Recently, Daniel Renaud from La Presse + wrote a newspaper article entitled “How organised crime adapted to the pandemia”.

Further to this reading, it reminded me of some cases where our team dealt with such files.

Organised crime and professional fraudsters

As per the C. D. Howe Institute, in 2019, the money laundering was estimated between $110 and $ 130 billions per year in Canada. Canada is well known as a tax haven for these illegal activities. The organised crime and professional fraudster can create or buy legit companies into which they invest large amounts of money. As you might know, these companies are often dealing in the construction, restauration, real estate and retail store businesses as well as in the manufacturing and food industries. They benefit from hard economic times like a world-wide pandemic to invest in import/export operations doing, for example, business with various government levels.

Our insurance world is as well victim of such illegal activities.

Numerous of our files as well in commercial or residential insurance claims revealed the involvement of members of such criminal organisations to money launder illegal revenues. In some cases, even though the claim is legit, the moral risk is sometimes doubtful and fraudulent. Our investigations feed the underwriting services with factual information allowing the insurer to either cancel or void “ab initio” an insurance policy.

A judgement still being used as jurisprudence

In some other cases, we successfully proved the involvement of fraudsters or criminal organisations using nominees to act on their behalf. We have dealt with such various cases over the last years. It reminds me of a specific file which was heard by Honorable Pierre-C Gagnon, S.C.J. in the civil case (500-178-037231-076) where our client’s defense was agreed by the court. In this specific case, the judge commented the doubtful source of the financial funding, the involvement of a non-conventional mortgagee and non-reliable financial statements. He concluded to the insured’s bad faith and this judgement is still currently being used as a jurisprudence.

Our investigations broadly cover an insured operation to get a complete view from the initial funding or purchasing of an insured’s property to the underwriting and the circumstances of the loss.

We always agree with our principals on the future handling strategy before investigating such doubtful losses and keep them informed punctually of all our findings. In all cases, a speedy involvement is mandatory to collect all the facts, either objective or subjective, to appreciate the insurance risk either moral or physical.

In conclusion, DRL’s expertise is at your service!

By Pierre Lessard, PAA, President