A former Toronto police officer, Ganesh Balaganthan, is facing scrutiny for his involvement in a money laundering scheme that helped scammers launder $1.7 million. The Ontario law society tribunal found that Balaganthan was "willfully blind to fraudulent activity" when he assisted in the laundering of funds stolen from the City of Surrey, British Columbia.

Balaganthan, who resigned from the Toronto Police Service at age 40 to pursue a law degree in England, failed to adequately vet his first client, Sung Hyang. Hyang hired Balaganthan to draft a joint venture agreement intended to launder part of a $2.1 million sum that had been fraudulently obtained from Surrey. The tribunal's chair, Paul Aterman, noted that Balaganthan was inexperienced and naive, but also pointed out that he was aware the transaction was suspicious yet chose to ignore it.

In 2019, the City of Surrey was defrauded of $2.1 million through a phishing scheme that tricked officials into routing funds to the wrong account. The money was subsequently deposited into an escrow account managed by an Ontario paralegal, who was part of the laundering effort. Balaganthan's involvement began when Hyang approached him to draft a joint venture agreement for four parties interested in purchasing shares in a company. Balaganthan was to receive a fee of $1,500 and an additional one percent of the transaction's value if it was successful.

However, the deal fell through, and instead of terminating his involvement, Balaganthan transferred $1,738,287.10 into his newly opened trust account at Hyang's request. This deposit was the first into his trust account and was part of the fraudsters' attempt to launder the stolen money. The tribunal found that Balaganthan used these funds to pay various parties involved in the failed share transfer, which constituted a banking service unrelated to legal services.

When bank investigators alerted Balaganthan to his participation in the money laundering scheme, he cooperated fully in the recovery of the funds. Despite this, he maintained that he did not commit any misconduct. The tribunal noted that Balaganthan had no specialized training in financial crime or fraud during his 14 years with the Toronto Police Service.

Balaganthan's personal circumstances were also considered during the tribunal's deliberations. He had faced significant health challenges, including a heart condition and the emotional toll of his eldest son's terminal brain cancer diagnosis. These factors contributed to his argument that stress impaired his judgment, leading him to be misled by the fraudsters.

The tribunal acknowledged that personal stress may have affected Balaganthan's ability to analyze the situation critically. However, it concluded that he should have recognized the numerous red flags associated with the transaction. The tribunal identified a dozen warning signs that indicated Hyang was using Balaganthan to facilitate the laundering of stolen funds.

Ultimately, the tribunal determined that Balaganthan knowingly assisted in the fraudulent scheme. It reported that nearly all of the stolen $2.1 million was recovered, with only about $78,000 remaining unaccounted for. The bank opted not to pursue legal action against Balaganthan. A penalty hearing for Balaganthan is scheduled for a later date.