Money Laundering (Offence)

From Criminal Law Notebook
This page was last substantively updated or reviewed August 2021. (Rev. # 90843)


Money Laundering
s. 462.31 of the Crim. Code
Election / Plea
Crown Election Hybrid
summary proceedings must initiate within 12 months of the offence (786(2))
Jurisdiction Prov. Court

Sup. Court w/ Jury (*)
Sup. Court w/ Judge-alone (*)

* Must be indictable.
Summary Dispositions
Avail. Disp. Discharge (730)

Suspended Sentence (731(1)(a))
Fine (734)
Fine + Probation (731(1)(b))
Jail (718.3, 787)
Jail + Probation (731(1)(b))
Jail + Fine (734)

Conditional Sentence (742.1)
Minimum None
Maximum 2 years less a day jail and/or a $5,000 fine (from Sept 19, 2019)
Indictable Dispositions
Avail. Disp. same as summary
Minimum None
Maximum 10 years incarceration
Reference
Offence Elements
Sentence Digests

Overview

Offences relating to money laundering are found in Part XII.2 of the Criminal Code relating to "Proceeds of Crime".

Pleadings
Offence
Section
Offence
Type
Crown Election Defence Election
s. 536(2)
Preliminary Inquiry
s. 462.31 [money laundering] Hybrid Offence(s) (* only if Crown proceeds by Indictment) (under 14 years max)
s. 462.33 [breach of a restraint order] Hybrid Offence(s) (* only if Crown proceeds by Indictment)

Offences under s. 462.31 [money laundering] are hybrid with a Crown election. If prosecuted by indictment, there is a Defence election of Court under s. 536(2) to trial by provincial court, superior court judge-alone or superior court judge-and-jury.

Offences under s. 462.33 [breach of a restraint order] are hybrid with a Crown election. If prosecuted by indictment, there is a Defence election of Court under s. 536(2) to trial by provincial court, superior court judge-alone or superior court judge-and-jury.

Release

When charged under s. 462.31 [money laundering]
s. 462.33(11), the accused can be given an appearance notice without arrest under s. 497 or a summons. If arrested, he can be released by the arresting officer under s. 498 or 499 on an undertaking with or without conditions. He can also be released by a justice under s. 515.

Reverse Onus Bail

If police decide to bring the accused before a Justice pursuant to s. 503, there will be a presumption against bail (i.e. a reverse onus) if the offence, prosecuted by indictment, was committed:

  • while at large under s. 515 [bail release], 679 or 680 [release pending appeal or review of appeal] (s. 515(6)(a)(i));
  • "for the benefit of, at the direction of, or in association" with a criminal organization (s. 515(6)(a)(ii));
  • where the offence involved a weapon, being a firearm, cross-bow, prohibited weapon restricted weapon, prohibited device, ammunition, prohibited ammunition or explosive substance, while the accused was subject to a prohibition order preventing possession of these items (s. 515(6)(a)(viii)); or
  • where the accused is not "ordinarily a resident in Canada" (s. 515(6)(b)).

And, regardless of Crown election, if the offence alleged was one:

  • where the offence was an allegation of violence against an "intimate partner" and the accused had been previously convicted of an offence of violence against an "intimate partner" (s. 515(6)(b.1));
  • where the offence alleged is a breach under s. 145(2) to (5) while (s. 515(6)(c));
  • where the offence committed (or conspired to commit) was an offence under s. 5 to 7 of the CDSA that is punishable by life imprisonment (s. 515(6)(d));
Publication Bans

For all criminal or regulatory prosecutions, there is a discretionary general publication ban available on application of the Crown, victim or witness to prohibit the publishing of "any information that could identify the victim or witness" under s. 486.5(1) where it is "necessary" for the "proper administration of justice". Other available publication bans include prohibitions for publishing evidence or other information arising from a bail hearing (s. 517), preliminary inquiry (s. 539) or jury trial (s. 648). There is a mandatory publication ban in all youth prosecutions on information tending to identify young accused under s. 110 of the YCJA or young victims under s. 111 of the YCJA.

Offence Designations
Offence(s) Wiretap
Eligible

s. 183
Dangerous Offender
Designated Offence

s. 752
Serious Personal
Injury Offence

s. 752
AG Consent Required Serious Criminality
Offence
s. 36 IRPA
s. 462.31 [money laundering]
s. 462.33 [money laundering]

Offences under s. 462.31 are designated offences eligible for wiretap under s. 183.

