Bc Casino Money Laundering Report
A 'decade of dirty money'. That’s what an explosive new report is calling British Columbia's years under BC Liberal rule.
According to Peter German's report, the BC Liberals allowed millions upon millions in dirty money from illegal activity to be laundered through BC casinos on their watch. This money powered the fentanyl epidemic and contributed to the housing affordability crisis — and it happened largely because regulators refused to act and chose to look the other way.
Attorney General David Eby has released a report on money laundering at casinos in B.C. Photo by Francis Georgian / PNG The B.C. Government has pledged sweeping oversight reforms. Suspected money laundering rampant at B.C. Casinos: report CTV Vancouver Published Wednesday, April 9, 2014 8:08PM PDT Last Updated Thursday, April 10, 2014 12:17PM PDT SHARE.
Not once. Not twice. But time and time and time again.
So what happened when — and who knew what? We’ve done our best to break it down for you, going all the way back to 2002.
2002: The BC Liberal government passes a new Gaming Control Act, creating a new regulator called the Gaming Policy and Enforcement Branch.
2004: The BC Liberal government and the RCMP create the Integrated Illegal Gaming Enforcement team (also known as IIGET) with a mandate to investigate crimes surrounding “common gaming” houses, animal fighting, and bookmaking. It falls under the purview of Solicitor General Rich Coleman.
December 2007: The Integrated Illegal Gaming Enforcement Team prepares a report on its future; warning that high-level illegal gambling targets would conduct their operations with 'impunity' if the unit were disbanded.
November 2008: Reporter Sean Holman reveals that the BC Liberal party accepted more than $250,000 in donations from private bingo hall and community gaming centre interests between 2002 and 2007. This is despite an internal BC Liberal party bylaw banning donations from gaming.
Note: By the end of 2017 when corporate donations are banned, the BC Liberals accepted more than $500,000 in political donations from gaming companies.
January 2009: IIGET prepares a “Threat Assessment” report warning that BC casinos are extremely vulnerable to money laundering. They ask for an expanded role including BC casinos.
April 2009: Then-Housing Minister Rich Coleman eliminates funding for IIGET, disbanding the unit. He suggests the unit was not cost-effective and had failed to produce a business plan. Journalist Sean Holman later publishes a leaked copy of IIGET’s business plan.
October 2009: IIGET’s former commander Fred Pinnock speaks to journalists, stating that his team should have been expanded, not shut down. He comments “I'm not sure how motivated the provincial government was to have high-profile enforcement of illegal gaming in the province.'
January 2011: Inspector Barry Baxter from the RCMP’s Integrated Proceeds of Crime Section speaks to media about suspicions of dirty money in BC casinos and “sophisticated money-laundering activities by organized crime.”
He highlights a period of three months in 2010 where employees at 2 lower mainland casinos reported a combined total of $8 million in 90 large cash transactions, an average of one a day.
Rich Coleman criticizes Insp. Baxter, saying “Yeah, I know what he said, and I don’t agree with him, neither do all the superiors of his in the RCMP.”
August 2011: Following a request by Solicitor General Rich Coleman, the BC Office of Civil Forfeiture prepares a report on money laundering at BC casinos. The report recommends that BC Gaming update its approach to tackling money laundering.
November 2012: The head of the Gaming Policy and Enforcement Branch identifies 543 suspicious transactions, totalling $39.5M between 2010 and 2011. According to the German report, most occurred at Richmond’s River Rock Casino.
March 2013: Over email, the investigator leading gaming enforcement warns that money laundering is taking place at BC casinos. He suggests that illegal sources are supplying loan sharks with dirty money, who are then supplying gamblers.
Less than a year later, Finance Minister Mike de Jong fires the investigator. No other action is taken.
July 2015: The money-laundering crisis reaches historic levels with one casino accepting $13.5 million in twenty-dollar bills in a single month.
Later that month, the BC Lottery Corp sends the ‘Section 86’ report to the BC Gaming Enforcement Branch (an arm of the BC Ministry of Finance). It details the discovery of a massive underground banking network allowing organized crime to use illegal money transfer businesses in Richmond to lend cash to gamblers for chips at the River Rock Casino.
The 600 account holders in the underground banking network include known drug dealers in Mexico and Peru, and terrorist financiers in Iran.
