Money Laundering and the Canadian Jewellery Industry

The RCMP has developed an initiative against money laundering. In 2003 the Proceeds of Crime Branch published an informative booklet to help educate the small business community with regard to the money laundering problem in Canada and how to avoid becoming part of this criminal process. To receive a copy, please contact JVC at 1-800-636-9536.

Money laundering stems from the need for organized criminals to make the inordinate amounts of cash generated from illegal activity appear legitimate. There are a number of money laundering methods including:

· Smurfing
· Bank complicity
· Currency exchanges
· Securities brokers
· Asset purchases with bulk cash
· Telegraphic transfer of funds
· Postal money orders
· Travel agencies
· Credit cards
· Gambling
· Refining (changing small bills into large)
· Legitimate Business/commingling of funds
· Reverse flip
· Loan back

"Wilful Blindness"

Wilful blindness occurs when someone is aware of a situation that should be investigated by law enforcement but they do not act. If you suspect money laundering, REPORT IT! You will be protected under Section 462.47 of the Canadian Criminal Code from any civil or criminal liability even if your suspicions prove wrong.

What the RCMP Need From You!

You may be asked to provide specific information when reporting a suspicious transaction, such as:

1. Name, age, address, telephone number, description of the person(s) involved in the suspicious transaction and their associates.

2. The type of activity associated with the suspicious transaction, i.e., payment made by an unusually large volume of cash, use of nominees, currency exchange, smurfing, refining, reverse flip, loanback, etc.

3. The amount of the suspicious transaction.

4. Descriptions of the individuals and the date, time and location of the transaction.

5. Any bank or credit card information or other personal information about the subject that might be available.

6. Description of vehicle and license plate number associated with suspicious transaction/activity.

7. The circumstances, details and events that aroused your suspicion.

Remember, if you suspect money laundering, REPORT IT!

The following is a list of RCMP Proceeds of Crime offices across Canada

Alberta

RCMP Proceeds of Crime
920 16th Avenue
Calgary, Alberta
T2E 1K9
Fax: 403-230-6439
Phone: 403-230-6545

RCMP Proceeds of Crime
11140 - 109 Street
Edmonton, Alberta
T5G 2T4
Fax: 780-412-5169
Phone: 780-412-5175

British Columbia

RCMP Proceeds of Crime
5255 Heather Street
Vancouver, B.C.
V5Z 1K6
Fax: 604-264-3357
Phone: 604-264-3261

Manitoba

RCMP Proceeds of Crime
P.O. Box 5650
Winnipeg, Manitoba
R3C 3K2
Fax: 204-984-1191
Phone: 204-984-1190

Newfoundland

RCMP Proceeds of Crime
P.O. Box 9700, East White Hills road
St. John's, Newfoundland
A1A 3T5
Fax: 709-772-6616
Phone: 709-772-7241

New Brunswick

RCMP Proceeds of Crime
1445 Regent Street
Fredericton, New Brunswick
E3B 4Z8
Fax: 506-452-3910
Phone: 506-452-3743

Nova Scotia

RCMP Proceeds of Crime
6080 Young Street, Suite 400
Halifax, N.S.
B3K 5L2
Fax: 902-426-7044
Phone: 902-426-1653

Ontario

RCMP Proceeds of Crime
1000 Gardiners Road, 2nd Floor
Kingston, Ontario
K7P 3C4
Fax: 613-384-3255
Phone: 613-384-2750

RCMP Proceeds of Crime
P.O. Box 3240, Station B
London, Ontario
N6A 4K3
Fax: 519-645-3864
Phone: 519-645-3863 Ex. 261

RCMP Proceeds of Crime
345 Harry Walker Parkway
Newmarket, Ontario
L3Y 8P6
Fax: 905-953-7532
Phone: 905-953-7537

RCMP Proceeds of Crime
1200 Vanier Prkway, Room H534
Ottawa, Ontario
K1A 0R2
Fax: 613-993-7711
Phone: 613-998-6065

RCMP Proceeds of Crime
155 McArthur Avenue, Room 340
Ottawa, Ontario
K1A 0R4
Fax: 613-993-4888
Phone: 613-993-1816

RCMP Proceeds of Crime
P.O. Box 220
St. Davids, Ontario
L0S 1P0

Prince Edward Island

RCMP Proceeds of Crime
P.O. Box 1360
Charlottetown, P.E.I.
C1A 7N1
Fax: 902-568-7426
Phone: 902-626-2696

Quebec

RCMP Proceeds of Crime
4236 Bourque Boulevard
Rock Forest, Quebec
J1N 1W7
Fax: 819-564-4233
Phone: 819-564-5770

RCMP Proceeds of Crime
925 9th Street
Sainte-Foy, Quebec
G2G 2S5
Fax: 418-648-4139
Phone: 418-648-4190

RCMP Proceeds of Crime
4225 Drochester Boulevard West
Westmount, Quebec
H3Z 1V5
Fax: 514-939-8632
Phone: 514-939-8636

Saskatchewan

RCMP Proceeds of Crime
Bag Service 2500
Regina, Sask.
S4T 1E1
Fax: 306-780-8196
Phone: 306-780-6215

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Police Gang Up on

Telemarketing Fraud
By Katherine Aldred

The following article is reprinted from the Gazette, Volume 66, No. 3, 2004, pg.16. The article is reproduced with the permission of the Minister of Public Works and Government Services Canada 2004.

They call it El Gordo or "the big one", but Spain's December lottery isn't just big, it's popular. Every year, millions of people worldwide will purchase tickets for El Gordo in the hopes of wining the multimillion dollar prize.

Now consider what happens when someone familiar with the lottery receives a telephone call announcing that they have won. The lottery "official" explains that the money is all theirs just as soon as they pay the requisite taxes and a small administration fee. The ecstatic winner complies.

Sadly, this example of a real-life telemarketing scam in which hundreds of people, including Canadians, were taken in.

Whether it's a bogus lottery, an advanced-fee scheme, identity theft or an online auction scam, people do take the bait and send in money or give up vital personal information.

The RCMP and its policing partners are now making it easier for victims to report these crimes and for investigators to pursue their cases.

Joining Forces Against Fraud

In 2001, the RCMP teamed up with the Ontario Provincial Police (OPP) to open the PhoneBusters National Call Centre (PNCC). PNCC takes calls from victims of telemarketing fraud, identity theft and West African letter scams that have a Canadian connection. Since opening, the centre has logged more than 240,000 calls.

The Phonebusters hotline began in 1993 as a province-wide service run by the OPP. The hotline successfully pushed out much of the telemarketing fraud in that province, but the scams started appearing in other areas of the country and abroad.

"Any good fraudster will go to where the money is," says S/Sgt. Lou Morissette, who's in charge of major fraud and ID theft at the RCMP. "We have seen boiler-room operations shift from province to province, to the U.S. and the U.K. Criminals are very good at shifting gears and leap frogging around the world.

The information collected by PNCC is collected and distributed to the appropriate investigating officers, whether they work for a small municipal police department, a provincial police force or a national police force or regulatory agency in a foreign country.

Canada is renowned as a base camp for international telemarketing fraud. Every year, American citizens in particular are targeted by scam artists who convince them to part with their money.

Online Crime Reporting

The RCMP recently launched an online system for reporting economic crime based in Canada. In its first month, Reporting Economic Crime On-line, or RECOL, received more than 300 complaints of fraud, including identity theft, advanced-fee schemes, investment fraud and fake online auctions.

RECOL allows victims to immediately lodge a complaint online by logging on with a user name and password. They choose a list of 10 crime types, fill out the form and select who should receive the information, such as the police, government departments, banks and credit card companies.

"Think of it as a virtual detachment where we've built one front counter so you can walk in and get service in one place," says Supt. John Sliter, project authority for the RCMP's Economic Crime Branch. "This is crime reporting that allows you to get around borders and regulatory bureaucracies."

