Charges Laid in Money Laundering Case Linked to Illegal Online Cannabis Sales

Charges Laid in Money Laundering Case Linked to Illegal Online Cannabis Sales

Edmonton – The Federal Serious and Organized Crime Unit, in partnership with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada Revenue Agency, the Forensic Accounting Management Group and the Seized Property Management Directorate, has concluded an investigation into Moxipay Corporation, an Edmonton based company who facilitated payments for unlicensed illegal online cannabis dispensaries.

The year-long investigation determined that Moxipay was operating as an unregistered Money Service Business which is an offence under the Proceeds of Crime, Money Laundering, Terrorist Financing Act (PCMLTFA). The investigation identified that cannabis dispensaries not federally licensed to produce and/or sell cannabis in Canada, used Moxipay to transfer and receive funds.

From January 2018 to December 2018, Moxipay facilitated over 84,000 transactions where nearly $15 million dollars was received as proceeds from the illegal online sale of cannabis. Moxipay received the funds through e-transfer payments into several bank accounts and subsequently, the funds were laundered by Moxipay either by way of transfer back to the illegal online cannabis dispensaries or to their direct benefit through third party individuals and entities.

Four Directors of Moxipay, Nando Covelli, 67, John Oluk, 67, Marco Bonnani, 45, Daniel Tse, 39, were charged with the following Criminal Code offences:

·         Laundering Proceeds of Crime under Section 462.31(1)(a) of the Criminal Code

·         Possession of Property Obtained by Crime under Section 354(1)(a) of the Criminal Code

·         Trafficking in Property Obtained by Crime contrary to Section 355.2 of the Criminal Code

·         Commission of Offence for Criminal Organization under Section S.467.12 of the Criminal Code 

and the following PCMLTFA offences:

·         Failure to Register with FINTRAC under Sections 74(1) of the PCMLTFA.

·         Failure to Identify a Person under Section 74(1) of the PCMLTFA.

·         Failure to Report Suspicious Activity under Sections 74(1) and 75(1) of the PCMLTFA.

Lorenzo (John) Covelli, 31, an employee with Moxipay, was also charged with the following Criminal Code offences:

·         Laundering Proceeds of Crime under Section 462.31(1)(a) of the Criminal Code

·         Possession of Property Obtained by Crime under Section 354(1)(a) of the Criminal Code

·         Trafficking in Property Obtained by Crime contrary to Section 355.2 of the Criminal Code

·         Commission of Offence for Criminal Organization under Section S.467.12 of the Criminal Code 

“Illicit online drug trafficking is borderless and always evolving. It has forced police agencies to be innovative in their approach when tackling these complex investigations. Consumers have a responsibility to know the laws; know that where they are purchasing from is a legal source.”– Superintendent Chad Coles, Federal Serious and Organized Crime

In Alberta, purchasing cannabis legally online can only be done through Alberta Gaming, Liquor & Cannabis’ (AGLC) online site at www.albertacannabis.org. In Canada, if cannabis or cannabis products are not purchased from a government regulated online site or a licenced retailer, the cannabis is considered illicit. It is illegal for an individual to possess or distribute cannabis they know is illicit. Penalties for possession of illegal cannabis can result in a fine up to $5000 fine and/or sentencing.

“Since the legalization of recreational cannabis came into effect last year, consumers now have access to federally inspected and provincially regulated cannabis products. Currently, there are more than 370 licensed retailers in Alberta and only one legal source to purchase cannabis online, AlbertaCannabis.org. Limiting the illicit market remains a top priority for AGLC.”

– Dave Berry, Vice President, Regulatory Services, AGLC

There may be health and safety risks associated with illicit cannabis. The potency is often unknown, which could result in a stronger product than expected. Also, the quality and purity of illicit cannabis cannot be guaranteed and is frequently mixed with or contains such health hazards as;

·         Pesticides

·         Other drugs

·         Heavy metals

·         Moulds or fungi

·         Other contaminants

Additionally, because the sites are being run in an illicit manner, the risk of having your banking information compromised exists. Criminals can use your stolen or reproduced personal or financial information to:

·         Access your bank accounts

·         Open new bank accounts

·         Transfer bank balances

·         Apply for loans and credit cards

·         Obtain fraudulent passports 

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *