‘Suspicious’ casino transactions plummeted in February, Eby says

“Suspicious cash transactions” at casinos plummeted in British Columbia after the provincial government tightened oversight, Attorney General David Eby says.

In a presentation Tuesday to the House of Commons standing committee on finance, which is receiving input on amendments to the Proceeds of Crime and Terrorist Financing Act, Eby said that “suspicious cash transactions” in B.C. casinos had fallen to $200,000 in February from a high of $20 million in July 2015. “We have reduced it by a factor of 100,” Eby said.

Following the peak in 2015, about $5 million a month in suspicious transactions were recorded, amounting to hundreds of millions of suspicious cash flowing through casinos, he said.

Not all of the money in the suspicious transactions was necessarily the proceeds of crime, Eby said.

The drop occurred following changes introduced in January that put tighter restrictions on cash flowing into casinos and beefed up regulatory oversight around the clock at the biggest casinos.

Eby told the federal committee, however, that he didn’t believe the initial changes had solved the problem.

“I believe that money has moved elsewhere, and I also believe we have a concern that needs to be dealt with bank drafts,” he said.

As part of its rolling investigation into money laundering in casinos, Postmedia earlier reported that B.C.’s gaming enforcement branch is concerned that many bank drafts, which can be used to fund patron gaming accounts for high-stakes gamblers, could have suspicious origins.

Changes implemented by the B.C. government are based on recommendations from an independent review by Peter German, a former deputy commissioner of the RCMP. Eby instituted the review in September over concerns about Chinese high rollers purchasing gambling chips with massive wads of cash.

The concerns were outlined in a confidential report commissioned by the B.C. Lottery Corp. from auditor MNP LLP that found $13.5 million in $20 bills had been accepted in the River Rock Casino in July 2015, also reported earlier by Postmedia.

Among the initial changes, B.C. now requires gamblers to file a source-of-funds declaration for cash and cash equivalents greater than $10,000.

Eby was in Ottawa to make recommendations to the finance committee based on initial recommendations from German, whose full review is due at the end of this week.

There are expected to be more recommendations the B.C. government will act on.

Among the recommendations presented in Ottawa is a call for better use and action by law enforcement officials on information stored with Fintrac, Canada’s chief finance intelligence unit.

“An anti-money laundering system that rigorously enforces compliance with reporting, but does not have an enforcement arm, puts a sheep mask on a wolf ’s face,” Eby told the finance committee.

The recommendations also include a call for legislation that requires the reporting of money held in lawyers’ trust accounts, noted as an impediment to police investigations involving the movement of money through real estate and other financial sectors.

Casinos, banks, securities dealers, real-estate brokers, accountants and notaries must report suspicious transactions to Fintrac, but not lawyers.

The recommendations also call for more policing resources to tackle financial crime and for tracking of cash purchases of luxury vehicles.