July 2016: The BC Liberal government receives a report from accounting firm MNP LLP recommending changes to anti-money laundering practices.
They fail to implement the recommendations and withhold the report from the public.
May 2017: Rich Coleman accepts a $390 donation from Gateway Casinos to his personal re-election campaign. One year later in July 2018, he will tell CKNW’s Lynda Steele that he never accepted donations from gaming.
September 28, 2017: BC NDP Attorney General David Eby hires Peter German to investigate money laundering at BC casinos.
October 4, 2017: The ‘Section 86’ report is leaked to the Vancouver Sun. Mike de Jong refuses to comment.
October 19, 2017: Andrew Wilkinson cashes a cheque for $5,000 from Gateway Casinos for his leadership campaign. Other BC Liberal leadership contenders receive another $20,000.
June 27, 2018: Peter German releases his report, confirming the prevalence of money laundering in BC casinos. His report suggests that money laundering impacts both the fast-growing fentanyl crisis and affordability in BC’s real estate market.
German highlights the BC Liberal decision to disband IIGET as making matters worse.
Former BC Liberal cabinet ministers go into hiding. Instead, Andrew Wilkinson puts forward new MLA Jas Johal. He fails to accept any responsibility and blames the RCMP.
The RCMP issues a statement correcting the record, saying “At times, government is briefed on sensitive information concerning police investigations that cannot be released. However, it was the decision of government to disband [the] Integrated Illegal Gaming Enforcement Team (IIGET).”
June 28, 2018: Speaking to the CBC, BC Liberal leader Andrew Wilkinson refuses to accept responsibility, saying that asking politicians to do so is a “sad exercise.”
July 3, 2018: Former BC Liberal Attorney General Suzanne Anton (2013-2017) is asked by a CBC reporter whether her government’s response to money laundering took too long. She agrees, saying “That's correct. And it was slow.”
July 5, 2018: Calling into the Lynda Steele show on CKNW, Rich Coleman finally speaks to the issue. He calls the suggestion that his government did little to staunch money laundering ‘a load of garbage’. Like Johal and Wilkinson, he blames the RCMP for disbanding IIGET.
When asked if he’d act sooner knowing what he does now, replies 'I think it's difficult to say you would do anything differently.'
July 10, 2018:In an explosive interview with Global BC, former IIGET commander Fred Pinnock lays into the BC Liberals for their complicity in allowing money laundering to flourish in BC casinos.
“Fault lies at the feet of the BC Liberals while they were in government...They all knew what was going on in those casinos and racetracks. Primarily casinos, in particular, the big ones. It was wild west in those large casinos where organized criminal activity was running amok. It was no secret to government. At all.” - Fred Pinnock
Fall 2018:A sprawling, three-part investigation by Global News estimates that fentanyl drug traffickers laundered between 1 and 6 billion in metro Vancouver’s white-hot housing market, between 2012 and 2016.
“Fentanyl killed so many Canadians last year that it caused the average life expectancy in B.C. to drop for the first time in decades. But for crime kingpins, it has become a source of such astonishing wealth that it has disrupted the Vancouver-area real estate market.” - ‘Fentanyl: Making a Killing’
Meanwhile, Andrew Wilkinson and the BC Liberals refuse to waive cabinet confidentiality that would allow RCMP investigators access to records of high-level government discussions around what they knew about the money laundering at BC casinos, and when.
January 2019: A new freedom of information request from the CBC reveals that the estimated '$100 million' laundered through BC casinos is at least $700 million — and potentially as high as 1 billion in dirty money.
'The numbers would have exceeded $1 billion for sure in suspicious currency transactions. It was a staggering amount of money.' - Joe Schalk, former senior director of investigations with the Gaming Policy Enforcement Branch
Years later, the alarm keeps ringing — and the BC Liberals still won't say anything about it.
March 2019: In late March Global TV's investigative reporter Sam Cooper revealed a new twist in the money laundering saga — implicating the office of former BC Liberal Finance Minister Mike de Jong.
According to Cooper's research, officials from de Jong's office intervened to allow the BC Lottery Corporation to raise casino betting limits to $100,000 in early 2014 — against the recommendations of BC's gaming regulator.
