This article originally appeared in The Toronto Star 🇨🇦

Hot on the heels of my recent op-ed in the The Star, in which I voiced concerns over the possibility that Canada was becoming one of the preferred locations to launder criminal assets, another breaking story adds further gravitas to my warnings.

Quebec’s finance minister has recently ordered an external and independent audit of the province’s casinos, after news channel TVA’s investigative unit found Mafia leaders had received access to luxury perks through the Montreal Casino, including tickets to shows, meals and free hotel rooms.

Minister Eric Girard said he wants a deeper look into how the casinos operate, especially when it comes to loyalty programs. Casinos in the province are run by Loto-Quebec, a provincial Crown corporation.

The Quebec plan is to enlist the assistance of an independent auditor to go over casino records, to investigate potential money laundering and criminal activity. It will look into loyalty programs, to ensure they haven’t been rewarding those who receive cash from illegal activity.

One alleged Mafioso was listed among the top 10 players at the Montreal Casino in 2019, TVA claimed.

Loto-Quebec has denied any wrongdoing, insisting it is has strict regulatory procedures in place that meet with the province’s legal requirements, including anti-money laundering provisions.

If there is any substance to these allegations, then this is another blow to the Canadian regulatory community. It is now becoming apparent that those who are charged with protecting our country’s financial systems are fighting with one hand tied behind their backs.

Canada’s “snow washing” money laundering problem appears to be worse than I thought

Canada’s “snow washing” money laundering problem — the process of making a company as clean as the “driven snow in the Great White North,” often by laundering funds through Canadian real estate — appears to be worse than I first thought.

It is time for the government to address an issue that is damaging the international reputation of Canada. Make no mistake, until we have this problem under control, some overseas investors will shy away from capitalizing projects within our shores, ventures that we may lose to our international rivals.

Snow washing is clearly no longer an individual state issue, it is one that needs to be addressed by the Canadian government.

There is no substitute for hands-on experience. Anti-money laundering and counter-corruption investigators, steeped in the practicalities of preventing money laundering, should be called on to assist this process. I can’t help feeling that the federal government may be missing a trick by not consulting with them.

It may well be that if the government was to seek the opinion of those of us who are practicing in what is a highly specialized field, then the regulatory systems (that are clearly failing), like the laws, will become fit for purpose.

Martin Kenney is managing partner of Martin Kenney & Co., Solicitors, a specialist investigative and asset recovery practice located in the British Virgin Islands with a focus on multi-jurisdictional fraud and grand corruption cases.