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Investigation leads to three arrests in counterfeit transit token operation

FBI agents in Niagara Falls recovered $1 million (Canadian) in counterfeit subway and bus tokens for Toronto's public transit system.

The recovery, a sting operation and three related arrests are part of an ongoing investigation into a severe counterfeiting problem involving the Toronto Transit Commission, authorities said Friday.

"Since late 2004, it is estimated that this counterfeit token operation produced five million tokens -- representing a loss of approximately $10 million in Canadian funds," said Peter A. Ahearn, special agent in charge of the Buffalo FBI office. "We've heard that 40 percent of the tokens being used on the Toronto system are counterfeit."

For the past two years, many Toronto transit customers have been buying the tokens at bargain rates, Ahearn said. The FBI believes the tokens were made by a company in Massachusetts, shipped to Niagara Falls and then distributed from there.

After investigators learned where the tokens were being made, the Massachusetts company agreed to provide 500,000 of the fake tokens to police for use in a sting operation.

The fake tokens, watched closely by police, were shipped to Niagara Falls, and investigators observed to see what would happen next.

On Thursday afternoon, a North York, Ont., woman allegedly picked up 80,000 of the tokens at a Niagara Falls car wash. Federal agents charged her with conspiracy to commit mail and wire fraud. Andrea Dawson, 30, who said she is a psychotherapist, appeared briefly to answer the charges Friday before U.S. Magistrate Judge Hugh B. Scott.

Assistant U.S. Attorney Gretchen L. Wylegala said at least two other people were arrested in Toronto, and a Niagara Falls man is under investigation for his alleged role in the scheme.

Federal agents exercised search warrants at apartments at 404 Seventh St. and 5A Centre Court in Niagara Falls. Between those searches and the Dawson arrest, agents seized 500,000 fake tokens, Ahearn said.

Members of a Jamaican street gang in Toronto are believed to have distributed the tokens, the FBI agent said. He said the Niagara Falls man, whose name has not been released, is believed to have acted as "a broker and middle man" for the transactions.

"The investigation is continuing," Wylegala said.

The FBI and U.S. Homeland Security immigration and customs agents worked on the case with the Niagara Falls Police, the Niagara County Sheriff's Department and four Canadian police agencies.

"It's a classic case of cooperation" between American and Canadian police agencies, Ahearn said.

Ahearn said he does not know if any Toronto commuters will be prosecuted for illegally using the bogus tokens. He added that he does not know if the Massachusetts company knew it was producing tokens that would be used illegally.


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