RIVER ROCK REVELATIONS
Money laundering suspected in 2014
Executives with Great Canadian Gaming Corp. met B.C. Lottery Corp. managers in 2014 to discuss safety concerns presented by a high-stakes gambler who bought chips at River Rock Casino after receiving a suspicious delivery of $645,000 in small bills, Postmedia News has learned.
The information obtained by Postmedia sheds new light on the concerns of BCLC vice-president Brad Desmarais, a former Vancouver anti-gang cop, and the anti-money laundering solutions he discussed with Great Canadian executives in 2014, as Chinese VIP gamblers flooded the Richmond casino with suspect cash.
In November 2014, Desmarais, Great Canadian chief operating officer Terry Doyle and Great Canadian executive vice-president Walter Soo discussed what was known about the high-roller’s background, his massive cash buy-ins, his gambling habits, and his associates, internal reports indicate.
The reports allege that the gambler had not only used $645,000 in cash delivered to him to purchase River Rock chips in October 2014, but was also using large volumes of high value chips provided to him from suspicious origins.
Desmarais requested a mid-November 2014 conference call with Great Canadian executives, documents say, and Walter Soo explained that the gambler was from China, was in Canada on a 10-year visa, and had significant assets including real estate in Vancouver.
It was agreed that Soo should arrange a meeting with this gambler to convey concerns about his personal safety given his carrying large amounts of cash.
If the gambler attempted another massive chip purchase with small bills dropped off for him at River Rock, BCLC would attempt to contact him directly to tell him he must use his patron gaming fund, according to a record of the discussion. Patron gaming funds are non-cash accounts that BCLC asks high-rollers to use for safety reasons, and as an anti-money laundering measure.
Desmarais also said this gambler and his associates had to be made to understand that they must stop using cash and un-sourced chips provided by a network of suspicious associates, documents say.
BCLC anti-money laundering staff had already met River Rock managers in October 2014 to discuss concerns about a number of VIP gamblers who were funding their gambling with cash-drops from suspected criminals, documents say. These VIPs were also known to be using patron gaming funds for large chip buy-ins, meeting documents say.
It was noted with concern that the gambler connected to the $645,000 cash buy-in at River Rock had previously been using a patron gaming fund.
At the October 2014 meeting, River Rock managers agreed suspicious cash problems were serious and needed to be dealt with, documents say. BCLC planned to directly intervene with problem VIPs about cash concerns, but River Rock managers preferred to intervene with clients themselves first, documents show, or else be in a room at River Rock with BCLC staff for meetings with gamblers.
There was a followup meeting at River Rock Casino in November 2014 between BCLC’s Desmarais and Great Canadian’s Doyle and Soo, documents indicate. They had a long discussion about cash deliveries, problems with BCLC’s primary suspect in a cash delivery network, and large amounts of $5,000 chips purchased from River Rock that had gone missing.
The main suspect who Desmarais pointed to in this second discussion with Great Canadian executives in 2014 is the person who became central to RCMP’s subsequent E-Pirate investigation, launched in April 2015, according to government documents.
The E-Pirate investigation has resulted in money laundering charges against two B.C. residents and a high-end money transfer business in Richmond that Mounties allege was used to launder drug cash, and fund VIP gamblers recruited from China who bought chips, mostly at River Rock, with suspected criminal cash.
This week, Postmedia has attempted to get comment from corporate directors at Great Canadian on the allegations in the E-Pirate probe and River Rock’s anti-money laundering measures. Postmedia also sought interviews with Liberal Sen. Larry Campbell. Campbell, a former police officer, coroner and Vancouver mayor, became a senator in 2005 and became a director of Great Canadian in 2008. Campbell is paid $100,000 a year as Great Canadian director, and has accumulated over $1.1 million worth of deferred shares in Great Canadian, financial documents show.
On Wednesday, Great Canadian vice-president Chuck Keeling said the company would not provide directors including Campbell for interview, but would arrange an interview on Friday with Doyle.
Late Thursday, Keeling emailed, stating only: “We are no longer able to provide an interview tomorrow and we do not have any further comments at this time.”
Since Monday, Postmedia has asked Campbell about his role as Great Canadian director and allegations at River Rock Casino, through his Senate office and his senate email accounts. On Friday, Postmedia reached Campbell on his cellphone, but Campbell apparently could not hear questions.
“I’m sorry, I’m not in Canada and I can’t make out what you are saying,” Campbell said, before the line went dead. A second call minutes later was not answered.
Financial reports underline how central River Rock Casino is to Great Canadian’s business. Great Canadian was started in B.C., and has 17 gambling properties across Canada and Washington state. River Rock contributes the majority of Great Canadian’s net earnings, and accounted for 42 per cent of the company’s “consolidated revenues,” in 2015, financial documents say. In 2014, River Rock provided Great Canadian with 46 per cent of its revenue.
Great Canadian’s year-end report for 2015 says: “BCLC introduced additional conditions for certain VIP players in B.C. that include a requirement to demonstrate source of funds used to purchase chips. The effect of these conditions is not known, but management believes they have caused and will likely lead to a certain amount of reduced play, and therefore revenue.”
Risk factors for Great Canadian, the report says, include “dependence on B.C. properties for cash flow; changes to Canadian immigration and visitation policies.”
An internal B.C. gaming policy enforcement unit audit of VIPs and cash concerns at River Rock, said “despite these patrons having a long history of gambling, the nature of the cash that they presented at the casino suggested that the money did not come from a recognized financial institution and may be of questionable source.”
In July 2015, when BCLC implemented new cash restrictions for some VIP gamblers at River Rock’s high-limit tables, it “had a direct impact on the total amount of cash buy-ins conducted at the cages,” the audit says.
Between July 2015 and December 2015, cash buy-ins decreased by $38.6 million, or 27 per cent, from the first half of the year. At the same time, patron gaming fund activity at River Rock increased by 39 per cent from the first half of the year, the audit says.
The E-Pirate investigation has resulted in money laundering charges against two B.C. residents.