seizure of money as he was required to do," the record says. Leading the investigation is Corporal Jamie Jagoe of the London RCMP. "It certainly is an interesting case," Cpl. Jagoe said yesterday. He declined further comment. The information outlines nine counts of breach of trust and two counts of unlawful possession of property under the Controlled Drugs and Substance Act. There is also one count of theft. The group "did unlawfully conspire . . . to use, transfer the possession of, send, or deliver to any person or place, transport, transmit, alter, dispose of, or otherwise deal with in any manner or by any means any property or any proceeds of any property to wit: money, with intent to conceal or convert that property," in violation of federal narcotics laws. One person named in the records worked in the Intelligence and Contraband Division of Revenue Canada Customs at Pearson International Airport in Toronto, a source at the division confirmed yesterday. He hasn't been working with the intelligence unit for three years, however, said an official at the division. The court records allege that between January, 1995, and December, 1998, the group "did unlawfully have in their possession property or proceeds of property, to wit . . . money . . . knowing that all or part of the property or those proceeds was obtained or derived directly or indirectly as the result of the commission in Canada of an offence under Part I of the Controlled Drugs and Substances Act." Police in recent years have formed nine Integrated Proceeds of Crime Units across Canada to fight money laundering. The Toronto unit involves four city police forces, the Mounties, the Ontario Provincial Police, and Canada Customs. Those involved in the Toronto ring uncovered by police had been themselves working for the Proceeds of Crime team. In its report on a 1997 visit to Canada, the Paris-based Financial Action Task Force on Money-Laundering, set up by the Group of Seven industrialized countries, criticized Canada for failing to set up a mandatory regime of reporting of suspicious transactions. All other 25 nations in the Task Force have passed laws requiring that "suspicious transactions" be reported to a central agency. - --- MAP posted-by: derek rea