Types of financial crime

Proceeds of crime

When an investigation into proceeds of crime occurs, it focuses on organized crime groups' illegal financial gains. An investigation will track the flow of money and the acquisition of assets to determine if the goods are gained from illegal activities.

Proceeds of crime might include:

cash
cryptocurrency
properties
vehicles
buildings
boats
bank accounts

Proceeds of crime vs. offence-related property

Proceeds of crime are the financial gains resulting from committing a crime.

Offence-related property is any property, within or outside Canada, that is:

involved in the commission of an indictable offence
used in any manner in connection with the commission of such an offence
intended to be used for committing an offence

Money laundering

Organized crime groups use money laundering to disguise their profits made from crimes. Money laundering:

converts proceeds of crime into a less suspicious form
conceals the criminal origins and ownership of funds
creates a legitimate explanation for the source of the funds

Organized crime groups try to disguise the money by spending it in ways that make it hard for police to detect.

Common businesses used for money laundering include:

casinos
banks
law firms
money service businesses/currency exchanges
real estate agencies
car dealerships
jewellers

Both proceeds of crime and money laundering can have negative economic and social consequences, whether strengthening organized crime groups or funding terrorist activity nationally and internationally.

Serious fraud

Serious fraud are fraud cases of provincial, national or international significance, in which one or more of the following elements are present:

Substantial value and/or financial losses
Substantial impact on victims
High degree of criminal sophistication
Requirement for special investigative expertise
Municipal, provincial, or federal government are victims
It is in the public or national interest to pursue an investigation

Examples are:

Corporate fraud
Investment fraud
Securities fraud
Mass marketing fraud
Credit fraud

The impacts of serious fraud include:

economic decline/destabilization of global economies
threats to the integrity of financial institutions
destabilisation of democratic processes (for example election rigging)
financial burden on victims
emotional and psychological burdens on victims

Capital market fraud

Capital market fraud entails investment and securities fraud, also known as stock market fraud. Together, they encompass a variety of illegal activities and strategies.

Examples of capital market fraud include:

Insider trading: Illegal insider trading occurs when privileged, non-public information is used to buy or sell a security.
Market manipulation: Involves efforts to artificially increase or decrease a company's share price. Examples include: pump and dump schemes, high closing activities and volume manipulation.
Pump and dumps: The fraudulent practice of encouraging investors to buy shares in a company in order to artificially inflate the price, and then selling one's own shares while the price is high.
Illegal distribution: A sale of securities to investors that does not comply with securities law trading and disclosure requirements.
False prospectus: When a corporation presents a false or distorted prospectus. A prospectus is one of the means by which the public is informed of the soundness of a corporation's venture.

The impacts of capital market fraud include:

negative market reaction
the collapse of companies/financial institutions
financial burden on victims
costs involved in conducting an investigation

Canadian sanctions enforcement

The imposition of sanctions against foreign states and non-state actors is a key tool for the international community to support peace and security and enforce international norms and laws.

Canada enacted legislation authorizing the imposition of sanctions through the:

Sanctions compliance

Sanctions must be respected by all persons located in Canada and all Canadian persons (both individuals and entities) located or engaged in activities abroad.

Contravening sanctions is criminal

Wilfully contravening or failing to comply with Canadian sanctions regulation constitutes a criminal offence.

Offences are investigated and enforced by the Canadian Border Services Agency (CBSA) and the RCMP.

Under the United Nations Act, the maximum penalty on summary conviction is a $100,000 fine or a 1-year prison term, or both. Convictions on indictment may result in a maximum 10-year prison term.

Under the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act, the maximum penalty on summary conviction is a $25,000 fine or a 1-year prison term, or both. Conviction on indictment may result in a maximum 5-year prison term.

Disclosure and reporting requirements

Canadian sanctions legislation requires persons in Canada and Canadians outside Canada to disclose and report certain properties and transactions to the RCMP, specifically in relation to provisions that freeze the financial assets of targeted individuals and entities.

Reporting entities under the Proceeds of Crime Money Laundering and Terrorist Financing Act (PCMLTFA) are required to report to Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as soon as practicable once they establish there are reasonable grounds to suspect a transaction or attempted transaction is related to the commission of a sanctions evasion offence. Every person or entity that fails to report is guilty of an offence and liable on summary conviction to a fine of not more than $1,000,000.00, as per S. 77(1) of the Proceeds of Crime Money Laundering and Terrorist Financing Act.

Reports can be submitted to FINTRAC via their Voluntary Information Report webpage.

Statistics collected by the RCMP on sanctions related frozen assets

One of the RCMP's roles under Sanctions legislation is to collect reported information on assets owned or controlled by a designated person or entity.

For the most recent figures available, please visit our Reporting of Frozen Assets Under the Special Economic Measures Act page.

Enforcement role of the RCMP

While the Minister of Foreign Affairs is responsible for the administration and enforcement of Canada's sanctions regime, the RCMP's plays a role in enforcing sanctions as part of a whole-of-government approach, that consists of:

Conducting criminal investigations and enforcing violations.
Acting as the main point of contact to receive and maintain information relating to disclosure and reporting requirements.
Assisting Global Affairs Canada with outreach and training activities, intelligence products, and providing support with asset confiscation.

How to report offences, property and transactions to the RCMP

To report sanctions violations to the RCMP, or to disclose and report property and transactions related to targeted individuals and entities, please contact:

Mail address: RCMP Federal Policing Intake
73 Leikin Dr.
Ottawa ON K1A 0R2
Fax: 613-825-7030

For further information on Canada's Sanctions Regime, refer to Global Affairs Canada or for inquiries, contact sanctions@international.gc.ca.

Help us combat financial crime

For information on how to report, please visit the Combatting financial crime webpage.

Date modified:: 2025-01-16

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Royal Canadian Mounted Police