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Financial Crime
Numerous criminal groups across Canada are involved in a wide range of financial frauds. In many cases, these criminal groups operate across jurisdictions (within Canada or internationally) in order to access more victims and lessen the chances of detection.
According to a November 2005 Ipsos-Reid study, 77% of Canadians are very or somewhat concerned about becoming a victim of identity theft, and 65% of Canadians have experienced some form of identity theft or attempted identity theft. This includes phishing attempts (24%), fraudulent use of credit cards (15%), stolen credit cards (12%), and people who have been victims of phishing (14%). |
Criminal groups continue to target Canadians’ personal and financial information. Methods of obtaining this data range from mail or garbage theft to more sophisticated means such as modifying point-of-sale terminals (where payment cards are swiped to pay for goods), compromising corporate databases or through black market websites that sell stolen data.
Several criminal groups are involved in cross-jurisdictional telemarketing fraud that can extend internationally. Because this type of mass marketing fraud is designed to reach a wide population and often targets vulnerable members of society, it has a high probability of affecting Canadians.
Organized crime is an invisible killer. It undermines and destroys the very fabric of our communities and, in most cases, you do not see it coming until a crisis occurs. Chief Frank A. Beazley, |
Furthermore, Canadian-based criminal groups continue to pose a significant financial threat to the U.S. public, as a sizeable component of fraudulent telemarketing in the U.S. originates from Canada.
Payment card fraud, in which a single crime group can victimize hundreds of people, remains a serious financial threat in Canada. According to the Canadian Bankers Association, credit card fraud in Canada resulted in losses of $201 million to major credit card companies in 2005. The majority of credit card losses (77%) are derived from counterfeit cards and stolen credit cards used to make fraudulent purchases through the Internet, mail order or by telephone. In the same year, debit card fraud from skimming resulted in losses of $70.4 million.
Mortgage fraud is the deliberate use of misstatements, misrepresentations or omissions to fund, purchase or secure a loan. |
Some criminal groups concentrate solely on mortgage frauds, while others are simultaneously involved in multiple criminal markets or use mortgage frauds to facilitate other criminal activities, such as marihuana grow operations. Crime groups generally undertake multiple fraudulent mortgages simultaneously, ranging from several dozen to hundreds per group, with losses often numbering in the tens of millions of dollars. Given this level of financial harm and the numerous mortgage fraud cases nationally, mortgage fraud will remain a significant economic threat to financial institutions.
Commonly observed securities frauds in Canada are illicit offshore investments, fraudulent high-yield investments such as Ponzi (pyramid) schemes, and illegal market manipulation. Many securities fraud schemes are national or transnational in scope, potentially targeting thousands of investors from multiple countries. The stock market is highly attractive to organized crime as it can be used to launder money and conduct illicit market manipulation.
