Poetic justice: using proceeds of crime to fight crime

Desmond Devoy

December 14, 2012

Crime does pay, but seldom for long.

But when you’re in jail, you can’t take it with you. 

And when the criminals do get caught, the money ends up in the government’s pocket.

OPP Det. Cst. Liam Watkins of the asset forfeiture unit, has seen poetic justice for himself, when the ill-gotten gains of criminals get seized by law enforcement – and even used by law enforcement themselves to fight crime.

This past summer, he flew to Los Angeles to take part in a Drug Enforcement Agency investigation. He was picked up at the airport by a brother officer in a fancy Mercedes-Benz with spinning rims.

“How on earth did you afford that, on your budget?” Watkins asked.

“Oh, we didn’t buy it,” the American officer replied. “It was seized in New Jersey and it was shipped here, where it wouldn’t be recognized,” and reused for good by law enforcement.

Back in Canada, the proceeds of crime still help the law-abiding, but in good Canadian fashion, tend to go to less ostentatious good causes. A recent case saw to it that $35,000 in criminal assets was donated to the Perth and Smiths Falls District Hospital, on the consent of the defence counsel in the case.

“So, not all defence attorneys are bad guys,” Watkins joked.

Watkins was speaking at the Lanark County police services board association’s quarterly meeting at the Carleton Place arena on Wednesday, Dec. 5 about property seizure and how criminal assets are handled, and the quick legal improvisation that has to be done to catch the bad guys.

During one investigation in 2011, Watkins and his officers identified what they believed to be a stash house in the east end of Ottawa.

“People would come in with an empty bag and come out with a full bag,” and vice versa, he said. “In our minds, he was dealing drugs.”

On take-down day, however, as police officers swarmed over the house, they found exactly zero drugs on the property – but did find a bag with $45,000 in cash, specifically, $20 and $50 bills.

“I had nothing to charge him with,” said Watkins.

Nothing illegal about the bag – until they took a closer look.

“The bag itself was laced with cocaine,” said Watkins.  

That sealed the deal in connecting the money to the possession of cocaine.

As the justice system wheels along, a provincial agency, the Seized Property Management Directorate, looks after seized property and money until the legal issues are sorted out. But clever criminals often have extra money stashed away for a rainy day. Here, the police can resort to civil, not criminal, courts to get at that money.

“In civil court, it’s balance of probability,” said Watkins. In criminal court, however, it’s harder to secure a conviction, or get to the money, because “I didn’t see them do it and they didn’t admit to doing it.”

Using forensic accounting, the police can report how much money they believe a criminal has stashed away, beyond what he has declared he has access to.

“Of course, it’s never the amount we want,” once a judgment is rendered, “but we take what we can get,” said Watkins.

Sometimes, even defining just what the proceeds of crime are can be hard to pin down. About $1,000 derived from selling drugs is, clearly, proceeds of crime derived from criminal activity. But what if that money is then used to buy a stereo system?

“That stereo system would then be considered the proceeds of crime,” said Watkins.

Watkins pointed out that criminals are, like many people, motivated by money, but unlike most people, who work hard and play by the rules, criminals use devious methods to get their money.

“You wouldn’t really do it (crime) for entertainment,” said Watkins. “They do it for the money. (But) it’s very dangerous.”

MONEY LAUNDERING

Criminals also use money laundering as a way of “cleaning” their ill-gotten gains.

Watkins once listened in to an intercepted, wiretapped telephone conversation between a criminal and, of all people, his mother, as the criminal talked about how he was trying to clean some money.

“You can’t just walk into a bank with $100,000 cash,” the criminal said.

“If you walk in with $100,000 in cash, all sorts of bells and whistles would go off,” said Watkins, finding himself in odd agreement with the criminal, for once. “They want to break that up in to smaller amounts. They are able to muddy the trail of that $100,000.”

Even the police know how hard it can be to deposit money.

“We will get phone calls from bank managers when we show up with large sums to deposit, and we have shown up in full uniform,” said OPP Sgt. Rob Croth.

One method that criminals use to launder money is using no-name automatic teller machines (ATM).

“In my opinion, oftentimes, those ATM machines are the tools of money launderers,” said Croth, referring to “white label,” no name ATMS not affiliated with the major banks.

“Not all of them, mind you,” he hastened to add.

Criminals also use shell companies to launder their money, and profits can be used to conduct legitimate business or reinvest in other criminal activities.