Former RCMP proceeds of crime head warned bosses of weakened dirty money investigations
Ex-inspector believes loan shark investigation 'died on the vine' after police teams reorganized
The former head of the B.C. RCMP's Integrated Proceeds of Crime section says he feared Canada would be unable to meet international obligations when the force decided to disband its teams of money laundering specialists in 2013.
But Barry Baxter says the changes happened anyway — and he believes at least one investigation into suspected loan sharking "just died on the vine" as a result.
Those staffing decisions came under renewed scrutiny last week with the release of a portion of a report by former Mountie Peter German which revealed there are no federal RCMP officers specifically dedicated to combating money laundering in B.C.
Baxter noted that Canada has been a member of an international organization — called the Financial Action Task Force — since 1990. Originally established by the G7, its member countries commit to being proactive in financial investigations when pursuing money laundering and terrorist financing.
'Disappointed and alarmed'
Baxter, a former inspector with more than 20 years of experience in financial crime, retired four years ago.
He told CBC News he was "disappointed and alarmed" by the force's decision to merge the teams previously dedicated to fighting money laundering into one larger unit.
In 2013, the force created an umbrella group called Federal Serious and Organized Crime, comprised of border integrity, customs, drug squad, proceeds of crime and commercial crime investigators.
'Everybody became a jack of all trades'
"Everybody became a jack of all trades" he told CBC, noting that money laundering and proceeds of crime investigations require a lot of expertise. "It takes years to learn the nuances," he said.
The decision was in part due to budget cuts imposed by the former Conservative government, as well as a desire by then deputy RCMP commissioner Bob Paulsen to create the merger.
Back then, national security and terrorism was a big focus for the force noted Baxter.
He says he voiced his concerns to his superiors in Ottawa ahead of the move and pointed out the anti-money laundering teams received dedicated funds for their work.
'This is going ... to bite us'
Baxter said that after the meetings he and his counterparts would say to each other, "oh my God, this is going to come back to bite us."
Baxter said there were several investigations going on when his section was disbanded — and casinos were in their sights." We had massive amounts of $20 bills going through casinos — we were really looking at the volume."
Baxter said his group was actively surveilling suspected loan sharks operating at the River Rock casino. They would deliver bags of cash to people acting as "runners" in parking lots nearby.
The runners would then take grocery bags apparently containing cash into the casino where they would be delivered to high end gamblers. That suspected dirty money, ultimately, would be turned into legitimate casino cheques, once the gamblers cashed out.
'Died on the vine'
Baxter says he doesn't know for sure what happened to that investigation but he believes "it just died on the vine," once his group was disbanded.
Until the unit was dissolved, there were five officers plus support staff based in B.C., focused specifically on anti-money laundering work.
But he says it all came to a halt.
'Cutting the legs off'
Baxter said that until then, Canada had been an international leader in anti-money laundering.
"We were involved in auditing other countries' statutes ... and all that kind of stuff. And here we were cutting the legs off the thing." he said.
The anti-money laundering team formed a component of Baxter's proceeds of crime section. It was dedicated to enforcing the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which came into effect in 2000.
Earlier this month, RCMP Assistant Commissioner Kevin Hackett issued a statement in response to the German report on staffing and anti-money laundering. He wrote the force in B.C. currently has eight projects under investigation that involve money laundering.
Baxter spoke out to CBC in 2011 over his concerns about organized crime probing for ways to launder its money in B.C.'s casinos, telling the CBC that, to the common person, the avalanche of $20 bills flowing in "stinks."
At the time, the minister responsible for gaming in B.C., Rich Coleman, dismissed Baxter's concerns, saying he did not agree.