'Since late 2010, the regulator — GPEB — had warned the Lottery Corp. (BCLC) to limit massive cash transactions involving Chinese VIPs at private baccarat tables, documents show. But instead, Lottery Corp. managers did the opposite. They repeatedly raised baccarat limits, from $5,000 per hand to $100,000. And they refused to implement the regulator’s suggested “remedy” of capping VIP buy-ins with $20 bills — the denomination associated most with drug trafficking — to under $10,000.' - Sam Cooper, Global TV
When questioned about his decision by Global TV, Mike de Jong said he didn't recall.
On May 15, 2019, the BC NDP government announced a public inquiry into money laundering led by BC Supreme Court Justice Austin Cullen. Here's what John Horgan had to say during the announcement:
'Criminal activity [from money laundering] has had a material impact on people: whether it be the rise of opioid addictions, the rise of opioid deaths as a result of overdoses, whether it was the extraordinary increase in housing costs, people were being affected by criminal activity in British Columbia.' - Premier John Horgan
In the last week of February 2020, the Cullen Inquiry opened public hearings into money laundering in BC. As the hearings opened, Andrew Wilkinson was still refusing to release cabinet-level documents detailing what he and the BC Liberals knew about money laundering, and when.
After 19 months of BC Liberal delay tactics, there's still so much we don't know — and what British Columbians deserve to know.
John Horgan and the BC NDP are committed to ending dirty money and holding people accountable. If you're with us, too, please add your name.
BC casino scandal gets dirtier as report reveals anti-money laundering investigators got bonuses for higher BCLC gambling revenue.
If you haven’t heard about the money laundering investigation surrounding British Columbia’s lower mainland casinos, you must have been living under a rock. Hundreds of millions of dollars were laundered through BC casinos over the last decade. It’s all contained in an investigative report, entitled ‘Dirty Money‘, headed by Attorney General David Ebby.
Just when you thought the scandal couldn’t get any dirtier, it has. According to a scalding report by CBC News, their staff members got hold of government documents (legally, by way of B.C.’s Freedom of Information Act) that suggest investigators, and their managers—the very ones who were in charge of analyzing and identifying suspicious money laundering activities at BC casinos—received kickbacks when BCLCs profits reached a high enough level.
BC Casino Scandal Escalates: Bonuses for Investigators
According to the CBCs report, the documents showed the bonuses were awarded annually from 2010 and 2014. Investigators and managers received anywhere from 3.6% to 9.6% bonuses on top of their regular salary, with most falling between 6% and 8%. The size of the bonuses were based on how much money the BCLC generated in annual gambling revenue.
The salaries for investigators ranged from $61,000 to $84,000, while their managers were pulling in salaries of $78,000 to $102,000 per year. All bonuses were paid on top of that.
As an example, the CBC report states that in 2013, one manager of anti-money laundering investigations received a $102,000 salary. In addition, he was awarded a 6.34% bonus, which amounted to an extra $6,469.38.
Bc Casino Money Laundering Reporting
Former GPEB Senior Investigations Director ‘Astounded’
CBC spoke with Joe Schalk, a former Senior Director of Investigations for British Columbia’s Gaming Policy and Enforcement Branch. He said the news “astounds” him, pointing to a “conflict” of interest, at the least.
“At that time, the amount of suspicious currency that was coming into the casinos was just increasing by the millions and millions and millions of dollars each year,” said Schalk. “In 2014 it was $175 million plus, where just five years before it had been $60 to $70 million being reported.” About 75% of that, says Schalk, came through in the form of $20 bills—exactly the size that should have raised glaring red flags.
“It doesn’t seem right that a bonus system should apply for the intake of money,” continued Schalk. “It just seems wrong….the perception might be the suspicious currency that comes in or is allowed to come in, maybe the higher the bonuses.”
Change in Law Ended Bonuses in 2014, Sort of…
Unchecked money laundering continued for several more years, but the bonuses came to an end in April 2014. That’s when new laws came into effect, preventing employees from getting bonuses based on revenue production. However, the incentive was still there.
The new laws provided for a “holdback” program. Instead of rewarding investigators for high casino revenue, they were essentially punished for lower revenue. A portion of their annual salary would be held back, and only paid if BCLC revenue reached a high enough threshold.
No one has yet been charged with negligence; looking the other way, or allowing casino money laundering to go on in order to receive a kickback. Considering the ferocity with which Ebby is tackling the investigation into the BC casino scandal, that could change at any moment.
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