B.C. is investigating possible money laundering in Lower Mainland casinos. (Black Press files)

Money laundering in B.C. casinos was a ‘collective’ system failure: report

Illegal activity hurt Vancouver real estate, spurred on crime on region’s streets

A scathing independent report released Wednesday paints a “troubling picture” of governments that “turned a blind eye to money laundering” in B.C. casinos.

The 247-page report called ‘Dirty Money’ was written by former RCMP deputy commissioner Peter German, who said that years of money laundering brought the gaming industry into disrepute.

Attorney General David Eby commissioned the report after laundering was brought to the forefront earlier this year when news reports uncovered large-scale criminal activity in the province’s casinos.

German said the problem came to an “apex” in 2015, when a Vancouver-area casino accepted $13.5 million in $20 bills over a one-month period.

“Nobody said no. Nobody said to not accept this money unless you know where it came from,” Eby said.

However, despite that and a 2011 report highlighting the issue, German said no action was taken.

“The failure to take action allowed money laundering to proliferate in B.C. casinos,” German said.

“Little was done to prosecute despite abundant evidence of a serious problem.”

German said that although it’s hard to get a grip on the sheer scale of the problem, well over $100 million is believed to have been laundered through B.C.’s casinos.

The former cop provided 48 recommendations in his report. Eby said that he’s already moved on implementing one-fifth of the recommendations, and is working on implementing 15 more.

German’s recommendations include bringing in a “specialized gaming police force,” bring in a new independent regulator and that casinos not accept cash unless they know where it came from.

In January, the province announced that all cash, bank drafts and certified cheque buy-ins worth $10,000 or more have to be accompanied by a receipt showing the financial institution, branch number and account number the money came from.

READ MORE: Cash rules tightened for B.C. casinos

READ MORE: B.C. casinos must declare cash deposits in new rules over money laundering

German pointed out that anyone, including casino operators, should know that anyone coming in with “$200,000 in $20 bills wrapped in elastic bands” was likely not up to any good.

“That is not how the bank issues stacks of cash,” he said.

German said that money laundering is not the “victimless crime” that past politicians believed it to be.

He pointed to money he said was parked in Vancouver real estate, as well as the gun- and drug-trafficking-related violence in Lower Mainland cities.

“Money laundering is the modern face of organized crime. It is the underbelly of the violence we see on our streets,” German said.

“We know that the same people who arrange for money to be laundered in casinos were buying real estate.

Eby pointed to opioid crisis, which claimed more than 1,400 lives last year, as a price B.C. has paid for allowing money laundering to continue.

But German said that although some organized crime has foreign root, much of it also begins domestically – and that B.C. residents are often the ones buying the illegal goods.

“Who is the drugs? It’s people in this province buying the drugs.”

German said that the attention placed on casinos in the past few years has seen organized crime shift away from casinos.

“What we don’t know is where it went. What vehicle is currently being used to launder drug cash in Metro Vancouver?” German said.

He asked the province to call on Ottawa to update legislation to track commodities like luxury cars and boats, which can also be used to launder money.

The Attorney General placed the blame for lack of enforcement at the feet of the former BC Liberal government.

“It’s not like people weren’t aware, it’s not like people weren’t notified,” he said.

“In my opinion, responsibility lies with government and that government has been removed.”

The BC Liberals did not immediately return a request for comment.


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