The RCMP have arrested a BC resident they say was laundering millions of dollars through illicit online sales of cannabis in Alberta and British Columbia. 

The RCMP’s Federal Policing Northwest Region’s Federal Financial Crime Team (FFCT) in Edmonton allege that 30-year-old Harry Seo of Burnaby, BC, laundered proceeds of crime via online transactions of illicit cannabis in Alberta and British Columbia between September 2018 and August 2020.

Police say Seo is one of a total of seven individuals who have been charged after allegedly laundering approximately $47 million as part of a criminal organization. His arrest came after an “extensive and complex” investigation by the FFCT to discover the laundered money.

The Federal Financial Crime Team is a specialized unit that investigates financially motivated organized crime, with a focus on anti-money laundering. FINTRAC, the CRA, the Vancouver Police Department, and the RCMP Federal Policing Pacific Region also supported the investigation.

Officers determined that the money laundering network consisted of different Alberta and British Columbia numbered companies operating as unregistered money services businesses, or uSMBs.

These companies are alleged to have received, transferred, or converted proceeds of crime through illicit cannabis sales via a variety of online cannabis stores. The investigation also found that the uSMBs within the money laundering network received tens of millions in sales through e-transfer payments. 

Through email addresses linked to these e-transfer payments, officers were able to identify eight individuals who received a total of $47 million in proceeds of crime.

The 30-year-old Seo is also alleged to have been financially compensated by the criminal organization for laundering the proceeds of crime and for concealing its origins from law enforcement, regulatory authorities and financial institutions. The man is also said to have operated two illicit cannabis-related businesses in the Edmonton and Burnaby areas.

Unregulated online cannabis stores were common in Canada prior to legalization, and continue to be some six years into the legal market. In documents released under the Access to Information Act, reports from Health Canada’s compliance department to the RCMP show requests to address illicit online sales in BC were often referred to the BC Community Safety Unit (CSU), which handles illicit cannabis sales in BC.

In 2022, BC introduced new legislation aimed at helping target illicit online cannabis stores.

Also in 2022, FINTRAC released a report that analyzed a sample of approximately 5,000 suspicious transaction reports (STRs) related to illicit cannabis activities received from March 2020 to March 2021. The majority of these reports involved the “suspected sale and distribution of illicit cannabis by way of unlicensed online dispensaries.” In addition, FINTRAC also identified STRs concerning “the suspected production of illicit cannabis.”

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