Alberta RCMP have laid charges in a $15 million money laundering case linked to illegal online cannabis sales. Four directors and one employee of Moxipay Corporation, based in Edmonton, are facing criminal charges including laundering the proceeds of crime and trafficking, RCMP said Thursday.
The year-long investigation determined that Moxipay was operating as an unregistered money service business — an offence under the Proceeds of Crime, Money Laundering, Terrorist Financing Act.
Unlicensed cannabis dispensaries used Moxipay to transfer and receive funds.
In 2018, Moxipay facilitated over 84,000 cannabis transactions bringing in nearly $15 million, RCMP said.
Eight online dispensaries were identified in supplying the illegal cannabis, said Supt. Chad Coles.
Money flowed through Moxipay
“Moxipay was used by those entities basically to layer or launder the funds,” Coles said. “Money wasn’t paid directly from the consumers of the cannabis to the online dispensary. That money flowed through Moxipay.”
Moxipay received the money through e-transfer payments and transferred it to the dispensaries through third-party individuals and entities, police said.
“This a complex and significant problem facing companies around the globe,” Coles said. “With advancing technologies and the use of the internet, illegal drug trafficking has become borderless.”
Some consumers may not have been aware that they were dealing with illegal dispensaries, but consumers need to know the laws and whether they are buying from a legal source, he added.
In Alberta, buying cannabis online legally can only be done through Alberta Gaming, Liquor & Cannabis’ online site, said Dave Berry, vice president of regulatory services.
There may be health and safety risks associated with illicit cannabis since the potency and purity of it is often unknown, Berry said.
“Testing of illicit products have come back to show contaminants — heavy metals and other kinds of things that are dangerous to your health,” he said.
The illegal sites may also put personal banking information at risk, RCMP said.
The information could be used to access personal bank accounts, open new accounts, transfer bank balances, apply for loans or credit cards, and to obtain fraudulent passports, police said.
The investigation involved RCMP, Canada Revenue Agency and other government agencies, and the Financial Transactions and Reports Analysis Centre of Canada.