Casino Money Laundering Vancouver
High-rolling VIP gamblers from China are suspected of walking into River Rock Casino and Resort and laying down buy-ins — sometimes in excess of $500,000 and much of which is unsourced — to wash their proceeds of crime, according to an independent review of anti-money laundering practices in B.C.
The previously suppressed report on money laundering at the Rock, by accounting firm MNP, was released to media Friday by Attorney General David Eby, following a Vancouver Sun investigation.
The Cullen Commission of Enquiry into money laundering in British Columbia has illuminated just how frustrating it is for investigators trying to do their jobs and to do the right thing. It’s a clear example of when the investigative will meets the “bureaucratic won’t.”. The inquiry, created to determine whether corruption allowed money laundering to take root in B.C. Casinos, has heard that transactions of $100,000 were common in Vancouver-area casinos a decade ago. A whistleblower who claims he saw evidence of organized crime and money laundering in B.C.' S casinos is speaking out. W5's Kevin Newman investigates how deep.
“I received a series of briefings that caused me to believe that our province could do more to combat money laundering at B.C. casinos,” said Eby, who will now hire an independent review of anti-money laundering practices after MNP cited concerns as to how B.C. Lottery Corporation has been tackling the matter.
In one month (July 2015), the casino accepted $13.5 million in $20 bills alone.
“River Rock staff [members] have fostered a culture accepting of large bulk cash transactions.
“The issue of casinos, [River Rock] in particular, accepting large volumes of cash has now been a growing issue in the province for a number of years,” noted the report.
Pertaining to the irregular cash transactions, BCLC said it will await instruction from Gaming Policy Enforcement Branch (GPEB), the provincial regulator, and the Ministry of Finance as to how it may reform in the wake of such revelations.
Casino Money Laundering Methods
Richmond North Centre MLA Teresa Wat, whose riding includes the casino, did not respond to Richmond News inquiries but former BC Liberal Finance Minister Mike de Jong, told the Sun the July 2016 report was kept confidential for investigative purposes.
Former Mountie Peter German described Vancouver-region casinos as “laundromats for the proceeds of organized crime,” in an explosive report to the B.C. It has meant dirty money obtained.
Meanwhile, casino operator Great Canadian Gaming Corporation said in a statement it complies with present regulations set forth by the GPEB and FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) and welcomes new regulations.
Nevertheless, MNP — which notes it’s difficult for casinos to source cash from Chinese nationals — describes holes in the system.
MNP Interviews with casino and BCLC staff members confirmed there are “reasonable grounds to suspect money laundering” via unsourced funds, which are largely coming from wealthy non-residents and local business persons with interests in Vancouver and China.
“While the patron may be bona fide, the unsourced cash being accepted by the casino may be associated with criminal activity and poses significant regulatory, business and reputational risk,” noted MNP.
And the casino itself was found by MNP, during a two-year review period (2013-2015), to have filed relatively few suspicious transactions (1,194) compared to the number of large cash transaction records (41,187).
Casino workers may be “desensitized” to the anti-money laundering regime and communication between managers and VIP hosts, who handle the large cash transactions, was found to be problematic. MNP found 36 “high risk” players identified by law enforcement as also being on the Top 100 list of players by cash volume.
MNP stated it would be useful for BCLC anti-money laundering online training to be in the Chinese language (and not English) of “the high risk exposed employees,” however BCLC said it would not change its language requirements, as to avoid confusion.
The report notes there is “inherent conflict” between the regulators, who seek to ensure the integrity of gaming, BCLC, which rakes in most of the profits for government coffers and casinos, which work on commission.
Richmond residents reap massive property tax savings as the City of Richmond receives 10 per cent of annual, net profits from the River Rock. Over the past 10 years, the city has received $153.7 million. If the casino’s $17.6 million cheque for 2016 was deducted, property taxes would soar an estimated 8.8 per cent. At one point, in 2015, council had to review how it distributes the money because there was so much of it.
Laundering Money Definition
But it comes at a cost, according to the International Monetary Fund, which has cited Vancouver as being at the crosshairs of money laundering and real estate speculation.
“There are cases of Chinese officials laundering the proceeds of crime through the real estate sector, particularly in Vancouver, and the Chinese government has listed Canada as a country that it wishes to target for recovering the proceeds of Chinese corruption,” noted a 2016 IMF report.
VANCOUVER — Larger amounts of suspicious cash with suspected links to money laundering and organized crime began showing up at British Columbia's casinos while the province prepared to host the 2010 Winter Olympics, a former gaming regulator told the inquiry into money laundering.
Larry Vander Graaf said Thursday there was an increase in suspected illegal money at casinos at the same time the RCMP was planning Canada's largest-ever security effort to police the Olympics in Vancouver and Whistler.
Vander Graaf, a former executive director of the B.C. Gaming Policy Enforcement Branch, said while serious dirty money concerns were mounting at casinos, police were also working on Olympic security.
'You have to remember the time frame, too,' Vander Graaf testified.
'In 2007, 2008, 2009 there was the biggest security endeavour in Canadian history going on in Vancouver, the 2010 Olympics. The preparations for the 2010 Olympics was significant and the RCMP was tasked with that.'
He said he wasn't making excuses for the police, but staffing issues at the RCMP's now disbanded Integrated Illegal Gaming Enforcement Team were 'evident.'
Vander Graaf, who said he was fired in 2014 by the B.C. government, said the suspicious cash started appearing at casinos in 2007 and three years later it reached the point where loan sharks connected to organized criminals were waiting in parking lots with bags packed with $20 bills.
'It was like a drive-in,' he said. 'There's no question, where there are loan sharks there was money laundering and when the money laundering picked up, the loan sharks activity picked up.'
The B.C. government launched a public inquiry following several reports that concluded hundreds of millions of dollars in illegal cash was impacting B.C.'s real estate, luxury vehicle and gaming sectors.
Vander Graaf said his agency wanted limits put on the amounts of cash in $20 bills being used at the casinos to buy chips but the Crown-owned B.C. Lottery Corp. did not impose a limit.
'The integrity of gaming was being compromised and we feel we had to take action,' he said.
'I still believe to this day ... when we have the integrity of gaming being impacted by large cash infusions that are in $20,000 bundles with elastic bands around it, that there should have been action in relation to stopping that at the casinos.'
Vander Graaf said the lottery corporation did not make a cash amount order because it could not be proven beyond a reasonable doubt that the money was from proceeds of crime or money laundering.
Last week, Fred Pinnock, a former RCMP officer in charge of the now disbanded illegal gaming enforcement team, testified a member of the B.C. legislature told him in 2009 the province's gaming minister was focused on revenues being generated at casinos, not organized crime.
Vander Graaf's testimony is to continue Friday.
— By Dirk Meissner in Victoria.
This report by The Canadian Press was first published Nov. 12, 2020.
The Canadian Press