Many gam­blers linked to cash deals work in real es­tate: in­ter­nal re­view

Vancouver Sun - - FRONT PAGE - SAM COOPER

A back­ground re­view of hun­dreds of VIP gam­blers at Rich­mond’s River Rock Casino in 2015 found the high­est pro­por­tion of play­ers in­volved in large and sus­pi­cious cash trans­ac­tions worked in real es­tate, ac­cord­ing to a con­fi­den­tial memo ob­tained by Post­media.

The memo did not state whether these gam­blers work in B.C.’s or China’s real es­tate sec­tor.

The Au­gust 2016 in­ter­nal re­view — filed to B.C. Gam­ing Pol­icy and En­force­ment Branch com­pli­ance di­rec­tor Len Meilleur — was con­ducted to ex­am­ine the amount of cash flood­ing through high-limit VIP rooms at River Rock, and the ex­tent to which high rollers could buy chips with small bills and cash out with big bills. This process is known to anti-money laun­der­ing in­ves­ti­ga­tors as “colour­ing up,” and can al­low gam­blers to deposit sus­pected drug-cash $20 bills in casi­nos and walk out with bundles of $100s that ap­pear to be clean money suit­able for bank­ing and in­vest­ment, ex­perts say.

The Au­gust 2016 memo ex­am­ined $243 mil­lion in to­tal cash buyins for all of 2015 at River Rock and pro­vides the most de­tailed pic­ture yet of the char­ac­ter­is­tics of high-limit VIPs at the cen­tre of grow­ing con­cerns in B.C. casi­nos.

Post­media has re­ported that the RCMP have al­leged a crim­i­nal net­work used an il­le­gal money-trans­fer busi­ness in Rich­mond to lend sus­pected drug dealer cash to high roller Chi­nese gam­blers re­cruited from Ma­cau. RCMP in­ves­ti­ga­tors al­lege these gam­blers use huge wads of small bills to buy chips in B.C. casi­nos, and even­tu­ally pay back the il­le­git­i­mate loans in China. Or­ga­nized crim­i­nals in­volved in the scheme are a pub­lic safety threat in B.C. casi­nos, ac­cord­ing to an April B.C. gov­ern­ment doc­u­ment.

Re­spond­ing to Post­media’s re­ports, on Tues­day the B.C. Lot­tery Cor­po­ra­tion re­leased a state­ment that says: “Since mid-2015, 180 play­ers have been placed on sourced cash con­di­tions, and over 270 peo­ple have been banned for pos­ing a threat to pub­lic safety, in­volve­ment in crim­i­nal or­ga­ni­za­tion ac­tiv­i­ties or crim­i­nal con­duct likely to gen­er­ate pro­ceeds of crime. BCLC agrees money laun­der­ing and il­le­gal casi­nos pose sub­stan­tial pub­lic safety risks.”

The Au­gust 2016 memo said the B.C. gov­ern­ment’s com­mer­cial gam­ing au­di­tor stud­ied the back­grounds of 800 high rollers at River Rock Casino and tried to de­ter­mine whether a player’s job could sup­port an in­come that would jus­tify mas­sive chip pur­chases. Au­di­tors looked for “par­tic­u­larly sus­pi­cious oc­cu­pa­tions,” the memo said. They found it dif­fi­cult to fo­cus the oc­cu­pa­tional study, how­ever, be­cause pa­trons from dif­fer­ent walks of life were of­ten found work­ing to­gether to com­plete sin­gle sus­pi­cious trans­ac­tions. Also, the memo said, some of the Chi­nese com­pa­nies that VIPs claimed to work for may not even ex­ist.

Au­di­tors found real es­tate to be the most com­mon pro­fes­sion of the big spenders in the gam­bling study. There were 135 VIP pa­trons in the real es­tate in­dus­try who ac­counted for $53.1 mil­lion in to­tal cash buyins at River Rock in 2015. Of the real es­tate pro­fes­sion­als that spent over $1 mil­lion in cash, 41 per cent of their trans­ac­tions were flagged as un­usual. Most trans­ac­tions were red flagged be­cause of large cash buy-ins, or chip pur­chases with a large num­ber of small bills. Other rea­sons for flagged trans­ac­tions in­cluded pass­ing of chips or cur­rency be­tween gam­blers, and as­so­ci­a­tions with other sus­pi­cious gam­blers.

