Tuesday, December 6, 2022

Canada: Report finds billions likely laundered at B.C. casinos; inquiry calls for new provincial watchdog | Yogonet International

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A final report into money laundering in Canada’s British Columbia has faulted senior provincial government ministers for being warned about incredible growth in suspected laundering of criminal cash in the government’s casinos but failing to ensure such funds “were not accepted.” Results have now prompted the B.C. inquiry to call for a new provincial watchdog.

Commissioner Austin Cullen found that former premier Christy Clark and former B.C. Liberal gaming minister Rich Coleman were among the senior elected officials and the B.C. Lottery Corporation managers who failed to stem suspected criminal proceeds that were flooding into B.C. coffers, reports Global News.

In some cases, the officials ignored repeated and escalating warnings, the Cullen Commission’s final 1,800-page report found, released on Wednesday. However, the Commissioner said there was no evidence that politicians’ failures to act were motivated by corruption. Failures of federal Royal Canadian Mounted Police and Fintrac -Ottawa’s AML agency- also allowed money laundering to grow.

The report details the stunning growth in cash transactions into provincial casinos that investigators first flagged in 2008. These transactions continued unabated until at least 2014, when casinos accepted CAD $1.2 billion ($928,000) in cash transactions that were CAD $10,000 or more, many of them delivered in bricks of cash and duffel bags, thus matching indicators for criminal cash

“Sophisticated criminals have used B.C. as a clearing house to launder a vast amount of money,” Cullen said in media interviews after his report was released, according to the cited source. “This is fundamentally destabilizing to the economy we want for our province.” 

Cullen also found that B.C.’s economy -including casinos, real estate, banks and law offices- faces big money-laundering risks, with the report calling Fintrac’s reporting regime essentially wasteful. The inquiry also found RCMP’s lack of attention as a key factor allowing for the unchecked growth of money laundering “since at least 2012.”

Cullen has thus called for B.C. to establish a dedicated provincial money laundering intelligence and investigation unit and appoint a commissioner to oversee the government’s approach to the problem, according to CBC.

“For too long, money laundering has been kept on the sidelines,” Cullen told reporters, saying the public was right to be suspicious about the lack of response to the money-laundering threats. “It’s time for that to change.”

“If the province is to achieve success in the fight against money laundering, it must develop its own intelligence capacity in order to better identify money laundering threats,” the report reads. The proposed AML commissioner would be a new, provincially established agency responsible for tracking how Cullen’s recommendations -a total of 101, covering areas from law enforcement to real estate and banking- are put in place.

The B.C. Lottery Corporation said it will review the report

Cullen was first appointed to lead the inquiry in 2019, following reports of illicit funds washing not only through the province’s casinos but also the housing and luxury car markets. The final report comes after testimony from nearly 200 witnesses, and while Cullen said it is impossible to determine an exact dollar amount for the money laundered, he put the amount in the billions.

During the inquiry, Cullen heard that money laundering involved loan sharks delivering bundles of CAD $20 bills that had been packaged consistently with the proceeds of drug trafficking to high-profile gamblers who had traveled primarily from China to Canada to play baccarat in secluded areas of the casinos, further reports Global News. The foreign high rollers often paid back the loan sharks the funds they gambled via transactions in China and Hong Kong.

An investigation in 2010 into B.C. casinos where this type of money laundering was occurring said at the time that River Rock Casino in Richmond and the Starlight Casino in New Westminster were targeted because they were “a very significant source of money-laundering activity, using wealthy People’s Republic of China gamblers as willing pawns in their activity.” However, this investigation was canceled in 2012, after the federal government cut funding.

The B.C. Lottery Corporation has said it will review the report and work with the government to respond to recommendations. In a statement, chief compliance officer Marie-Noelle Saovie said that BCLC hopes to build off the significant work it has done in recent years to protect casinos in the province from financial crimes.



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