See below in Ancillary Sentencing Orders for details on designations relating to sentencing orders.

Offence Wording

Offence
Laundering proceeds of crime

462.31 (1) Every one commits an offence who uses, transfers the possession of, sends or delivers to any person or place, transports, transmits, alters, disposes of or otherwise deals with, in any manner and by any means, any property or any proceeds of any property with intent to conceal or convert that property or those proceeds, knowing or believing that, or being reckless as to whether, all or a part of that property or of those proceeds was obtained or derived directly or indirectly as a result of

(a) the commission in Canada of a designated offence; or
(b) an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence.
Punishment

(2) Every one who commits an offence under subsection (1) [money laundering – offence]

(a) is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years; or
(b) is guilty of an offence punishable on summary conviction.
Exception

(3) A peace officer or a person acting under the direction of a peace officer is not guilty of an offence under subsection (1) [money laundering – offence] if the peace officer or person does any of the things mentioned in that subsection for the purposes of an investigation or otherwise in the execution of the peace officer’s duties.

R.S., 1985, c. 42 (4th Supp.), s. 2; 1996, c. 19, s. 70; 1997, c. 18, s. 28; 2001, c. 32, s. 13; 2005, c. 44, s. 2(F); 2019, c. 29, s. 103.
[annotation(s) added]

CCC (CanLII), (DOJ)


Note up: 462.31(1), (2) and (3)


Defined terms: "designated offence" (s. 462.3), "person" (s. 2), and "property" (s. 2)

462.33
[omitted (1), (2), (3), (3.01), (3.1). (4), (5), (6), (7), (8), (9) and (10)]

Offence

(11) Any person on whom an order made under subsection (3) [application for restraint order – requirements for granting order] is served in accordance with this section and who, while the order is in force, acts in contravention of or fails to comply with the order is guilty of an indictable offence or an offence punishable on summary conviction.
R.S., 1985, c. 42 (4th Supp.), s. 2; 1993, c. 37, s. 21; 1996, c. 16, s. 60; 1997, c. 18, s. 30; 2001, c. 32, s. 15; 2005, c. 44, s. 4; 2019, c. 25, s. 181.
[annotation(s) added]

CCC (CanLII), (DOJ)


Note up: 462.33(11)

Draft Form of Charges

See also: Draft Form of Charges
Pre-ambles
"THAT [accused full name] stands charged that, between the <DATE> day of <MONTH>, <YEAR> and <DATE> day of <MONTH>, <YEAR>***, at or near <COMMUNITY/TOWN/CITY>, <PROVINCE>, he [or she]..." OR
"THAT [accused full name] stands charged that, on or about the <DATE> day of <MONTH>, <YEAR>, at or near <COMMUNITY/TOWN/CITY>, <PROVINCE>, he [or she]..." OR
"AND FURTHER at the same time and place aforesaid, he [or she]..."
Code Section Subject of Offence Draft Wording
462.31 Money Laundering "..., did use, transfer the possession of, send to or deliver to [name of person or place] or transport, alter, dispose of, or otherwise deal with, property or proceeds and knowing that all or part of that property or proceeds was obtained or derived directly or indirectly from the commission of an enterprise crime offence or a designated drug offence, to wit: [conduct], contrary to section 462.31 of the Criminal Code."
462.33 "..., ..., to wit: [conduct], contrary to section 462.33 of the Criminal Code."

Proof of the Offence

Proving money laundering under s. 462.31 should include:[1]

