Most big BCLC cheques weren’t for gambling wins
The majority of large cheques issued to B.C. Lottery Corp. high rollers in 2016, including a $2.4-million return of funds, were not for gambling wins, according to a Postmedia News analysis of patron gaming accounts used by VIP gamblers.
Postmedia examined the ways high-value cheques are disbursed from BCLC non-cash patron gaming fund accounts because documents say that B.C.’s gaming policy enforcement branch is concerned that these accounts are almost exclusively funded through bank draft deposits connected to a small number of VIP gamblers from Asia.
The enforcement branch says this could be a problem because “the majority of bank drafts are accepted” by casino operators “without knowing whether the funds are coming from the (VIP gambler’s) own bank account,” documents say. “Some of the drafts are blank. … Customer due diligence (of some VIP gamblers) responsible for a significant amount of patron gaming fund account activity may not be sufficient.”
Internal BCLC records, disclosed to Postmedia under freedom-ofinformation laws, revealed that River Rock Casino in Richmond issued 21 of the top 25 patron gaming fund withdrawal cheques in 2016. The cheques ranged in value from $600,000 to $2.4 million.
Postmedia attempted to examine the highest-value cheques issued from these accounts, and whether cheque labelling adhered to the BCLC’s anti-money-laundering policies.
Cheque records are generally retained at casinos for a certain amount of time for audit purposes, the BCLC said. Gambling industry representatives say that as a measure against money laundering in BCLC casinos, cheques that are not payments for verified winnings are marked “Return of funds, not gaming winnings.”
Patron gaming accounts were encouraged for VIP gamblers who have been associated with the transnational money laundering of suspected drug-dealing cash in BCLC casinos. The accounts are supposed to provide a better audit trail for the funds and prevent gamblers from leaving casinos with currency that appears to be laundered.
The BCLC said the idea is that if there was an indication a gambler was depositing bank drafts into a patron gaming account, then asking to cash out by cheque after an unusually small time spent gambling, that account would immediately be flagged for review.
The BCLC could not initially find copies of five of the top 25 patron gaming fund cheques on site at River Rock Casino, including the largest patron fund disbursal for 2016, a $2.4-million cheque.
The Crown corporation was asked if there could be any concerns that the cheques that couldn’t be located on site at River Rock were not properly marked.
“BCLC, in this instance, has taken the additional step to assist you by asking the service provider to obtain copies of the cheques that were not retained on site from its bank,” a response says. “BCLC has followed up with its service provider to ensure ongoing compliance with policies related to financial records management.”
The BCLC said after following up with the casino, it obtained copies of the five cheques for Postmedia.
“In terms of the management of our financial records as part of the (patron) account program, we are fully compliant with BCLC policies,” Great Canadian Gaming chief operating officer Terrance Doyle said in a statement. He said the BCLC and the gaming enforcement branch regularly audit casinos for anti-money-laundering compliance, including management of patron gaming accounts.
Of the 25 cheques examined by Postmedia, 23 are printed by machine. Some information on the records released to Postmedia has been redacted.
One of the River Rock Casino cheques appears to have confusing labelling. It is a handwritten cheque for $600,000 marked “Great Canadian Casinos Inc. Player Winning — River Rock.” Yet the cheque also contains a handwritten note that says “PGF CHQ (patron gaming fund cheque) — no buy in.” In a response, the BCLC said it has not been able to locate the cheque stub record for this October 2016 cheque.
The only other handwritten cheque in the sample reviewed by Postmedia — a $1.72-million cheque issued by River Rock in October 2016 — is also marked “Great Canadian Casinos Inc. Player Winning — River Rock.” The majority of the top 25 cheque stub records disclosed to Postmedia include a description of cheque transactions that says “No buy in, patron took cheque.”
This is what is marked on the stub record for a $2.4-million cheque paid out by River Rock Casino to an unidentified patron gaming fund user. The next biggest cheque — a $2.395-million River Rock Casino cheque marked “return of patron gaming funds” — has a stub that says “patron took cheque with no buy in.”
According to a BCLC document advertising River Rock Casino patron gaming accounts, “cheques issued from accounts are not eligible to be stated as verified win cheques.” Great Canadian Casinos Inc. will issue “up to a maximum of $9,999,999 per cheque” from patron gaming accounts, it says.
According to the BCLC, many players use the funds as holding accounts while gambling. “Where a cheque or cheque stub contains notation such as ‘return of patron gaming funds,’ and ‘no buy in — patron took chq,’ such notations usually refer to players ending their stay or current playing session and are not expected to return to play in the foreseeable future,” a response says.
The BCLC says none of the 25 patron account cheque disbursals examined by Postmedia for this story were considered suspicious.
For the first half of 2016, the top 10 of the 387 active patron gaming fund users accounted for almost half of the $301 million in total gaming fund deposits, documents say. Documents say that bank drafts accounted for $185 million of the $186 million in new money deposited into these accounts in 2016, and that the ways bank drafts are accepted in casinos is a concern for anti-money-laundering authorities.
There is one known case in B.C. in which money laundering and fraud have been alleged in connection to a BCLC patron gaming account.
Richmond real estate lawyer Hong Guo claims that two of her former employees have been charged by police in China in connection with the disappearance of about $7.5 million Guo alleges was stolen from her firm’s trust account in 2016, laundered through B.C. Lottery Corp. casino accounts and transferred to China.
In legal filings, Guo alleges her former employee Qian Pan told Chinese authorities that Pan used her client account with Gateway Casinos to deposit “all or (a) substantial part” of millions in misappropriated trust funds into Pan’s BMO bank account. Pan made the bank drafts payable to Gateway Casinos, according to Guo’s filings. Pan then gave the BMO bank drafts to accomplices who also held accounts at Gateway Casinos, Guo claims, and “received moneys in China from the accomplices.”
BCLC records show that Pan opened a patron gaming account at Gateway’s Starlight Casino in February 2016. A BCLC investigation report obtained by Postmedia says BMO and CIBC reported to BCLC “concerns that an unknown number of bank drafts submitted by Pan for gambling purposes derived from a third party.” The RCMP is investigating, records say.
One of the 25 patron gaming cheques reviewed by Postmedia is an $830,000 withdrawal from Gateway ’s Starlight Casino in April 2016. The withdrawal was disbursed in three cheques at the request of the account holder, BCLC records show, in the amounts of $250,000, $280,000 and $300,000.
Gateway spokeswoman Tanya Gabara was asked if the transactions could have been related to Hong Guo’s allegations.
“We have reviewed the transactions,” Gabara wrote in an emailed response. “They are not related to any known associates of the subject identified as involved with Guo.”
Gabara said the player that withdrew $830,000 in April 2016 “originally came in with a bank draft from a nationally recognized bank that was deposited in a (patron gaming account). Those funds were returned to the player … after significant play.”