B.C. money-laundering crackdown is just the first step, A-G says; Eby asks expert for report on what crimes are leading to funds moving through casinos, and where the cash goes after

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December 7, 2017.  Globe and Mail.  Author: Justine Hunter.  As quoted in the article: Measures taken this week to crack down on money laundering in B.C. casinos are just the first, preliminary swipe at the problem, Attorney-General David Eby says.

This week, an independent expert retained by Mr. Eby confirmed there are large, suspicious cash transactions washing through casinos in the lower mainland. But the scale of the problem and the extent it reaches into the wider economy – such as real estate, drug trafficking or tax evasion – are still under investigation.

What he wants from Peter German, the former deputy commissioner of the RCMP and Correctional Service Canada tapped by Mr. Eby to guide a solution, is an explanation of where illicit money is coming from and where it is going.

“There are two questions that I have about the money that’s coming into B.C. casinos in the form of these massive transactions involving piles of $20 bills. … What was the crime or the activity that generated this money in the first place?

And then afterwards, once it passes through the casino and out the other end, where does it go? Is it affecting other areas of our economy, is it linked to other areas of our economy?” Concerns about money laundering in B.C. were sparked by a report from the province’s Gaming Policy and Enforcement Branch (GPEB) that $13.5-million in $20 bills was accepted at the Great Canadian Gaming Corp.’s River Rock Casino in Richmond, B.C., in July, 2015. The department discovered that money from unknown persons that could not be traced was dropped off for patrons at the casino or just outside casino property at odd times, generally late at night.

During debates in the House this fall, NDP MLAs noted that the Crown agency that manages the gambling sector, BC Lottery Corp. (BCLC), earned notoriety as the only provincial gambling body to be fined by the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) for a “persistent and chronic failure to comply with the law” because of unreported suspicious or large transactions at casinos.

(That fine, imposed in 2010, was appealed and set aside this year, after BCLC agreed to make changes to ensure compliance.)

During the first session of the new government, NDP MLAs denounced the Liberals for inaction on the file when they were in government, saying B.C. is gaining a reputation as a “gangsters’ paradise.”

Bob D’Eith, the MLA for Maple RidgeMission, told the House the flow of illicit money through casinos in B.C. was well known and required earlier intervention.

“If the money-laundering scam is linked to the international drug trade, then the previous government’s failure to act on the findings and recommendations of the [GPEB] report could be seen as not only allowing our publicly administered casinos to launder drug money, but also allowing the drug trade in fentanyl to continue and flourish in British Columbia,” he said.

Liberal MLAs defended their record.

Andrew Wilkinson, who served briefly as the minister responsible for gambling, told the House that the industry in B.C. “is very tightly regulated.” He said the Liberals didn’t disclose more about what was going on because the “release of information to the public could have and may have jeopardized investigations, which, of course, none of us want to see happen.”

But Mr. Eby has been saying all week that he was shocked, as the new AttorneyGeneral, to learn about lax enforcement and oversight.

In response to interim recommendations from Mr. German Tuesday, Mr. Eby has promised to boost the presence of government regulators in the eight largest casinos in the lower mainland, and to impose requirements for high rollers to disclose the source of their money.

Mr. Eby said the additional regulatory officers should be in place early next year.

Terrance Doyle, chief operating officer of Great Canadian, said in a statement that his company will work to implement the new changes as soon as possible.