11/01/2011 02:40 EDT | Updated 01/01/2012 05:12 EST

RCMP officers holding automatic weapons announce $2.6 million cash seizure

VICTORIA - RCMP officers holding automatic weapons stood guard over $2.6 million in U.S. currency Tuesday as they announced one of the biggest cash seizures in Canadian history.

RCMP border officials said they fished a suitcase full of money out of the harbour near Victoria and arrested a 44-year-old Vancouver Island man after spotting a small boat heading in the direction of the American border last March.

The Mounties told a press conference the five-metre rigid-hulled inflatable vessel, detected on March 24 just before midnight, was moving at high speed in waters near Sidney, about 25 kilometres south of Victoria, towards the nearby U.S.-Canada border.

RCMP Supt. Derek Simmonds, the officer in charge of E-Division's Border Integrity Program, said the ocean waters between Sidney and nearby Washington State islands are a known route for smugglers and a marine patrol was monitoring this particular boat.

"As the RCMP closed the distance on the suspicious vessel, a suitcase was thrown overboard by the lone occupant," said Simmonds. "The RCMP boarded the vessel in Canadian waters near Swanson Channel about two nautical miles from the Canada-U.S. border and also retrieved the suitcase which was found to contain $2,625,280 in U.S. currency."

Simmonds said the U.S. cash was wrapped in plastic.

"It is one of the largest RCMP seizures of currency in Canada," he said.

Simmonds said U.S. Coast Guard officials were also made aware of the suspicious vessel on March 24 and were preparing join the investigation.

"As you may suspect, moving currency or contraband in large sums like this is a common identifier for the work of organized crime," said Simmonds. "Our investigation is not over."

Forty-four-year-old Jeffrey Melchior of Lake Cowichan, B.C., faces charges of possession of property obtained through crime and money laundering, said Simmonds.

He is scheduled to make his first court appearance on Nov. 21 in Victoria.

The RCMP's Border Integrity Program and Federal Integrated Proceeds of Crime continue to be involved in the investigation, Simmonds said.

He said U.S. officials from the U.S. Department of Homeland Security, The U.S. Coast Guard, U.S. Drug Enforcement Administration and the U.S. Secret Service are also working and sharing information with the RCMP as the investigation progresses.