  1. identity of accused as culprit
  2. date and time of the incident
  3. jurisdiction (incl. region and province)
  4. the culprit "uses, transfers the possession of, sends or delivers to any person or place, transports, transmits, alters, disposes of or otherwise deals with" the subject matter of the offence;
  5. the subject matter is "any property or any proceeds of any property obtained or derived directly or indirectly as a result of"
    1. the commission in Canada of an enterprise crime offence or an offence; or
    2. an act or omission anywhere that, it had occurred in Canada, would have constituted an enterprise crime offence or an offence
  6. the offence is a "designated offence";
  7. the culprit had an intent to conceal or convert the property or proceeds; and
  8. the culprit knows or believes "that all or a part of that property or of those proceeds was obtained or derived directly or indirectly as a result of" the "commission in Canada of a designated offence" or "act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence".
  1. R v Tan Tien Nguyen, 2013 ONSC 605 (CanLII), per Ricchetti J, at para 315
    R v Bailey, 2014 ABPC 103 (CanLII), per Fradsham J, at para 454
    R v Barna, 2018 ONCA 1034 (CanLII), 371 CCC (3d) 217, per curiam, at para 12 ("The essential elements of laundering proceeds of crime are: (1) that the accused dealt with property (in this case, the bank draft) or proceeds of property; (2) that the property was obtained by crime (in this case, fraud); (3) that the accused knew or believed that the property had been obtained by crime; and (4) that the accused intended to conceal or convert the property...")
    R v Tejani, 1999 CanLII 3765 (ON CA), 138 CCC (3d) 366, per Laskin JA

Interpretation of the Offence

Money laundering is defined by the OECD as the "processing of criminal proceeds to disguise their illegal origin in order to legitimise the ill-gotten gains of crime."[1]

Actus Reus

The actus reus is "very broad", involving dealing with any property in one of the enumerated ways.[1]

  1. R v Barna, 2014 ONSC 1011 (CanLII), per Pattillo J, at para 184
    R v Tejani, 1999 CanLII 3765 (ON CA), 123 O.A.C. 329, 138 CCC (3d) 366, per Laskin JA, at para 26

Mens Rea

There are two elements of mens rea. There must be "knowledge or belief" that the property was "derived from" a designated offence, and there must be an "intent to conceal or convert" the property or proceeds.[1]

Specificity

It is not necessary that they know the exact origin, only that they know the type of crime it is from.[2] Details of the crime are not necessary.[3] However, it is insufficient to have a belief of an "unspecified criminal activity."[4]

Wilful Blindness

The knowledge element of the offence can be made out by wilful blindness.[5] Wilful blindness will not apply in money laundering where it is found that the accused was deceived, even in the face of profound naivety.[6]

  1. R v Barna, 2014 ONSC 1011 (CanLII), [2014] O.J. No. 2373, per Pattillo J, at para 186
    See R v Tejani, 1999 CanLII 3765 (ON CA), 138 CCC (3d) 366, per Laskin JA, at para 27
    R v Daoust, 2004 SCC 6 (CanLII), at para 241
  2. R v Tan Tien Nguyen, 2013 ONSC 605 (CanLII), per Ricchetti J, at para 317
  3. Tejani, supra, at para 36
  4. Tejani, supra, at para 34
  5. R v Bailey, 2014 ABPC 103 (CanLII), per Fradsham J, at para 473
    Barna, supra, at para 187
    Tejani, supra, at para 41
  6. R v Garnett, 2016 NSSC 131 (CanLII), per Campbell J, at para 13

"or otherwise deals with"

The phrase "or otherwise deals with" were read out of the section as the wording does not appear in the french version.[1]

  1. R v Barna, 2014 ONSC 1011 (CanLII), per Pattillo J, at para 185 appealed to 2018 ONCA 1034
    R v Bois, 2004 SCC 6 (CanLII), [2004] 1 SCR 217, per Bastarache J

"convert" and "conceal"

The act of "converting" does not require any effort to conceal. The two terms are separate.[1] "Convert" uses its "ordinary" meaning.[2]

  1. R v Daoust, 2004 SCC 6 (CanLII), [2004] 1 SCR 217, per Bastarache J
  2. Daoust, ibid.

"property"

A bank draft can constitute "property."[1]

  1. R v Barna, 2018 ONCA 1034 (CanLII), 371 CCC (3d) 217, per curiam

"Designated Offence"

See also: Forfeiture of Proceeds of Crime#Designated Offence Defined

Participation of Third Parties

See also: Role of the Victim and Third Parties and Testimonial Aids for Young, Disabled or Vulnerable Witnesses
Testimonial Aids

Certain persons who testify are entitled to make application for the use of testimonial aids: Exclusion of Public (s. 486), Use of a Testimonial Screen (s. 486), Access to Support Person While Testifying (s. 486.1), Close Proximity Video-link Testimony (s. 486.2), Self-Represented Cross-Examination Prohibition Order (s. 486.3), and Witness Security Order (s. 486.7).

