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