Assessing the Effectiveness of Organized Crime Control Strategies ...

Assessing the Effectiveness of Organized Crime Control Strategies:
A Review of the Literature
nearly all of which is attributable to the suspicion-based rather than significant transaction
reports. Suspicion-based reports are usually triggered by the structuring of transactions below
the $10,000 threshold (or smurfing), international transfers of substantial amounts of cash, and
cash transactions involving those who are not regular clients of the branch (Levi, 1997:10). A
review in 1992 indicated that less than 10 percent of reports result in any direct action by law
enforcement or taxation authorities (Levi, 1997:9).
By contrast, in Canada, just over 100 cases have been referred to the RCMP by FINTRAC, the
new Canadian center that tracks financial transactions (Cordon, 2003:A12B). As the new
Proceeds of Crime Act and Terrorism Financing Act that led to the creation of this center have
only been introduced two years ago, it is too early to draw conclusions about its impact. The
reporting of suspicious financial transactions did not begin until November, 2001 (Auditor
General of Canada, 2003). In 2004, the Auditor General will report on the implementation of
these new laws.
Overall, Levi (1997:11) concludes that while the impact of money-laundering regulations cannot
be determined, they serve certain investigative and symbolic ends:
[laundering regulations] appear to be most useful as an ex post facto audit trail for
following through known leads. As for Australia, existing reviews suggest that
insufficient use is being made of what I regard as the most technologically advanced
set of controls…One of the core common issues internationally seems to be that
many enforcement insiders assumed that once they got the banks on their side…cases
would just fall into their lap since banks already knew about their customers’ crimes.
[In reality] all one has is an “out of character” financial transaction, the explanation
of which usually cannot be simply sought from the parties involved, if they are
thought to be criminals…insufficient police or customs staffing has been devoted to
them: a common problem of inadequate resourcing for police functions. In this
sense, money-laundering legislation could be viewed as being at the symbolic end of
the symbolic-instrumental legislation axis…
The impact of money-laundering laws may be even more modest when one examines the results
of those investigations that deal strictly with criminal enterprises.
While the jury is still out in terms of the impact of money-laundering laws and the evidence to
date is not reassuring, a number of investigations are noteworthy in their disruption of criminal
activities. Two examples are those of Operation Greenback and the “Pizza Connection” case.
Operation Greenback, for example, was the first US government task force concentrating on
money laundering. Referred to as the first successful attempt to take the profit out of drug
trafficking, it was initiated in 1980 and, during its first three years, the project produced 40
indictments against 152 individuals from 40 organizations. One hundred and eleven people were
arrested and $33 million in US currency seized. The project yielded millions of dollars of
additional seizures in property, as well as substantial amounts forfeited (Dombrink and Meeker,
1987: 729). In the “Pizza Connection” case, an elaborate scheme was set up to launder the
proceeds of heroin smuggled from Southeast Asia and distributed in the eastern US by the
26 | Research and Statistics Division / Department of Justice Canada