15 Jan 2021
In October 2014, Canadian intelligence leaders were invited to the U.S. Drug Enforcement Administration’s headquarters in Chantilly, Va. The DEA had a theory: the upper echelons of global money laundering, terrorism, drug-trafficking and organized crime all bleed together. And only a handful of men in this murky world of extremely powerful criminals had organizations capable of laundering more than $10 billion annually.
The DEA undercover agents had infiltrated one of them, Pakistani national Altaf Khanani. They learned how Khanani used money mules and currency exchanges across six continents to collect cash for drug cartels in cities such as Toronto and Montreal. And many of Khanani’s transactions helped arm and finance terrorist organizations including Hezbollah and Al-Qaeda.
And the DEA had some information that would shock RCMP leaders.
Canada was becoming a major funding source for Hezbollah, which is designated as a foreign terrorist organization. And a few foreign exchanges in strip malls in north Toronto played a big part in Khanani’s narco-terror banking network.
“We knew Khanani could move money out of anywhere in the world, and that he was very active in Canada,” a U.S. official who attended the meeting in Virginia told Global News.
While the DEA was eager to partner with the RCMP in targeting Khanani and Hezbollah in Canada, it was unaware of a lurking danger. It didn’t know a fast-rising RCMP intelligence analyst named Cameron Ortis was also interested in Khanani and his Toronto currency traders, for his own reasons.
RCMP investigators were joined at the meeting in Virginia by their colleagues from Canada’s so-called Five Eyes allies. The DEA’s pitch was simple. For the first time, the Five Eyes would share classified intelligence specifically to target a kingpin money launderer.
“The whole point was, you can’t have conflict zones explode overnight, without the people that fund the terrorists and move the drug money,” said a U.S. official with knowledge of the Five Eyes meeting. “And we were very interested in getting the RCMP involved because they hadn’t been working much with the DEA.”
So at the meeting in Virginia, Canada signed onto the Five Eyes joint investigation. The RCMP’s National Intelligence Coordination Centre (NICC) started to work the Khanani case, under the unit’s director-general Warren Coons.
An NICC analyst named Dayna Young was responsible for writing up Khanani reports for the Five Eyes, said a Canadian source with knowledge. Young’s reporting drilled down into a ring of currency traders in Toronto believed to be laundering hundreds of millions in drug money annually, and transferring incalculable sums between Iran and Canada via Dubai, a banking zone used by the Iranian regime to evade sanctions.
In 2016, Ortis took over NICC from Coons.
“At this point, Cameron had more access than anyone else in the RCMP to intelligence, which is a terrifying situation,” a national policing executive told Global News.
And as soon as he took command of NICC, Ortis “was extremely interested” in Young’s reporting on Toronto currency exchanges, a source with knowledge said.
So the stage was set, sources said, for what could be one of the worst intelligence compromises ever in Canada. This allegedly included Ortis offering to sell the RCMP’s special operational plans to the Khanani network in 2015, sources confirmed to Global News. And Ortis was planning to do so again in 2019, after Khanani’s network was sanctioned in 2015 by the U.S. Treasury as a transnational criminal organization with terrorist links.
After Khanani was arrested in late 2015, Ortis had continued to collect sensitive information from Young’s NICC file that he planned to provide to Khanani and his Canadian operatives, according to sources.
Young and other NICC employees launched a lawsuit in 2020, alleging Ortis had harassed them and sabotaged NICC. And RCMP investigators told Young this was all part of Ortis’ scheme to steal NICC analysts’ work to sell to criminals, the claim says.
Ortis’ lawyer did not respond to repeated requests for comment from Global News for this story.
While Canada continues to assess the extent of sensitive information Ortis may have leaked since joining the RCMP in 2007, damage caused by the Khanani-Ortis case alone is likely already harming the national security of the Five Eyes, said a U.S. official with knowledge of the Khanani investigation.
“The most damning point of this case is it creates distrust in the whole foundation of international intelligence sharing, for fighting terror and crime,” he said. “The fact that Ortis was allegedly trying to (provide intelligence to) Khanani, says it all. You have billions of dollars of money laundering tied to terrorist organizations that have killed hundreds of thousands of people. People should be saying, ‘This is unbelievable. We can never let this happen again.’”
Crown prosecutors allege Ortis revealed secrets to unnamed recipients and was planning to give Canadian intelligence to an unnamed foreign entity or terrorist organization. He currently faces eight information security charges, and a breach of trust charge.
Khanani sting plan
At the meeting in October 2014, the DEA briefed the Five Eyes on their knowledge of Khanani’s operations.
DEA agents had been tracking Khanani for years, and reported that he was tight with heroin traffickers in Afghanistan and Iranian regime leaders that sponsored terror organizations, including Hezbollah.
From his base in Karachi, Khanani ran numerous financial businesses and trading companies. He was powerfully connected in Pakistan, and also had strong banking relationships in Dubai, and access to financial institutions in Hong Kong and Mainland China.
But Khanani’s money-moving magic started with an ancient form of underground banking known as hawala.
In simple terms, a hawala bank enables a customer to deposit a sum in one country and withdraw that sum in another country, with the money never actually crossing borders. In itself, hawala isn’t illegal. But if the transactions aren’t reported, hawala can be used to conceal tax evasion, terror-financing and money laundering.
Khanani master-minded these secretive criminal transactions between a global network of currency exchange shops, the DEA found. His currency traders operated almost like a network of ATM machines, with Khanani at the centre, controlling a giant ledger of credits and debits.
So, for example, a Mexican cartel could deliver $100,000 cash to Khanani’s agent in Toronto. The deposit in Toronto would go into Khanani’s master ledger. And then Khanani would ask one of his currency traders in Mexico to pay the equivalent amount of pesos to the cartel, minus a small fee for the service.
By Sam Cooper, Global News, 14 January 2021
Read more at Global News
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