Money Laundering Investigation

As many of you will have heard, Melanie Mark, the Minister of Advanced Education in BC, has asked colleges and universities in British Columbia to provide to her our policies on how we handle large cash payments and refunds. Many news outlets have carried this story. We are being asked to do this because a study recently completed by Peter German, a retired RCMP member, alleged that colleges and universities have been receiving large cash payments from students, presumably for tuition and fees, and then refunding those monies when the students withdrew. This practice could make money laundering possible.

The university I work at has had a policy for some time now that limits the amount of cash we will receive to a maximum of $500, and we don’t allow refunds in ways that might leave us vulnerable to money laundering schemes. Our Manager of Student Finances is aware of the potential to launder money and we have managed student payments and refunds in ways that limit the possibility for this to occur. We have numerous legitimate ways to receive tuition and fee payments other than cash and we provide assistance to students to help them set up and use these approved methods.

For example, quite a few years ago the Manager noted some suspicious activity that looked like an attempt at money laundering. A person from Viet Nam applied to be a student and, before he was even accepted, tried to make a payment in excess of $50,000. He withdrew the next day and contacted us for a refund. We had not even accepted him as a student yet, and so we had not accepted his payment. We denied his application and payment and never heard from him again, to no one’s surprise.

Numerous schools in BC no longer permit cash payments. They presumably have their reasons, but I believe it is a little unreasonable to say no to any cash payments. We allow them to pay in cash for small incidentals, such as a library fine, a transcript request, or other fees that come up.

It’s important to remember that most of our students have relatively little experience handling complex financial transactions, so our staff are trained to provide them with assistance. And it’s important to remember that there are very few people who will try to launder money. As the report by Peter German noted, organized crime will exploit any opportunity they find, so I am glad that our government is being vigilant and keeping the education sector accountable on this matter.

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