Bringing U.S. RICO Laws to Canada—Solving Canada’s Organized Crime Problem

Bringing U.S. RICO Laws to Canada—Solving Canada’s Organized Crime Problem

The famous act that was introduced in New York in 1970 that helped bring down New York’s crime families is called the Racketeer Influenced and Corrupt Organizations Act, better known by its acronym “RICO”.  Prior to RICO laws, the U.S.  had grey area loopholes that only allowed prosecutors to try mob-related crimes individually, so crimes could only be prosecuted one at a time.  When tabling RICO laws, the U.S.  government took RICO one step further, they wrote them in such a broad manner that RICO went from solely being criminal and extended to allow for civil claims against all sorts of enterprises too, both legal and illegal ones.  Additionally, on the government side, RICO sentences were so enhanced that mob  members often volunteered to cooperate the moment they were arrested, because there was a real chance of having to forfeit material possessions and spending the rest of their life in a prison.

What constitutes as being a criminal RICO violation is defined by 35 offences that constitute racketeering, including gambling, money laundering, drug dealing, bribery, extortion, loan sharking, and embezzlement, and people can be charged with multiple offences.  To charge a person under RICO, at least two types of these crimes within 10 years must have been committed through the enterprise.  The term “enterprise” is used loosely to define both legal and illegal enterprises like restaurants and laundromats, but also street gangs and crime groups – basically a discrete entity and not a sole individual.  More compelling might be the fact that prosecutors are able to freeze assets so that they can not be moved to prevent them from getting seized.

A civil RICO violation, on the other hand, only requires for someone to have been harmed as a result of a RICO-classified act, and there are three key pieces of evidence a plaintiff must demonstrate: a criminal activity, a pattern of criminal activity, and that it is within the statute of limitations.  The defendant only needs to demonstrate that at least one RICO-classified act was committed, and that the crime has occurred on at least two occasions and involves the same victims, same methods, and same participants over at least a year, but there is a 4-year statue of limitations which begins tolling from the time the victim discovers their damages.

Only after getting an understanding of what RICO laws look like does it become possible to understand why organized criminal activity is a matter of national security, but also why it should also be viewed as a national security threat.  The United Nations Office on Drugs and Crime created a teaching module series on organized crime and one of those modules touches on its structural factors.  “The structural approach towards explaining organized crime focuses less on individual behaviour and emphasizes the role played by broader systemic factors, such as sociological, legal, economic, and political attributes of the international system.  These factors may not necessarily cause crime, but they create the conditions in which organized criminal activity flourishes.” There is also a strong emphasis on how organized crime emerges from a power vacuum created by the absence of enforcement and good governance.  “The incapability of state institutions”, they began, “allows criminal organizations to operate more or less freely, and corruption attracts organized crime, as corrupt institutions are highly susceptible to influence.  Therefore, organized criminal groups can take advantage of the governance void in weak States, as well as the lack of law and order, and use the State to further their interests.”

The name to remember is that of current B.C.  Premier and former B.C.  Attorney General, David Eby.

Imagine being elected to government, being appointed to cabinet as attorney general, then being assigned the ministerial role for a highly problematic liquor, gaming, and provincial insurance corporation and not giving in to external pressures to embrace “baby step” improvements, but rather going after the biggest challenges plaguing the province despite being told that it would threaten your chance at getting re-elected.  That is the path that the Ontario-born David Eby took, the path with the most resistance, to becoming Premier of British Columbia (B.C.), and it is a path unlike any that other Premiers across Canada have taken.

Imagine coming out and saying that the governmental organization for gaming, specifically casinos, has been infiltrated by organized crime, has had their integrity compromised, and that Canada needed RICO-style laws to combat the problem, despite being told that it would impact your re-election chances and result in you getting blackballed.  Better yet, imagine the resulting outcome being that a political news magazine comes out with a favorable article and even says how you have managed to handle every live grenade thrown your way, and previous attorney generals’ being in awe of your relentless crime-busting efforts and the resulting successes.  If someone was to describe a person like this, one might expect to hear those that know a person like that to say something along the lines of them being so smart that it could be intimidating.  And that is precisely how current B.C.  Premier and former B.C.  Attorney General has been described by those that know him best, in addition to being principled, funny, and warm.

Then-Attorney General David Eby recommends public inquiry into B.C.’s organized criminal activity problem.

In 2019, then-Attorney General Eby wrote a confidential to the then-Federal Public Safety Minister requesting that Canada institute U.S.-style racketeering laws, something that many Canadian experts on transnational crime have long asked for.  In that letter, Attorney General Eby mentioned the German Report on organized criminal activity and money laundering, how the U.S.  had labelled Canada a “Major Money Laundering jurisdiction” and how Canada needed to take steps to increase enforcement and prosecution for organized crimes, and the desperate need to do more “if public confidence in our justice system is to be preserved.

The German Report, conducted by former RCMP deputy commissioner turned academic, Dr. Peter German, might be one of the most important reports to come out about the importance and interconnected nature of policing and public policies as it relates to combating organized crime: detailing the influence and activity that organized criminal groups were partaking in and how the integrity of B.C. institutions was at stake.  The report stated that over the prior 15 years in B.C., all of the large casinos were impacted by varying elements of organized crime and exploited to launder money.  The report also highlighted how an executive director of the Gaming Policy and Enforcement Branch correctly identified the issue in a 2013 email, but less than a year later that same executive, along with a senior director of investigations, were fired without cause, and how it appeared that then-stakeholder leadership group seemed to believe that risks should be balanced with revenue generation, with German criticizing the position considering that it was a matter of public safety.

