Fraud is alive and well in Canada. It is thriving and fraudsters are innovating. This boom in white-collar crime is partly the result of Canada’s lack of a uniform regulatory system and ineffective law enforcement.
On September 22, the U.S. Treasury’s Office of Foreign Affairs Assets Control (OFAC) designated Vancouver-based company PacNet Group a significant transnational criminal organization. PacNet is an international payments processor and money services business, with a history of money laundering. OFAC issued a press release, stating that PacNet knowingly processes payments on behalf of a wide range of mail fraud schemes that target victims in various countries across the globe, and it is the third-party payment processor of choice for a breadth of mail fraud ploys. These allegations shine lights on how these types of fraudulent activities can flourish under Canada’s current legal landscape.
Canada’s lack of cohesive regulation is particularly problematic surrounding the collection of beneficial ownership information on registered companies.
According to information provided by the British Columbia government, between 2006 and 2015, 304,859 companies were incorporated through BC’s Ministry of Technology, Innovation and Citizen’s Services. Federal incorporations are also on the rise.
Canada has 2.6 million corporations, with an overwhelming majority being incorporated provincially. The formation of companies is an industry onto itself, with Canada allowing a high degree of anonymity about registrants. A report issued by the Financial Action Task Force warned: