Organized Crime in Canada - Backgrounder

Introduction

Organized criminal activity in Canada is a multi-faceted problem that requires a broad-based, integrated approach by the country's law enforcement agencies. Organized crime poses a significant threat to public safety and negatively affects the daily lives of Canadians.Footnote 1 Tied to illegal activities such as drug trafficking, prostitution, theft and human trafficking, organized crime groups have a violent and corrupting effect on the communities and cities where they operate. The overall impact of organized crime groups in Canada, however, extends beyond the immediate threat of these and other unlawful activities to include significant financial implications due to greater costs for law enforcement and the justice and correctional systems (translating into higher taxes), or expenses such as higher insurance premiums and banking fees. It also undermines the individual health and safety of Canadians through, for example, the manufacturing and distribution of fraudulent pharmaceuticals or unsafe construction practices due to corruption and collusion.

Organized crime is a burden on Canadian society and undermines the fundamental rights of people to safety and security.  Many criminal organizations operate throughout Canada and across international boundaries, have significant resources and constantly evolve to adapt and exploit new opportunities. These characteristics make fighting organized crime particularly challenging, and underscores the necessity for information and intelligence sharing among law enforcement agencies and those responsible for public safety.

Combatting Organized Crime

The response by Canadian law enforcement to these challenges is guided by the Canadian Law Enforcement Strategy on Organized Crime (the Strategy). Adopted by senior police officials across Canada in 2011, the Strategy reflects a national collaborative effort of intelligence and operations to detect, reduce, and prevent organized and serious crime.

The intelligence component of the Strategy is represented by Criminal Intelligence Service Canada (CISC). Originally established in 1970 as part of a Canada-wide initiative to address the rising prevalence of organized crime, CISC's membership is comprised of nearly 400 law enforcement agencies and administered under the stewardship of the Royal Canadian Mounted Police (RCMP). CISC's fundamental purpose is to facilitate the timely production and exchange of criminal intelligence information within the Canadian law enforcement community, and to provide leadership and expertise to its member agencies. It works in collaboration with its provincial bureaus and a network of subject matter experts within other intelligence agencies, government departments, private sector agencies and academia to provide accurate and comprehensive analyses of current and future criminal developments.

The operational and tactical component of the Strategy is represented by the Canadian Integrated Response to Organized Crime (CIROC). Formalized in 2007, CIROC is a national body of senior police executives charged with operationalizing the intelligence produced by CISC and leading the coordination at a national enforcement response to disrupt and dismantle organized crime.

The National Executive Committee (NEC) is the overall governance mechanism for CISC and CIROC, and is comprised of senior officials from 25 law enforcement agencies across the country. The NEC meets regularly to provide strategic and operational direction to the Canadian law enforcement community on the issue of serious and organized crime. The core function of the NEC is to provide CISC and CIROC with the leadership, advice, guidance and support necessary for the development, implementation and sustainability of the Strategy.

The August 2014 meeting of the NEC presented an overview of the landscape of organized crime in Canada and collaborative efforts undertaken in the past year. Key discussion item included:

Organized Crime Trends

In 2013, 672 organized crime groups were reported in Canada, many of them concentrated in major metropolitan areas for reasons of anonymity and ease of access to markets and ports. Organized crime poses a serious long-term threat to Canada's institutions, society, economy, and to individual quality of life. Exploiting opportunities across the country, organized crime groups create sophisticated trans-national networks that facilitate criminal activities and challenge law enforcement efforts. Illegal activities such as drug trafficking, cybercrime and financial crime form the main activities of organized crime groups in Canada. These areas of organized crime, in addition to select operational case studies, are shown below to demonstrate the Strategy in action and to highlight the cooperative efforts of Canada's law enforcement community in combating organized crime.

Nationally Coordinated Efforts

In March 2011, police investigations into the escalation of gang violence in British Columbia revealed numerous inter-provincial organized crime linkages. CISC helped to analyze and define the problem, which led CIROC to identify this issue as a national tactical priority. CIROC played a key role in the implementation of a multifaceted, multi-jurisdictional investigational strategy across Canada, which has led to over 137 arrests and the seizure of 376kg of cocaine, 1000 litres of GHB ('date rape drug'), 379 firearms, over 400kg of explosives and $4M in currency. CIROC continues to work with CISC to identify similar police operations that would benefit from the same national and coordinated approach.

Drug Trafficking

The majority of organized crime groups in Canada are involved in drug trafficking due to the high revenue of Canada's import and export drug market. Canada's black market is currently valued at approximately $77.83 billion, with drug trafficking accounting for approximately 57% ($44.5 billion).Footnote 2

Canadian-based crime groups continue to import illicit drugs from the United States, Mexico, China, India and several South American, Middle Eastern and Southeast Asian Countries. Drugs exported from Canada, such as marijuana, are targeted mostly at the United States, Australia and Japan.

Cocaine is Canada's most prominent illicit drug market, and is imported via nearly every mode of transportation. Recent trends have shown an increase in drug cartels operating in Canada, seeking to establish direct cocaine supplies rather than third party distribution. Law enforcement cooperation with international partners is necessary to disrupt cartel networks, as is alternative targeted drug enforcement initiatives to respond to the expanding threat in Canada.

Project LOQUACE

A Sûreté du Québec-led investigation into a Quebec-based organized crime network focused on illicit drug importation and distribution throughout the province.  CISC's national network advanced the investigative strategy that targeted a trafficking network with both national and international links. Project Loquace concluded in late 2012 and resulted in over 299 charges against 90 people, the seizure of significant quantities of currency (approximately $1.5 million), illicit drugs (219 kg of cocaine, 1,111 litres of GHB/GBL and 62 kg of cannabis and hashish), firearms (157) and explosives (over 400 kg), drug manufacturing equipment and facilities.

Cybercrime

The Internet and related technologies have created new opportunities, new markets and new delivery methods for criminal transactions. For drugs, contrabands and other types of criminal trafficking, these technologies have created a virtual storefront presence where organized crime groups and criminal networks can efficiently and anonymously buy, sell and exchange criminal products and services on an unprecedented scale. Globalization and rapid advances in technology have contributed to the expansion of organized crime activities. Canadians can easily fall victim to organized crime groups operating outside of Canada (identity theft, internet, e-mail scams, phishing, etc.), creating a global problem that cannot be fought solely within Canadian borders.

Project ORIVER

In 2012, the RCMP and Combined Forces Special Enforcement Unit partners discovered an organized crime group that was suspected of using an off-shore gambling website, Platinum Sports Book.com, to launder proceeds of crime generated in Canada and make money through illegal gambling. Over a year-long operation, the RCMP connected Canada-based activity with the gambling website. The website was host to thousands of gamblers whose wagers allegedly resulted in millions of dollars in profit for organized crime.

The operation resulted in a takedown and dismantling of the gaming enterprise in 2013, in which over 30 individuals were arrested and charged with numerous gaming offences (e.g. participating in or contributing to an activity of a criminal organization, keeping a common betting house, and conspiracy), and the seizure of more than $3 million.

Cybercrime is difficult to measure and often goes unreported to law enforcement agencies; however, statistics suggest that cybercrime continues to grow in Canada. In 2012, the RCMP received nearly 4,000 reported incidents of cybercrime: an increase of over 800 reported incidents from 2011.  Other statistics also indicate a rising prevalence of cybercrime in Canada. According to the 2013 Norton Report released by U.S.-based software security maker Symantec Corp., an estimated 7 million people in Canada were victims of cybercrime between October 2012 and 2013, raising the overall cost of cybercrime to Canadians from $1.4 billion to approximately $3 billion.Footnote 3 The rise in financially-motivated cybercrimes, which includes everything from unauthorized computer access to online identity theft and many other criminal offences, has been linked to increased use of mobile devices and open Wi-Fi networks. Notably, in 2013, the Canadian Anti-Fraud Centre (CAFC) received over 16,000 complaints of cyber-related fraud (email and website scams), accounting for more than $29 million in reported losses. Additionally, the Internet has expanded the scope and reach of other crimes, such as human trafficking, which allows organized crime groups to further benefit from the relative anonymity of the Internet, and expand the scope and magnitude of many long-standing organized crime activities.