Busi­ness owner was the sec­ond most com­mon VIP gam­bler oc­cu­pa­tion in the study, with 86 pa­trons and $38.5 mil­lion cash-buy ins. Con­struc­tion was the third, with 56 pa­trons and $33.8 mil­lion in cash de­posited in 2015 at River Rock VIP rooms.

Au­di­tors were sur­prised by the num­ber of high roller housewives and how much they spent on chips. Seventy-five self-de­clared housewives spent $14.3 mil­lion in cash at River Rock VIP bet­ting rooms, mak­ing this the sixth big­gest oc­cu­pa­tion in the re­view. Three of these women de­posited over $1 mil­lion in cash in 2015. Nine of the women de­posited over $500,000 in cash, and 42 dif­fer­ent housewives were in­volved in 126 un­usual fi­nan­cial trans­ac­tions.

“There are oc­cu­pa­tions, such as house­wife, stu­dent, and server, that are not typ­i­cally able to sup­port the level of cash buy-ins made by those pa­trons,” the Au­gust 2016 memo said. Flagged trans­ac­tions “aris­ing from as­so­ci­a­tions with other known pa­trons were more preva­lent with housewives than any other oc­cu­pa­tion re­viewed,” the memo said.

One stu­dent spent $819,000 in cash for chips in 2015, the memo said.

The memo and other doc­u­ments ob­tained by Post­media sug­gest that some BCLC pa­trons are act­ing as nom­i­nees — a fake buyer used to hide the true source of wealth in a po­ten­tial money laun­der­ing trans­ac­tion.

“These pa­trons do not al­ways work alone,” the Au­gust 2016 memo said. “It is not un­usual for mul­ti­ple pa­trons from dif­fer­ent oc­cu­pa­tional cat­e­gories to be in­volved in a sin­gle sus­pi­cious trans­ac­tion.”

There is a sim­i­lar con­cern re­lated to bank draft de­posits for VIPs who have been shifted by the BCLC from cash buy-ins to the use of pa­tron gam­ing funds.

“Use of nom­i­nees bring­ing in bank drafts that do not have the bank ac­count cus­tomer/ac­count holder’s name on it” is a con­cern for the BCLC’s pa­tron gam­ing fund sys­tem, as is “pa­trons bring­ing in bank drafts from mul­ti­ple banks,” doc­u­ments state.

In the River Rock high roller au­dit, there were just six pa­trons who claimed to be in the “petroleum” in­dus­try. But these gam­blers spent $6.1 mil­lion in cash in 2015. About 69 per cent of these trans­ac­tions were sus­pi­cious. Au­di­tors at­trib­uted this alarm­ing statis­tic to an uniden­ti­fied “in­di­vid­ual in the group.”

The memo said that since most of the high-risk gam­blers are from China, much back­ground in­for­ma­tion could not be ver­i­fied, be­cause gam­blers pre­sented English-lan­guage ap­prox­i­ma­tions of Chi­nese char­ac­ter names.

“The le­git­i­macy of the 52 com­pa­nies listed by the top 62 pa­trons were re­viewed and test­ing was found to be in­con­clu­sive,” the memo said.

“We were un­able to con­clu­sively de­ter­mine whether the com­pa­nies ex­ist. Ob­tain­ing the char­ac­ters of the com­pa­nies given by high rollers would help … de­ter­mine whether the po­si­tions given could sup­port the level of play.”

Mean­while, Post­media has con­firmed the Canada Rev­enue Agency is work­ing with the RCMP in an in­ves­ti­ga­tion into al­leged money laun­der­ing in B.C. casi­nos and or­ga­nized crime net­works in Rich­mond with un­der­ground bank­ing con­nec­tions to China.

“The CRA can con­firm that it is cur­rently in­volved in this on­go­ing in­ves­ti­ga­tion,” spokes­woman Heidi Hof­s­tad said. “The CRA takes any al­le­ga­tion of non-com­pli­ance very se­ri­ously and, when jus­ti­fied, takes the ap­pro­pri­ate cor­rec­tive mea­sures, in­clud­ing re­fer­ring files to the Pub­lic Pros­e­cu­tion Ser­vice of Canada for pos­si­ble crim­i­nal pros­e­cu­tion.”

There are oc­cu­pa­tions, such as house­wife, stu­dent, and server, that are not typ­i­cally able to sup­port the level of cash buy-ins made by those pa­trons.

An Au­gust 2016 in­ter­nal re­view found 135 VIP gam­blers em­ployed in the real es­tate in­dus­try were be­hind $53.1 mil­lion in cash buy-ins at the River Rock Casino in Rich­mond in 2015.

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