Month: January 2025

• Trade-Based Money Laundering: Cartels use trade transactions to legitimize and move illicit funds. This includes over-invoicing or under-invoicing goods, phantom shipments, and falsifying customs, shipping, and trade finance documents. For example, Colombian cartels have laundered millions of dollars by over-invoicing emeralds, where inferior stones are made to appear valuable to customs inspectors.
• Professional Money Laundering: Professional money launderers, who are not part of the criminal organizations but provide services to them, use their knowledge and networks to facilitate money laundering. They often operate through trading companies or money services businesses, which can include real estate transactions, setting up shell corporations, and trust accounts.
• Money Services Businesses (MSBs): Some MSBs in Canada are exploited by professional money launderers to place and transfer illicit funds. These businesses provide financial services that can be used to launder money, especially when they turn a blind eye to criminal activities or actively cooperate with criminals.
• Legal Profession: Canadian lawyers are implicated in money laundering schemes, often creating corporate structures like shell companies to hide dirty cash and conceal asset ownership. These activities can be shielded by solicitor-client privilege, making it difficult for financial intelligence agencies like Fintrac to track the flow of illicit funds.

These methods highlight the complexity and sophistication of money laundering activities by cartels in Canada, involving multiple sectors and professions.

TD Bank Bust

TD Bank cooperated with drug cartels through systemic failures in its anti-money laundering (AML) procedures. According to the US Department of Justice (DOJ), the bank failed to properly monitor transactions, allowing drug cartels to launder significant amounts of money. Specifically, the DOJ highlighted several instances of misconduct:

• Underreporting of Suspicious Transactions: More than 90% of transactions went unmonitored between January 2018 and April 2024, which enabled three money laundering networks to transfer over $670 million through TD Bank accounts.
• Gift Card Bribery: In one case, TD Bank employees collected over $57,000 worth of gift cards to process more than $470 million in cash deposits from a money laundering network. This was done to ensure employees would continue to process these transactions without declaring them in required reports.
• Ignoring Internal Warnings: Internal audit groups repeatedly highlighted concerns about the bank’s transaction monitoring program between 2014 and 2022, but the program remained largely stagnant, suffering from chronic underfunding and understaffing.

These failures allowed drug cartels to exploit the bank’s services for money laundering activities, leading to the record-breaking $3 billion fine and other penalties.

Sanctuary cities are often criticized for having higher rates of drug-related overdoses due to perceived immunity given to drug cartels and criminal aliens. Critics argue that sanctuary policies prevent local law enforcement from effectively collaborating with federal immigration agencies, which are better equipped to combat drug trafficking. This collaboration is hindered by sanctuary policies that limit communication and cooperation between local and federal agencies, making it harder to apprehend and deport criminal aliens involved in drug trafficking.

For example, the Sinaloa cartel and other Mexican drug cartels are known to smuggle drugs across the U.S.-Mexico border and distribute them through networks often staffed by illegal aliens. Sanctuary policies can enable these networks to operate more freely within sanctuary cities, contributing to the rise in drug-related overdoses.

Moreover, some sanctuary cities have been identified as regional hubs for drug distribution. For instance, Minneapolis has been described as a meth distribution hub, and cities like Lawrence, Massachusetts, are known for being fentanyl distribution centers. These cities have high rates of drug overdoses, which are often linked to the presence of drug cartels and criminal networks.

In summary, the higher rates of drug-related overdoses in sanctuary cities are attributed to the reduced ability of law enforcement to effectively combat drug trafficking due to limited cooperation with federal agencies and the presence of drug cartels and criminal networks.