Perhaps most shocking is the realization that prior governments were made aware of the seriousness that organized crime posed to B.C.’s institutions and to public safety, but in-fighting amongst bureaucrats allowed the problem to grow.  Additionally, the report highlighted how a previous Solicitor General, who also oversaw B.C.’s gaming portfolio, had been made aware by top-level RCMP officers in the early 2010s that B.C.’s casinos were being used to launder the proceeds of crime.  Yet, that same Solicitor General would later go on to verbally attack a senior RCMP officer who was interviewed by a news network after they stated that there was something sketchy occurring in B.C., going so far as to file a complaint about the officer’s remarks with the RCMP.  After that complaint, B.C.’s RCMP would go silent and rarely make any remarks on the issue until the German Report was released. But when the German Report did not result in any major legislative changes at the federal level, then-B.C.  Premier John Horgan announced that the province would be holding a public inquiry as a result of the shocking findings that showed widespread laundering in the province’s real estate, gambling, and luxury goods sector into money laundering.

To lead the public inquiry, B.C. Supreme Court Justice, Austin Cullen, was selected to look into real estate, gaming financial institutions, and the corporate and professional sectors. What the Cullen Public Inquiry concluded was just as shocking as the German Report.  In short, policing agencies had informed multiple former ministers responsible for gaming that there was a problem with organized criminal activity in B.C.’s casinos, but that B.C.’s Liquor and Gaming Commission was saying that they had strong and effective anti-money laundering regime, so this mixed message was the excuse used by a then-minister to explain why nothing was done. That explanation should not be surprising, however, because the same minister had previously stated that the RCMP’s anti-illegal gaming unit (IIGET) was ineffective at controlling organized crime in casinos, something that was never part of their mandate, which solely focused on illegal gambling and not licensed casinos.

Retired-RCMP officers and former Crown Prosecutor speak on B.C.’s state of affairs.

Multiple retired-RCMP officers eventually took the opportunity to respond to media requests for interviews, with the common message from those interviews being that Canada lacked the legislation that would allow the highest level of policing to go after serious transnational crime networks and specific organized criminal groups in Canada.  One of the retired officers even mentioned how Canada had once been viewed as an international leader in anti-money laundering efforts and how it assisted developing countries with auditing protocols prior to the RCMP’s team of money laundering experts being disbanded.  Another mentioned that Canada was lacking the necessary provisions to combat serious organized crime, and how the interconnected nature of policing and public policy was not up to par to address the dynamic nature of the threat, also calling it a national security threat.  But the most shocking comment had to do with how the year that the former B.C.  Solicitor General had verbally attacked the senior RCMP officer and filed a complaint with the RCMP was also the year the province’s provincial policing contract was up for renewal, and retired RCMP officers stated that they felt that played a major role in why the B.C.  RCMP eventually went silent on the issue.

Perhaps the most unexpected voice to opine on the findings was that of former Crown prosecutor Sandy Garossino, who spoke on the German Report as well as a leaked confidential report put together by IIGET that requested that its scope be expanded beyond just illegal casinos to target high-level organized crime.  The former Crown prosecutor stated that the German report reflected a complete collapse of regulatory oversight, and that the RCMP report pointed to the appearance of corruption in the regulatory system and that the circumstances around the disbanding of IIGET, happening only three months after their report was leaked, were worthy of being investigated.

All in all, B.C.  rang the alarm and echoed the need for significant reform and that a Canadian version of RICO laws was much needed, but few other provinces seem to have joined in on that call, and no major legislative changes seem to have resulted from either the German Report or the Cullen Inquiry.

Organized crime’s influence on institutions is not a single-province issue.

Then-Attorney General Eby would make key remarks at conference organized by the University of British Columbia’s Allard Law School, the International Centre for Criminal Law Reform and Transparency International Canada early into his ministerial role as attorney general, about how there were many details not available to the public related to organized crime because there were ongoing investigations related to serious, large-scale, transnational criminal activity.  It was eerily similar to the remarks made by former Prime Minister Stephen Harper at a 2023 conference, many years later, about how Canada’s national security issues were far worse than Canadians could even image.

If Premier Eby was on record stating that past B.C.  governments failed to detect, prevent, and prosecute organized criminal activity, even saying that there was the turning of a blind eye, then it is just as possible that Canada’s other provinces have been influenced to some degree in some form and manner.  It may be a scary preposition, but there is optimism in other statements that Premier Eby has made elsewhere, “It’s not like it was impossible to address this issue.  It’s not like it was an invisible issue or it was hard to figure out.”

Why haven’t RICO laws trickled over into Canada yet?

Over the past 53 years since the introduction of New York’s RICO laws, the powers that were initially created to go after mafia families have also been leveraged to go after many other forms of organized crime, and U.S.  prosecutors have even used them to even go after corrupt police departments and elected officials.  For all the criticism that the U.S.  receives for over sentencing individuals, no other country in the world goes to the length that the U.S.  does when it comes to prosecuting individuals who were entrusted with institutional powers and who intentionally violated that trust, and it shows with their application RICO.

So, given that most significant outcomes in the U.S.  tend to trickle over to Canada, the natural question becomes why has Canada not yet introduced RICO laws? Is it because we have a perfect union and because our democracy is impervious to the harms posed by organized crimes? No, far from it.  Perhaps it has something to do with the idea of portraying that image because it is much harder to go after undesirable realities and so that the outside world continues to think of us as a being a perfect federation, instead of realizing that we have our flaws as well.

However, organized crime might be the single-greatest threat to democracy and public safety, and is guaranteed to unwind any and all progress if allowed to persist long enough.  But that idea, how public inquiries shield bureaucrats in a similar manner to how a provincial police services act might shield police from criminal and civil responsibility, and more, will get explored throughout this multi-part series on “Bringing U.S.  RICO Laws to Canada.