According to Carson Runions, an Internet analyst for RECOL, most of the online complaints have come from Canadians reporting suspected criminal activity in their own country. A small percentage of reports, however, relate to suspected crimes stemming from Chile, Russia, South Africa, the U.K. and the Netherlands.

Although the percentage of international complaints remains small, the number of occurrences is expected to rise given the growing use of the Internet. This potential makes it all the more important for the RCMP and international policing agencies to share information and integrate their systems where possible.

For instance, Police.uk is the U.K. Police Service portal that directs members of the public to various links for reporting non-emergency minor crimes online. The portal also provides a direct link to RECOL so that British citizens can easily contact the RCMP if they fall victim to a Canadian-based scam.

"We have a young relationship with RECOL," explains Detective Chief Inspector Bob Kennett, of Epolicing Intelligence and Investigation in the U.K. "But what we are telling British citizens is that if the crime happened they should go to RECOL or the IFCC (Internet Fraud Complaint Centre) first."

RECOL also has an interface with the IFCC in the United States. Complaint information is automatically sent to IFCC depending on the direction and consent of the consumer.
For more information on these initiatives, you can visit www.recol.ca or www.phonebusters.com

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WARNING!
Renewed Concern Over Lead in Jewellery

A study published by the University of North Carolina reports that levels of lead found in some non-precious jewellery, much of it children's jewellery, sold in major retail chains in the U.S. could cause brain damage in children.

Items with a dull, antique looking finish have the largest potential for lead content. There is a movement by some U.S. retailers towards lead-free children's jewellery.

The Health Canada website, www.hc-sc.gc.ca has some information on lead in jewellery in their "Lead Information Package".

JVC encourages you to visit this website for information on jewellery products containing lead as well as some giftware you may sell to retailers or retailers may sell to consumers.

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Crime Prevention Program

In 2004 JVC has sent out 120 Crime Alert Bulletins to the Crime Prevention members. Thanks to all the members who have forwarded information about crime affecting jewellers in their communities.

Your Crime Prevention Program renewal will be sent to you in June 2005. Remember, that together we have a better chance of fighting crime and one of the most important tools in prevention is education. Look for a newly revised prevention manual in 2005. Receive the most current information on detecting counterfeit Canadian currency.

IF YOU ARE NOT A JVC CRIME PREVENTION MEMBER CALL US TO
REGISTER AT 1-800-636-9536.

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The Kimberley Process

Joint Resolution
October 2004

The World Diamond Council (WDC), the International Diamond Manufacturers Association (IDMA) and the World Federation of Diamond Bourses (WFDB) have adopted a joint resolution to urge its members to continue to fully exact and implement the Kimberley Process Certification Scheme (KPCS) and its supporting system of warranties.

The following is an excerpt from the World Diamond Congress, Joint Resolution, October 2004:

1. Each member is urged to continue to educate themselves and other members of the Industry in the implementation and enactment of the KPCS and the supporting system of warranties.

2. Each organization is urged to pro-actively ensure that their members seek from their suppliers specific warranties on any invoice or memo accompanying diamonds or jewellery containing diamonds that the diamonds are traded in a manner consistent with UN resolutions, the Kimberley Process and the system of warranties.

3. Each organization is urged to pro-actively ensure their members include on each invoice or memo for diamonds or jewellery containing diamonds a warranty that they have been traded in a manner consistent with UN resolutions, the Kimberley Process, and the system of warranties.

4. Each company is urged to periodically review their individual business records of incoming and outgoing warranties for the purpose of ensuring the use of warranties for all goods traded.

IDMA and WFDB call upon all other sectors of the diamond trade, including jewellery manufacturing and retail sectors to fully participate in efforts to educate their members on the system of warranties and to fully participate in the efforts of the World Diamond Congress to implement the obligations of the Kimberley Process and the system of warranties

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