Money laundering at B.C. casinos linked to opioids, report says
VANCOUVER — Money-laundering operations in casinos have been tied to B.C.’s opioid overdose crisis and the real-estate market, the province’s attorney general said Wednesday.
The connection was made in a report he released, detailing how organized crime has used the gaming industry to distribute its profits.
David Eby said the report highlights disturbing issues related to international gangsters using Vancouver-area casinos to launder illegal drug money and then investing it in real estate.
“The fact that we played not just a local role, but an international role in this should be troubling to everybody.”
Eby said the problem surfaced in 2011, but the former Liberal government failed to address “serious crime with serious consequences.”
“It has to stop,” Eby told a news conference. “We can’t let organized crime get ahead of us.”
Eby tasked former RCMP deputy commissioner Peter German in September to conduct a review and make recommendations.
German’s report, “Dirty Money,” said B.C.’s gaming industry and the anti-money laundering system were not prepared for the onslaught of illegal cash. He estimated more than $100 million was funnelled through casinos as part of a scheme dubbed the “Vancouver model.”
German said the model is linked to Chinese crime organizations that loaned money from their proceeds, usually from illicit drugs, to borrowers who gambled at B.C. casinos.
In one scenario, a gambler might buy casino chips, lose a little money — or win — and then exchange the remaining chips for cash or a cheque. The gambler would receive Canadian dollars from the casino to repay the criminal groups.
“The ‘genius’ of the scheme is the ability to achieve two objectives and be paid for both in the same transaction,” the report says.
“The lender is both servicing a drug-trafficking organization by laundering its money, and the Chinese gambler by providing him or her with Canadian cash.”
Much of the laundered money ended up invested in Vancouverarea real estate, German said.
He said the amount of suspicious money entering casinos, since a high point in 2015, has been greatly reduced due to police and industry actions, but prevention measures must continue to ensure the problem does not resurface.
Organized crime will move to other sectors, including luxury vehicles and horse racing, he warned.
“We need a strong provincial regulator, which is not currently the situation.”
The report makes 48 recommendations, including establishment of a gaming regulator and a police unit specializing in criminal and regulatory investigations of the industry, requiring gamblers to reveal the source of cash and equivalents worth $10,000 or more, and having regulators at casinos around the clock.
Eby said the government accepts all the recommendations. “We will be moving as quickly as possible to slam the door shut on dirty money.”
Liberal jobs critic Jas Johal said he expected the report to include announcements of arrests and crackdowns on organized crime.
Billions of dollars have been invested in B.C.’s real estate market in the last few years, so “$100 million is a drop the bucket,” he said in an interview.
Johal said German’s recommendations will strengthen the system, and the Liberal government was moving toward making improvements before the last provincial election in May 2017.
Eby launched an investigation after B.C.’s gaming enforcement branch showed him surveillance video of gamblers walking into casinos with suitcases and a hockey bag full of $20 bills.
The B.C. Lottery Corp., which oversees the operation of casinos, said the report is an important road map for organizations involved in fighting money laundering.
“We are poised to implement the direction set out by Attorney General David Eby to keep dirty money out of casinos alongside our industry, government and law enforcement partners,” corporation president Jim Lightbody said in a statement.