Online gambling sites being used by money launderers: financial intelligence agency

It discloses the resulting intelligence about suspected cases to police and other law-enforcement agencies.

In preparing the new bulletin, Fintrac analyzed suspicious transaction reports related to online gambling between 2016 and 2023.

It also looked at data from other financial intelligence units, assessments from domestic and international organizations, and information from open sources to glean trends and patterns.

“Online gambling sites offer prospective money launderers opportunities to conceal the source of their funds by using multiple different deposit and withdrawal methods,” the bulletin says.

Fintrac found a common tactic was the purchase of prepaid cards or vouchers using suspected proceeds of crime. They were then used to deposit money into gambling accounts, followed by withdrawals through wire or e-transfer to a Canadian bank account under the guise of winnings.

Bank accounts also provided a means of placing and layering proceeds of crime through licensed and unlicensed online gambling sites, the bulletin says.

For instance, bank deposits that may be linked to crimes such as drug dealing and human trafficking were sometimes depleted using rapid and frequent online gambling purchases or transfers to payment service providers known for facilitating transactions at gambling sites.

“Other accounts appeared to exist mainly to facilitate money laundering through online gambling activity,” the bulletin says. “This included transactional activity that appeared circular in nature where funds were received and sent back to the same gambling sites multiple times.”

In one case, an organized crime group laundered crime proceeds by operating an unlicensed gambling site through the accounts of unrelated businesses, Fintrac says.

Although unlicensed gambling sites may not hold accounts at financial institutions in Canada, the companies and individuals that operate these sites have been observed sending funds to Canada-based accounts, the bulletin adds.

“Frequently, these gaming companies are located in jurisdictions that have weak anti-money laundering regimes, engage in highly secretive banking, and provide tax haven capabilities.”

Fintrac’s analysis helped the agency draft an extensive list of possible indicators of money laundering through online gambling sites.

For example, it urged institutions to watch for use of an account exclusively for online gambling, with no evidence of everyday banking activity.

It also advised them to be on the lookout for excessive transactions with one or more gambling sites that:

— are not provincially or federally authorized;

— do not require know-your-client information from users;

— do not publish details of their ownership or jurisdiction of registration;

— or that have no limits on volumes and values of bets.

This report by The Canadian Press was first published Jan. 18, 2024.

Jim Bronskill, The Canadian Press

by Canadian Press

Online gambling sites being used by money launderers: financial intelligence agency

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