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Fentanyl traffickers are using Canadian banks to launder money

Canada’s financial intelligence agency issues guidelines on what banks should be on the lookout for

Canadian money service businesses are being used by drug traffickers to purchase fentanyl from abroad, and then launder the proceeds of those sales through domestic banks and credit unions, according to the Financial Transactions and Reports Analysis Centre of Canada, more commonly known as FINTRAC.

Money service businesses are small shops that often provide same-day loans, foreign exchange dealings, cash money orders and travellers cheques and also provide quick money transferring services. Some prominent examples include Money Mart and Western Union, but there are hundreds of small money service businesses registered with FINTRAC and scattered throughout Canada.


In an operational alert issued on January 31, FINTRAC provided a list of “indicators” that demonstrate how drug traffickers exploit the Canadian financial system to acquire fentanyl and “launder the proceeds”. One of those indicators, said the FINTRAC document was “wire transfers or money order below the $10,000 reporting threshold at multiple money services businesses over a short period of time, normally with cash or prepaid credit cards.”

Typically, these transfers of cash are sent by individuals in Canada that appear to be unconnected, but to the identical recipients in China, Ukraine or India, the briefing note said.

Once a fentanyl purchaser receives the drugs and sells, there are specific ways in which he or she will “launder” the proceeds — in other words, make it look as if the money was obtained legally. “The laundering of the proceeds of fentanyl trafficking in Canada generally takes place through Canadian banks, caisses populaires and credit unions,” says the FINTRAC alert.

FINTRAC is calling for banks and credit unions to look out for individuals who tend to deposit cash into an account, then immediately move that cash via multiple email transfers or transfers between accounts — these transactions often happen at multiple different banks.

Yet another indicator that someone might be buying fentanyl from abroad to sell in bulk in Canada, is if an account associated with a customer has significantly more email money transfers for small amounts than fits their problem.

In addition to that, banks should be wary of customers who who deal with firms that “advertise pharmaceuticals, supplements, weight-loss medications and related products.” These firms, according to FINTRAC can knowingly or unknowingly be used to mask fentanyl trafficking simply because they use packaging and shipping services that are very similar to those in the fentanyl trade.

In fact, FINTRAC suggests that financial institutions should also be suspicious of individuals who sometimes use a post office box as a mailing address — fentanyl is typically trafficked into Canada using the postal system.

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