A witness, victim or complainant may also request publication bans (s. 486.4, 486.5) and/or a Witness Identity Non-disclosure Order (s. 486.31). See also, Publication Bans, above.

On Finding of Guilt
Offence(s) Victim Notice
of Agreement
s. 606(4.1)
[SPIO]
Victim Queried
for Interest in Agreement
s. 606(4.2)
[5+ years]
Victim Notice
for Restitution
s. 737.1
Victim Notice
of Impact Statement
s. 722(2)
s. 462.31 [money laundering]
s. 462.33(11) [breach of a restraint order]

Under s. 738, a judge must inquire from the Crown before sentencing whether "reasonable steps have been taken to provide the victims with an opportunity to indicate whether they are seeking restitution for their losses and damages".

Under s. 722(2), the judge must inquire "[a]s soon as feasible" before sentencing with the Crown "if reasonable steps have been taken to provide the victim with an opportunity to prepare" a victim impact statement. This will include any person "who has suffered, or is alleged to have suffered, physical or emotional harm, property damage or economic loss" as a result of the offence. Individuals representing a community impacted by the crime may file a statement under s. 722.2.

Sentencing Principles and Ranges

See also: Purpose and Principles of Sentencing, Sentencing Factors Relating to the Offender, and Sentencing Factors Relating to the Offence
Maximum Penalties
Offence(s) Crown
Election
Maximum Penalty
s. 462.31 [money laundering] summary election 2 years less a day jail and/or a $5,000 fine (from Sept 19, 2019)
s. 462.31 [money laundering] indictable election 10 years incarceration
s. 462.33(11) [breach of a restraint order] summary election 2 years less a day jail and/or a $5,000 fine (from Sept 19, 2019)
s. 462.33(11) [breach of a restraint order] indictable election 5 years incarceration [1]

Offences under s. 462.31 [money laundering] are hybrid. If prosecuted by indictment, the maximum penalty is 10 years incarceration. If prosecuted by summary conviction, the maximum penalty is 2 years less a day jail and/or a $5,000 fine (from Sept 19, 2019).

Offences under s. 462.33(11) [breach of a restraint order] are hybrid. If prosecuted by indictment, the maximum penalty is 5 years incarceration. If prosecuted by summary conviction, the maximum penalty is 2 years less a day jail and/or a $5,000 fine (from Sept 19, 2019).

Minimum Penalties

These offences have no mandatory minimum penalties.

Available Dispositions
Offence(s) Crown
Election
Discharge
s. 730
Suspended
Sentence

s. 731(1)(a)
Stand-alone
Fine

s. 731(1)(b)
Custody
s. 718.3, 787
Custody and
Probation
s. 731(1)(b)
Custody and
Fine
s. 734
Conditional
Sentence
(CSO)
s. 742.1
s. 462.31 [money laundering] any
s. 462.33(11) [breach of a restraint order] Indictable

All dispositions are available.The judge may order a discharge (s. 730), suspended sentence (s. 731(1)(a)), fine (s. 731(1)(b)), custody (s. 718.3, 787), custody with probation (s. 731(1)(b)), custody with a fine (s. 734), or a conditional sentence (s. 742.1).

Consecutive Sentences

There are no statutory requirements that the sentences be consecutive.

Where this offence is accompanied by a fraud charge. The judge may be able to sentence money laundering as consecutive to the fraud sentence.[2]

  1. Note: the maximum penalty of is based on s. 743 which designates 5 years where not specified.
  2. R v Neilson, 2020 ABQB 556 (CanLII), per Eidsvik J, at para 106

Principles

Ranges

see also: Money Laundering (Sentencing Cases)

It is suggested that money laundering alone will net a sentence in a range between 2 years less a day CSO to a jail sentence between 18 months and 5 years.[1]

  1. R v Sheck v. Canada (Minister of Justice), 2019 BCCA 364 (CanLII), 381 CCC (3d) 161, per Griffin JA, at para 62

Ancillary Sentencing Orders

Offence-related Orders

Order Conviction Description
DNA Orders s. 462.31 [money laundering]


