First, all major banks have Anti-money laundering procedures in effect. After the UK underground bomb attack the 5 major banks have started a process by which they track all transactions above $5000 that may be suspicious. What constitutes a suspicious transaction? thats the second part.

Any money going into or going out of a bank account without a valid reason or a transaction between unrelated parties is suspicious. For example: if someone who is not your family or friend pays your credit card bill - it amounts to money laundering.

Canadian banks are so serious about this that every employee of a bank has to take the anti-money laundering test to prove that he/she is following the bank's code of conduct. Also, most banks have a global risk policy that goes beyond suspicious transactions.

However, in the interest of their business and to protect their image banks will not directly report a suspicious transaction. They comply with the laws by giving CRA access to their database. The CRA in turn has business intelligence software that monitors the bank's database. It is easy to monitor transactions in Canada because all major banks have the same platform called COINS that runs on Unix.

I'll give you an example, an employee of a well known immigration firm in GTA was recently booked under AML, she was taking cash/cheque payment from clients and processing their payments on her credit card to earn airmiles. She narrowly escaped after much explanation and cancellation of her credit card. Her primary bank went a step furher and closed all her accounts. Now she has no bank account and bad credit. It will take 7 years to delete the derogatory remarks on her credit record and she cant apply for any loans/mortgages till then.

There are some exceptions. When someone borrows money to get a statement for visa purposes - its ok. Because banks' CRM software easily recognizes such cases and ignores them.

If you are so keen, you may want to try your luck with icici/ing or any other schedule II/III bank in Canada. But be careful because these foreign banks are vying for premium Canadian business and will not take chances with the CRA.

I would suggest other options like starting a business and showing losses... etc. I f you register a company you could do a lot of tricks and go unnoticed.

Anyway best of luck in your efforts, atleast you have the money to play with

Very well written TO -Puttar.

Schedule A catagory banks are very strict in this matter and can go upto any extent. One of my client made several transactions in a month from his personal line of credit/loan and credit card to his incorporated business account and vice - versa. He had personal and business accounts with the same bank and got caught. Bank immediately closed all of his accounts and asked him to repay all loans and line of credit back. No excuse worked out in his favor.

Members/readers be careful.

-----------------------------------------------------------------
Live and Let Live. Together we can make a difference.

DP JAIN, CPA, CGA, CPA (US), CA(I), LL.B.(I)
416-305-0080
(Loans, Mortgage, Tax, Accounting, Investments)