I've been on a five-day motorcycle trip, and I flew in last night from San Francisco, so I have very rough notes. I'm going to be speaking mainly on the forensic accounting aspects.
My background is that I am an investigative and forensic accountant. I have been doing this for about 20 years in both the public and private sectors. I have worked with the OPP, occasionally with the Toronto Police Services, with the RCMP, as well as looking into municipal corruption--Project 80 in Ontario dealing with municipal politicians--and doing some work with the City of Vaughn and the City of Mississauga in relation to politicians. Nothing related to MPs.
One of my experiences was in relation to the Hells Angels and working with the OPP to look at the financial profile of two Hells Angels who eventually brought Hells Angels into doing the patching over in Ontario. It was looking at, from a forensic accounting perspective, what assets they had, what their income was, whether their income was legitimate or not, and whether you could work through the financial documentation to paint a financial profile of those members to assist in their trial.
That's partly what I am bringing to the group here, as well as working with CRA, looking at complex net worths and figuring out whether there is unreported income.
One of your objectives is dealing with organized crime and the financial aspects, and one of the things we do is assist police forces, as well as doing private investigations dealing with financial aspects.
On the job involving the two Hells Angels, the issue of tracking and identifying assets involved roughly about 300 search warrants. Our job then was to analyze the information coming in, identify other sources of potential assets, and work through that process. One of the issues is that cash and cash proceeds often don't go through financial institutions or don't get recorded.
You get mistakes leading to little bits of information. As an example, if an organized crime member or someone you are investigating stays in a hotel and pays cash, you are not going to find out about that unless they buy something from the mini bar and they forget and it goes on their credit card. We had a few cases where there were $6 charges at $300-a-night hotels, where the only cost going through was this $6 mini bar charge. If you actually go to the hotel, you might find several thousand dollars that has been paid in cash.
Once piece of it is, how do you track and identify cash transactions when you are already looking into a target that either the police have or it is part of a crime investigation, and how do you identify that information? Hotels are an example. In the case of the two persons we were looking into, home improvements were another example. If you look just generally at the underground economy, a lot of home improvement costs are paid for with cash, and when you get home improvements paid for with cash, it's hard to do a financial profile--if you have extensive cash expenses being used to improve roofs, put in pools, or do whatever the expense is.
One that's tougher is restaurant expenses. You can have some pretty expensive meals in restaurants. You can look at someone's profile and identify that they're not spending much on restaurants, but when you look at Statistics Canada information, on the average, say a two- or three-person family, it's giving you statistics for someone who's a normal, in the workforce person. Those stats don't necessarily have the same information as for someone who travels a lot, either with their organized crime connections or whatever they're doing. They're quite often eating in fancy restaurants, staying in hotels, and those things don't track to what a normal person would be spending money on.
So as far as suggestions are concerned, if you are actually trying to improve the tracking of finances, hotels don't have to do any reporting to FINTRAC. It's probably unreasonable to have the same reporting requirements, but it may make sense, if there is a lower cash limit for hotels, that they have to report the VISA information to FINTRAC. it's worth a thought.
It's the same for home improvements. If you have an objective of having to report cash payments, it has a potential impact on both the underground economy and on trying to track what people are actually spending money on, when you're doing a profile.
The other aspect is tracing and trying to identify what individuals own and what they're involved in. If you do a corporate search right now, for example, you can search by company name, but you can't do a search based on ownership. The ownership is not registered or is not publicly available. It's only the officers and directors. When you look at the interrelationship and ownership of companies, although nominees may be there for some of the companies, it would be very helpful to be able to search by the address, as well as the names of the officers and directors. You can't do that provincially and federally right now. It's very difficult when you try to do a profile on who owns what and what they're involved in.
The other piece is on the use of nominees. It makes sense from one perspective, for example, if you're buying a property and you're a real estate developer. It might increase the price of the property if they know who is interested. I don't believe you need nominee companies forever. If there was a limit on how long you can have nominees, and you have to report the owners of companies and not only the officers and directors, I think it would be very helpful when trying to get a picture of the overall involvement of persons under investigation and their finances.
I'll stop now and keep it under 10 minutes. I'll respond to questions as required.