B.C. casinos the site of 'large-scale money laundering,' report finds
Published Wednesday, June 27, 2018 7:51AM PDT
Last Updated Wednesday, June 27, 2018 3:22PM PDT
British Columbia’s casinos unwittingly served as laundromats for dirty cash coming from international organized criminals for years, according to a highly anticipated report released Wednesday.
Meanwhile provincial laws couldn’t keep up with criminals’ evolving tactics, strategies to try and reduce huge cash buy-ins weren’t working, and an outgunned anti-money laundering unit wasn’t even working evenings and weekends, the report’s author, former RCMP investigator Peter German says.
German is recommending that the B.C. Lottery Corporation stand down some of its anti-money laundering efforts and that the province create a brand new regulator with its own police force, to combat what has been deemed the “Vancouver model” of money laundering.
“We know that the same people who arranged for money to be laundered in casinos were buying real estate. We know that the real estate was being used for large illegal gaming houses,” German said at a news conference.
German recommended the province research the vulnerability of B.C.’s real estate, luxury car and horse racing sectors to organized crime.
“This is tied to the opioid crisis that has taken thousands of people from their families and is linked to the real estate crisis,” B.C. Attorney General David Eby said at the press conference.
And fear of disturbing the $1 billion per year casinos bring into the provincial treasury was one thing frustrating previous attempts at cracking down, Eby said.
“For years the government turned a blind eye,” Eby said. “Nobody said no to taking this money. And that is inexcusable.”
In 2009, the previous Liberal government cancelled funding for a dedicated RCMP anti-money laundering unit that looked at gambling.
By 2011, the German report says, an internal provincial report sounded the alarm about the rise of money laundering in casinos.
A video played at the news conference shows shady figures taking money into casinos with shopping bags, and dumping out stacks of $20 bills onto the cashier counters. One video shows it took 13 minutes to count all the cash.
News reports, including those from CTV News, raised questions about how it was possible to accept hundreds of thousands of dollars in unsourced cash in one go.
By 2015, another B.C. internal report warned there were $13.5 million in cash accepted at the River Rock Casino in just one month.
According to disclosures, at one point the River Rock Casino accepted nearly half a million dollars in a single buy-in – mostly of $20 bills.
A strategy to devise an alternative to cash buy-ins “was a failed strategy for one simple reason,” German says. “Organized criminals are not looking for cash alternatives. They want to launder cash and we now know they continued to do precisely that, and with vigour.”
On top of that, the report says BCLC was left to be its own regulator of money laundering, while gaming employees were “receiving contradictory directives and constantly witnessing the dysfunction that exists between BCLC and” its regulator, the Gaming Policy and Enforcement Branch.
Meanwhile anti-money laundering software used by BCLC “has not met expectations and the AML staff must resort to manual systems to perform analytical functions.”
The new regulator should be an crown corporation, with a board of directors and a registrar, which itself has a “designated policing unit” like the Ontario Provincial Police’s Casino Bureau or the Nevada GCB Enforcement Division, German says.
German says that many of the high limit gamblers who used dirty money to feed their gambling activities were “dupes.” Others were simply attempting to remove their own money from China, in order to make a life for themselves in Canada, he says.
B.C. Liberal MLA Jas Johal, who was elected in 2017, defended his party’s record.
“At the end of the day, our actions in 2016 did reduce this problem by almost 60 per cent,” he said.
How much was laundered? asks German. Hard to say -- but the total could be higher than $100 million. "We know that the epicenter was the river rock casino in Richmond but no large entity was untouched," he says.— Jon Woodward (@ctv_jon) June 27, 2018