A year-long investigation conducted by the RCMP Federal Serious and Organized Crime unit in partnership with multiple government agencies determined Moxipay Corporation was operating as an unregistered money service business. The investigation revealed that dispensaries not federally licensed to produce or sell cannabis in Canada used Moxipay to transfer and receive funds.
“In this instance, we identified eight online dispensaries who engaged in supplying illegal cannabis. Moxipay was used by those entities basically to layer or launder the funds,” said RCMP Supt. Chad Coles.
“Money wasn’t paid directly from the consumers of the cannabis to the online dispensaries. That money flowed through Moxipay, so Moxipay, in essence, was facilitating the laundering.”
MORE THAN 84,000 TRANSACTIONS
RCMP said between January and December 2018, Moxipay facilitated more than 84,000 transactions where nearly $15-million was received as proceeds from the illegal online sale of cannabis.
Moxipay received the funds through e-transfer payments into several bank accounts and the funds were then laundered by Moxipay either through transfer back to the illegal online cannabis dispensaries or to their direct benefit through third-party individuals and entities.
The investigation began after information was received from a financial institution.
“(They) recognized they had some suspicious financial transactions. It was through the hard work of the investigations that identified Moxipay was being used and was associated to these various illegal online dispensaries,” Coles said.
Normally, purchasing legally online there would be a Visa or PayPal account, Coles said, which is something consumers can be mindful of.
“In instances like this with the illegal dispensaries, you’re sent to a third party like Moxipay,” Coles said. “You are transferring money to a bank account or an email account as opposed to using your Visa or PayPal.”
The front page of the sole legal online recreational website, Alberta Cannabis, is seen as Superintendent Chad Coles (left), Federal Serious and Organized Crime, speaks about the charging of a $15 million money laundering operation called Moxipay linked to illegal online cannabis sales during a press conference at K Division Headquarters in Edmonton, on Thursday, Dec. 19, 2019. Ian Kucerak / Postmedia
If someone is purchasing unregulated cannabis they could also potentially be putting their health at risk.
“There’s many instances of testing illicit products that have come back to show contaminants, heavy metals and other types of things that are dangerous to your health,” said Dave Berry, vice-president of regulatory services with Alberta Gaming, Liquor and Cannabis.
Anyone who may want to turn to illegal online sales because of delays in rolling out legal cannabis products such as edibles should be patient, Berry added.
“They should wait, quite frankly, until such time those products are available, that’s your best option to protect your safety.”
Four directors of Moxipay, Nando Covelli, 67, John Oluk, 67, Marco Bonnani, 45, Daniel Tse, 39, and an employee of Moxipay, 31-year-old Lorenzo (John) Covelli, were charged with the following offences:
- Laundering proceeds of crime
- Possession of property obtained by crime
- Trafficking in property obtained by crime
- Commission of offence for a criminal organization
The four directors were also charged the following under the Proceeds of Crime, Money Laundering Terrorist Financing Act:
- Failure to register with the Financial Transactions and Reports Analysis Centre of Canada
- Failure to identify a person
- Failure to report suspicious activity
The eight online cannabis dispensaries identified are still under investigation. In Alberta, the only legal place to purchase recreational cannabis online is through the AGLC at albertacannabis.org.
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