Financial Crime

Financial crimes committed by organized crime groups, such as credit and debit card fraud, costs Canadians an estimated $5 billion every year (or $600 a year for a family of four). According to CISC, all organized crime groups operating in Canada participate in some form of financial crime. Using the Internet and online currency schemes, criminal money transfers originating from Canada can be electronically routed through foreign jurisdictions with weaker safeguards to more effectively conceal illicit proceeds and simplify offshore banking. Money launderers also collude and exploit legitimate online services, such as auctions or online gambling, to hide criminal proceeds by buying and selling fictitious items or by masking such proceeds as legitimate gambling profits.

Project ORAJA

In 2012, an investigation was initiated as a result of information received from a pilot project headed by the Canadian Bankers Association (CBA). The investigation targeted a multi-faceted Eastern European Criminal Organization committing financial crime and human trafficking in order to fund their criminal organization. Intelligence collected through the law enforcement community defined the scope of this network and its key players, and revealed that millions were reportedly lost through fraudulent social assistance payments, stolen cheques, and bank related frauds. A November 2013 joint operation resulted in the execution of multiple search warrants and three arrests. The accused were charged with fraud over $5000, possession of identity information, and possession of property obtained by crime. The involvement of CISC and CIROC demonstrated that the intelligence community's ability to network with public and private sector organizations can facilitate operational effectiveness.

Organized crime groups also operate in the capital markets using both legitimate and fraudulent investment schemes to launder the proceeds of crime. Legitimate investment ventures such as the stock market are frequently targeted by organized crime groups because they can be used to launder money and conduct illicit market manipulation. Fraudulent investment ventures such as Ponzi schemes are particularly harmful to individual finances, as most money is never returned to the victims. Current trends suggest that payment fraud and associated supporting crimes, such as identity theft, mail theft and large-scale hacking of corporate websites in search of cardholder data, will likely increase to meet expanding criminal demand and vulnerabilities created through technological connectivity.

Way Forward: Cooperative Action and Intelligence Sharing

As the world becomes more interconnected, organized crime groups continue to expand internationally, seeking more direct access to lucrative foreign and criminal markets. Combatting organized crime that transcends jurisdictional boundaries poses significant challenges for law enforcement. At the same time, technology continues to evolve, enabling organized crime to engage in traditional criminal activities in innovative ways and exploit new opportunities. Similar to legitimate businesses, organized crime groups rely on cell phones, instant messaging, GPS, electronic data and money transfers to facilitate their illicit work. Keeping pace with the technological skills and resources necessary to fight organized crime in the digital era requires new policing measures that place emphasis on cooperative action and intelligence sharing.

To keep pace with the transnational nature of organized crime in Canada, law enforcement and government agencies have developed and continue to refine collaborative approaches to dealing with those individuals or groups who engage in serious and organized crime. This sharing of information and resources is used in support of integrated policing, law enforcement plans and strategies, and assists the police in communicating the impact and scope of organized crime. The sharing of intelligence also improves law enforcement coordination and deconfliction measures in organized crime-related investigations, and helps to ensure that linked investigations are identified at the onset. These efforts require the development of law enforcement strategies and programs that address the international components of organized crime.

The analytic, investigative and operational collaboration between CISC and CIROC enables Canada's law enforcement community to develop strategies and operationally relevant actions to reduce the threat and impact of organized crime in Canada.

Date modified: