Canada’s financial intelligence unit says it’s seeing a rise in transactions linked to extortion, and it is alerting law enforcement to the rising threat to Canadian businesses.
The Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) said Thursday that it made 100 disclosures of actionable financial intelligence relating to extortion to law enforcement since the start of the year – more than during the past two years combined.
FinTRAC said that those 100 disclosures involved in excess of 300 people and more than 63,000 financial transactions. A single disclosure from FinTRAC to a law enforcement agency can include many related financial transactions. And the unit published new guidance intended to help businesses identify and report transactions that are tied to extortion.
FinTRAC’s special bulletin focuses on financial activities linked to extortion and violence targeted at Canada’s South Asian diaspora, which the agency says is being perpetrated by transnational organized crime groups. The extortion often starts as demands for money made through anonymous telephone calls or messages on encrypted chat apps, and it escalates to gunfire at victims’ storefronts or homes, and even arson when the demands are not met.
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The federal government has vowed to crack down on extortion, including by partnering with financial institutions and police forces to boost the sharing of information relating to the crime.
“Extortion is a rising threat to the safety of Canadians, impacting more and more families and businesses,” Finance Minister François-Philippe Champagne said in a statement Thursday.
“To detect, disrupt and defeat the networks behind these crimes, we launched a follow-the-money strategy that mobilizes federal resources, local police and the private sector,” he added.
Mayors of some Canadian cities, including Brampton, Ont., and Surrey, B.C., have called for the recent surge of attempted extortions, shootings and arsons targeting South Asian business owners to be declared a national emergency. Surrey police received reports of 133 extortion threats last year, and the city’s police chief has described the situation as an "unprecedented extortion crisis."
Authorities have launched hundreds of extortion investigations across Brampton, Mississauga and Caledon, Ont., in the past two years, according to FinTRAC.
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Victims are often owners of small to medium-sized businesses in sectors such as retail, construction, hospitality, construction and real estate, the anti-money-laundering watchdog said.
People demanding money sometimes identify themselves as members of the Bishnoi Gang, a violent organized-crime group based in India that the federal government has designated as a terrorist organization, according to FinTRAC. Ottawa has said the group is responsible for murders, shootings and extortion and is active in parts of Canada with significant diaspora communities.
“They create a climate of insecurity in these communities by targeting them, their prominent community members, businesses and cultural figures,” the federal government said last year as it issued the terrorism designation.
FinTRAC’s analysis suggests that the Bambiha Gang, a rival to the Bishnoi syndicate, is also involved in extortion activities in Canada.
These organizations typically recruit people who already live in Canada – often vulnerable young men from India on study permits – to serve as financial intermediaries, according to FinTRAC. Known as money mules, these are individuals who move illegally-acquired funds on behalf of someone else.
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Canada’s anti-money-laundering laws require entities such as financial institutions, real estate and mortgage brokers, and cryptocurrency exchanges to report certain types of transactions to FinTRAC. The centre then analyzes the information and discloses financial intelligence to law-enforcement agencies.
FinTRAC’s bulletin lists factors that can help businesses identify transactions that might be linked to extortion. For instance, a business owner may make a large cash withdrawal or send a large wire transfer that’s inconsistent with their past transactions.
Although extortion demands are typically in the range of hundreds of thousands to several million dollars, FinTRAC’s analysis suggests that victims likely negotiate to reduce those demands, or pay smaller amounts over a period of time through a sort of payment plan.
Sarah Paquet, director and chief executive officer of FinTRAC, said in a statement that the agency is committed to supporting the government’s efforts to combat the “insidious crime” of extortion.
“By following the money and leveraging the power of financial intelligence, we can effectively target, disrupt and dismantle the organized criminal networks that profit from this illicit activity and threaten the safety of Canadians,” Ms. Paquet added.