Casino Money Laundering Canada
Between 2012 and 2015, a reported $100 million and as much as $2 billion may have been laundered through British Columbia casinos. In the words of one report, law enforcement “went looking for a minnow and found a whale.”
Money Laundering Through Casinos
Early reports suggested that Chinese high rollers—“whales” in industry parlance—may have washed some $1.7 billion in currency through patron gaming accounts (PGAs), with one VIP said to have personally pushed through $200 million. Alarming surveillance images showed alleged couriers lugging sacks of $20 bills, which one report called the preferred currency of the drug trade. Lurid headlines called out a “rat’s nest of rot” and suggested that the dirty money originated in the deadly opioid epidemic.
But gaming regulators and others in the industry say the problem of money laundering, at least as it involved casinos, was resolved years ago.
“These things are not going on today,” said Paul Burns, president and CEO of the Canadian Gaming Association, in an interview with GGB News.
Loto-Quebec, a provincial Crown corporation that operates the casinos, including Casino de Montreal, said in a statement last week that it actively works to fight money laundering and has procedures in place to ensure it complies with all regulatory requirements.
- Lottery Corporation’s one-time director of anti-money laundering and investigations faced a grilling from a government lawyer Friday over the lack of action on suspicious cash.
- Dirty money is not a problem strictly in casinos. John Lehmann/Globe and Mail/The Globe and Mail This week, British Columbians learned the price paid by ordinary people for money laundering.
Burns said casinos in British Columbia and the British Columbia Lottery Corp. that oversees them reported suspicious transactions as required, passing the ball to law enforcement and fulfilling their legal responsibility.
The casinos “filed all necessary reports,” said Burns. “They were never sanctioned or fined by FinTRAC (the Financial Transactions and Reports Analysis Centre of Canada) during the period in question or subsequently.”
According to Burns, FinTRAC “performs regular audits and never found deficiencies in any of the casinos’ or BCLC’s reporting.”
In May, Premier John Horgan established the Commission of Inquiry into Money Laundering in British Columbia, led by BC Supreme Court Associate Chief Justice Austin Cullen. The Cullen Commission is looking at the full scope of money laundering in the province—in real estate, banking, and the corporate and professional sectors, and will “examine regulatory authorities and barriers to effective law enforcement of money laundering activities.”
In effect, its charge is to send the rats running. The task force must submit its initial findings by May 2021.
Toronto-based gaming law attorney Michael Lipton of Dickinson Wright LLP rejected the suggestion that money laundering is rampant in BC casinos, and agrees that the onus was on law enforcement to act on suspicious transaction reports that were duly submitted by casinos.
“There’s no evidence I’ve seen that money laundering is more widespread in Canada than in any other jurisdiction,” he told GGB. “I don’t believe the systems, processes and controls in Canada are anything but top-notch—that’s not to say that they can’t be enhanced, but it is just a matter of being very dogged and ensuring that people comply with those laws and controls.
“In this instance,” he said, “I think there was a failure by some of the law enforcement authorities and regulatory individuals.” He added that the activity was “centered in a couple of casinos in the province, which is indicative it was not endemic to the whole province.”
Burns agreed. “One of the most important issues I think the public inquiry needs to explore is why were there no charges and little action taken by law enforcement,” he said. The subject “makes for salacious headlines but look at it deeper the casino industry was taking action supplying information to the Royal Canadian Mounted Police but saw a couple charges not much action on law enforcement.”
In essence, casinos may have served as the canary in the mine, alerting BC lawmakers to a problem that was widespread in other cash-driven businesses such as high-end jewelry, luxury car sales, and real estate. According to a May report by CBC News, an estimated $5.3 billion worth of real estate transactions in B.C. last year were the result of money laundering, driving a 5 percent rise in housing prices, particularly in Metro Vancouver.
Patrick McGowan of the Cullen Commission was noncommittal about the issue, saying only, “There is a widespread belief that money laundering is well-established and wide-ranging in British Columbia, and in part because of this perception the inquiry was called.”
According to an email sent to GGB from the Ministry of the Attorney General of British Columbia:
“Our government is committed to keeping dirty money out of B.C. and has taken immediate action to identify and disrupt money laundering activities in our province. Here are some highlights of how we are tackling this issue:
Casino Money Laundering Canada Exchange Rates
- B.C. has put in place world-leading legislation with Canada’s first public registry of beneficial owners and interest holders, ending hidden land ownership in real estate.
- We’re working on major amendments to the Securities Act to improve BC Securities Commission’s fine collection and enforcement abilities. We expect to see legislation coming soon.
- The province is also now requiring a receipt to show the source of funds for any transaction in casinos of $10,000 or more. Unsourced cash over $10,000 is refused.
- We have also made it easier to seize the proceeds of crime by updating our civil forfeiture legislation. This makes it more difficult for organized crime to hide their assets.
- Another step we have taken is hiring additional casino investigators to ensure we have an enhanced presence at Lower Mainland casinos during peak hours.
- We are holding a public inquiry into money laundering that will help uncover who knew what when, and who has profited from money laundering in our province. This decision is backed by overwhelming public support from British Columbians, municipalities and unions.”