General Sentencing Orders
Order Conviction Description
Non-communication order while offender in custody (s. 743.21) any The judge has the discretion to order that the offender be prohibited "from communicating...with any victim, witness or other person" while in custody except where the judge "considers [it] necessary" to communicate with them.
Restitution Orders (s. 738) any A discretionary Order is available for things such as the replacement value of the property; the pecuniary damages incurred from harm, expenses fleeing a domestic partner; or certain expenses arising from the commission of an offence under s.402.2 or 403.
Victim Fine Surcharge (s. 737) any A discretionary surcharge under s. 737 of 30% of any fine order imposed, $100 per summary conviction or $200 per indictable conviction. If the offence occurs on or after October 23, 2013, the order has smaller minimum amounts (15%, $50, or $100).
General Forfeiture Orders
Forfeiture Conviction Description
Forfeiture of Proceeds of Crime (s. 462.37(1) or (2.01)) any Where there is a finding of guilt for an indictable offence under the Code or the CDSA in which property is "proceeds of crime" and offence was "committed in relation to that property", the property shall be forfeited to His Majesty the King on application of the Crown. NB: does not apply to summary offences.
Fine in Lieu of Forfeiture (s. 462.37(3)) any Where a Court is satisfied an order for the forfeiture of proceeds of crime under s. 462.37(1) or (2.01) can be made, but that property cannot be "made subject to an order", then the Court "may" order a fine in "an amount equal to the value of the property". Failure to pay the fine will result in a default judgement imposing a period of incarceration.
Forfeiture of Weapons or Firearms (s. 491) any Where there is finding of guilt for an offence where a "weapon, an imitation firearm, a prohibited device, any ammunition, any prohibited ammunition or an explosive substance was used in the commission of [the] offence and that thing has been seized and detained", or "that a person has committed an offence that involves, or the subject-matter of which is, a firearm, a cross-bow, a prohibited weapon, a restricted weapon, a prohibited device, ammunition, prohibited ammunition or an explosive substance has been seized and detained, that the item be an enumerated weapon or related item be connected to the offence", then there will be a mandatory forfeiture order. However, under s. 491(2), if the lawful owner "was not a party to the offence" and the judge has "no reasonable grounds to believe that the thing would or might be used in the commission of an offence", then it should be returned to the lawful owner.
Forfeiture of Offence-related Property (s. 490.1) any Where there is a finding of guilt for an indictable offence, "any property is offence-related property" where (a) by means or in respect of which an indictable offence under this Act or the Corruption of Foreign Public Officials Act is committed, (b) that is used in any manner in connection with the commission of such an offence, or (c) that is intended to be used for committing such an offence". Such property is to be forfeited to Her Majesty in right of the province. NB: does not apply to summary offences.

Record Suspensions and Pardons

Convictions under s. 462.31 [money laundering] are eligible for record suspensions pursuant to s. 3 and 4 of the Criminal Records Act after 5 years after the expiration of sentence for summary conviction offences and 10 years after the expiration of sentence for all other offences. The offender may not have the record suspended where the offender was (1) convicted of 3 or more offences with a maximum penalty of life, and (2) for each 3 offences he "was sentenced to imprisonment for two years or more".

History

See also: List of Criminal Code Amendments and Table of Concordance (Criminal Code)

2001 to 2005

Laundering proceeds of crime

462.31 (1) Every one commits an offence who uses, transfers the possession of, sends or delivers to any person or place, transports, transmits, alters, disposes of or otherwise deals with, in any manner and by any means, any property or any proceeds of any property with intent to conceal or convert that property or those proceeds, knowing or believing that all or a part of that property or of those proceeds was obtained or derived directly or indirectly as a result of

(a) the commission in Canada of a designated offence; or
(b) an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence.
Punishment

(2) Every one who commits an offence under subsection (1)

(a) is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years; or
(b) is guilty of an offence punishable on summary conviction.
Exception

(3) A peace officer or a person acting under the direction of a peace officer is not guilty of an offence under subsection (1) if the peace officer or person does any of the things mentioned in that subsection for the purposes of an investigation or otherwise in the execution of the peace officer’s duties.
R.S., 1985, c. 42 (4th Supp.), s. 2; 1996, c. 19, s. 70; 1997, c. 18, s. 28; 2001, c. 32, s. 13.

CCC

See Also

Related Offences
References