Ontario police discovers cannabis-related money laundering scheme operating through casinos

The Hamilton-Niagara police, with the assistance of the Ontario Provincial Police and Financial Transactions and Reports Analysis of Canada (FINTRAC), has unravelled a drug trafficking and money laundering scheme, which led to multiple charges involving several individuals.

The investigation began in 2017 when the RCMP began gathering information about a potential money laundering scheme operating through casinos in the Greater Toronto Area and Niagara regions. Through the investigation, police discovered that more than $3 Million was laundered from the illegal sale of over 8,000 pounds of cannabis.

The police seized 29,975 cannabis plants, yielding 18,781 pounds of dried cannabis, 7,926 pounds of dried cannabis and $1,029,020 as part of the investigation. The total value of all seized cannabis was approximately $24,282,112. In addition, police restrained one farm and three GTA residences.

"This investigation, conducted with the assistance of the OPP and FINTRAC, serves as a great example of how a coordinated enforcement effort can contribute to safer communities by disrupting the illegal drug trade and confiscating money laundering proceeds," said Superintendent Jeff Cooper, Officer in Charge of District Command.

Search warrants were executed on five residences and six large-scale marijuana grow operations, resulting in the seizures.

The following individuals were charged:

Zu Wen Chang:

• Laundering the proceeds of crime, contrary to s.462.31 of the Criminal Code
• Possession of property obtained by crime, contrary to s.354(1)(a) of the Criminal Code
• Selling, contrary to s.10(1)(a) of the Cannabis Act
• Conspiracy to produce and sell cannabis, contrary to s.465(1)(c) of the Criminal Code
• Possession for the purpose of selling, contrary to s.10(2) of the Cannabis Act
• Cultivation, contrary to s.12(4)(a) of the Cannabis Act

Lin Li:

• Laundering the proceeds of crime, contrary to s.462.31 of the Criminal Code
• Possession of property obtained by crime, contrary to s.354(1)(a) of the Criminal Code
• Selling, contrary to s.(1)(a) of the Cannabis Act
• Conspiracy to produce and sell cannabis, contrary to s.(1)(c) of the Criminal Code
• Possession for the purpose of selling, contrary to s.10(2) of the Cannabis Act
• Cultivation, contrary to s.12(4)(a) of the Cannabis Act

Bo Hai Chen:

• Conspiracy to commit an indictable offence (selling and producing cannabis), contrary to s.465(1)(c) of the Criminal Code
• Possession for the purpose of selling, contrary to s.10(2) of the Cannabis Act
• Cultivation, contrary to s.12(4)(a) of the Cannabis Act
• Possession of property obtained by crime, contrary to s.354(1)(a) of the Criminal Code

En Quan Chen:

• Conspiracy to commit an indictable offence (selling and producing cannabis), contrary to Section 465(1)(c) of the Criminal Code
• Possession for the purpose of selling, contrary to s.10(2) of the Cannabis Act
• Cultivation, contrary to s.12(4)(a) of the Cannabis Act
• Possession of property obtained by crime, contrary to s.354(1)(a) of the Criminal Code

Jian Hua Tao:

• Conspiracy to commit an indictable offence (selling and producing cannabis), contrary to s.465(1)(c) of the Criminal Code
• Possession for the purpose of selling, contrary to s.10(2) of the Cannabis Act
• Cultivation, contrary to s.12(4)(a) of the Cannabis Act
• Possession of property obtained by crime, contrary to s.354(1)(a) of the Criminal Code

Criminal defense lawyer Salematou Camara says parliament enacted the Cannabis Act to limit what is legal and illegal about the consumption, production and selling of cannabis; therefore, the massive amounts of cannabis recovered, and their value is critical. Camara says the charges are serious, with the maximum penalty being between 10 and 14 years if found guilty.

There were authorized warrants to search the homes and the cannabis plants, so Camara says the most crucial legal implication will be how and what information was made available to the police.

"Section 8 of the charter indicates that every individual is protected against unreasonable search and seizure. But what's reasonable is defined by the case law," she says. "Nonetheless, a criminal defense perspective will be to carefully look at the issued warrants, the information provided by the police to get those warrants and the investigation done. These elements are crucial to see if these warrants were authorized with all the information supposed to be provided."

Often, judges authorize a search and seizure warrant without the accused and their lawyer and with only the police being present to make the case. Camara says that while police do not have to provide all the details of their investigations, they must provide accurate information.

The conspiracy charge is a straight indictable offense, and she says some wiretaps were likely authorized.

She says to try and show and prove how these people were working together to establish the conspiracy elements will be interesting because there are legal implications and possible litigation about whether the evidence itself may be admissible.

"The production of cannabis and its selling may be easier to prove, but the conspiracy element will require a bit more work from the police and depending on the evidence they have, it may be easy or not to prove their case."