Times Colonist

Stag­ger­ing al­le­ga­tions about money laun­der­ing at B.C. casi­nos

- Corruption · Crime · White-collar Crime · Gambling · British Columbia · Beijing · Royal Canadian Mounted Police · Casinos · Diddy – Dirty Money · Independent Review · Rich Coleman · Naomi Yamamoto

Tes­ti­mony at the Cullen Com­mis­sion, which is ex­am­in­ing money laun­der­ing at B.C. casi­nos, has turned up some trou­bling al­le­ga­tions.

The com­mis­sion, un­der As­so­ci­ate Chief Jus­tice of the B.C. Supreme Court Austin Cullen, was set up in May 2019. It fol­lowed a se­ries of in­ter­nal in­quiries, one of them ti­tled “Dirty Money: An In­de­pen­dent Re­view of Money Laun­der­ing in Lower Main­land Casi­nos.”

That re­port found nu­mer­ous ex­am­ples of il­le­gal pro­ceeds of crime be­ing “washed” through casi­nos, then laun­dered through wire trans­fers or un­der­ground bankers, some of the lat­ter lo­cated in China. This had been go­ing on for years.

The ques­tion that arose in the wake of th­ese re­ports was how could such a thing hap­pen? Why hadn’t the RCMP, through its In­te­grated Il­le­gal Gam­ing En­force­ment Team, un­earthed th­ese ac­tiv­i­ties?

Why hadn’t B.C.’s Gam­ing Pol­icy and En­force­ment Branch caught up with the crooks?

Where was the B.C. Lot­tery Cor­po­ra­tion when we needed it?

The com­mis­sion has pro­duced an in­terim re­port, which the pro­vin­cial At­tor­ney Gen­eral’s Min­istry is with­hold­ing un­til staff have time to di­gest it.

How­ever, most of the tes­ti­mony be­fore the com­mis­sion is avail­able on­line at the com­mis­sion’s web­site (cul­len­com­mis­sion.ca). If that tes­ti­mony is ac­cu­rate, it is ev­i­dent that over­sight bod­ies failed mis­er­ably in their du­ties.

At best this was due to po­lit­i­cal in­dif­fer­ence on the part of the pro­vin­cial gov­ern­ment. More likely it was all about money grub­bing.

The first al­le­ga­tion is that the RCMP team was de­lib­er­ately stripped of re­sources as a money-sav­ing scheme.

Fred Pin­nock, who headed the team, told the com­mis­sion that staff po­si­tions were kept va­cant to such a de­gree that he never had time to en­ter B.C.’s largest casino, Rich­mond’s River Rock Casino and Re­sort, where most of the laun­der­ing was go­ing on.

He spoke of a poor to non-ex­is­tent work­ing re­la­tion­ship be­tween his team and the province’s Gam­ing Branch.

And he noted that his team was shut down al­to­gether in 2009 un­der a direc­tive from Rich Cole­man, then the province’s so­lic­i­tor gen­eral.

Clearly, the RCMP team was ham­strung from the start, and this played a role in the fail­ure to de­tect a mas­sive money laun­der­ing scheme right un­der its eyes.

The se­cond al­le­ga­tion is that huge sums of money were be­ing gam­bled in quan­ti­ties that should have alerted both casino se­cu­rity, and the B.C. Lot­tery Cor­po­ra­tion, which over­sees casi­nos.

Dur­ing a seven-day pe­riod, one in­di­vid­ual bought chips worth $1.8 mil­lion, largely in small bills, at the River Rock Casino.

And John Karlovcec, for­mer di­rec­tor of anti-money laun­der­ing at lot­tery cor­po­ra­tion, ad­mit­ted un­der ques­tion­ing that the casino hadn’t re­ported two cash buy-ins of $450,000, all in $20 bills.

He fur­ther noted that when he be­came aware of th­ese sus­pi­cious trans­ac­tions, he did not di­rect the casino to refuse the cash, adding, “I rec­og­nize we do not want to jeop­ar­dize rev­enue.”

The third al­le­ga­tion is that Fred Pin­nock ad­vised MLA Naomi Ya­mamoto, who later be­came his wife, to raise money laun­der­ing con­cerns with Rich Cole­man. He tes­ti­fied that when she did so, Cole­man was “bru­tal, dis­mis­sive, and em­bar­rass­ing.”

This is rel­e­vant be­cause Pin­nock also tes­ti­fied that he was told by Kash Heed, who sub­se­quently re­placed Cole­man as so­lic­i­tor gen­eral, that the gov­ern­ment knew about or­ga­nized crime laun­der­ing cash through casi­nos, but did noth­ing.

Pin­nock told the com­mis­sion: “He (Heed) said to me, in ef­fect, ‘That is what’s go­ing on Fred, but I can’t say that pub­licly; you know it’s all about the money.’ ”

And Pin­nock went on to say Heed “did re­fer to Mr. Cole­man as be­ing largely re­spon­si­ble for this, as well as se­nior Moun­ties, who were com­plicit. The con­text was that it was a game be­ing played by se­nior po­lice of­fi­cers who were, I think the term he used was, ‘pup­pets for Cole­man’.”

Th­ese are stag­ger­ing al­le­ga­tions, which if true, and it must be em­pha­sized that’s all they are at this stage — al­le­ga­tions — por­tray a com­plete and to­tal fail­ure on the part of ev­ery over­sight body to do its job.

In­deed, more than that, it ap­pears the de­sire within gov­ern­ment cir­cles to max­i­mize gam­ing rev­enue over­came any sense of re­spon­si­bil­ity to com­bat or­ga­nized crime.

We’ll see, when the com­mis­sion’s in­terim re­port is made pub­lic, how many of th­ese al­le­ga­tions stand up to scru­tiny.

But if they do, dere­lic­tion of duty is the least se­ri­ous charge that should be made.

Newspapers in English

Newspapers from Canada