Transaction assessment team and gang police now in B.C.’s casinos
A police illegal gambling unit has been activated inside B.C. casinos to fight organized crime and block suspicious transactions, according to documents obtained by Postmedia News.
The documents also show that a 2017 audit alleged “non-cash alternative” patron gambling accounts, which were promoted by the B.C. Lottery Corp. to wean VIP gamblers away from massive cash transactions, are being used to deposit cash in suspicious circumstances.
In contrast to documents released to Postmedia in October in the first phase of a freedom-of-information disclosure, these documents are heavily redacted. About half of the 118 pages just released are blotted out.
The new documents don’t name any B.C. casinos. In mid-November, Great Canadian, the operator of River Rock Casino in Richmond, blocked the scheduled document disclosure to Postmedia and sued the B.C. government, claiming the company would “suffer irreparable harm” if new documents were released without review by the company.
Un-redacted portions of the new
documents outline plans for police operations inside British Columbia casinos.
The documents suggest that the presence of anti-gang police inside B.C. casinos follows as a direct consequence from the RCMP’s E-Pirate investigation.
The E-Pirate investigation and government documents obtained by Postmedia allege that a network of organized crime lenders based in Richmond used VIP gamblers recruited from China to buy casino chips, mostly at River Rock Casino, with massive stacks of suspected drug cash. The scheme is part of a transnational money laundering operation that allows Chinese citizens to get money out of China and into B.C.’s economy, documents suggest.
In a recent speech, Attorney General David Eby said this form of money laundering using B.C. casinos, as revealed by Postmedia, is known in the international intelligence community as the “Vancouver model.”
A January 2017 memo written by Len Meilleur, the B.C. gaming enforcement branch’s director of compliance, says “this note is to provide awareness of a planned police presence in B.C. casinos, outlining the agencies involved.”
The memo provides justification for inserting police in B.C. casinos, saying “police have suspicions on reasonable grounds that cash is allegedly entering casinos as the proceeds of crime.”
An April briefing note from the assistant deputy minister for the B.C. gaming enforcement branch, John Mazure, points to the implementation in May of a so-called transaction assessment team. This team will operate under B.C.’s new Joint Illegal Gaming Investigation Team, the memo said, and the police anti-gang unit, the B.C. Combined Forces Special Enforcement Unit.
In response to questions for this story, the Ministry of Attorney General confirmed the transaction assessment team is in the initial stages of becoming operational.
As an indication of the urgency behind the new team, earlier in April, Meilleur sent a confidential memo to Mazure, asserting: “We are prepared to answer any questions (about the transaction assessment team) but plan on moving forward with engaging the Joint Illegal Gaming Investigation Team and BCLC immediately.”
Mazure’s April briefing note outlines the rationale for the transaction assessment team. The note says that gaming branch investigators took a “snapshot of the heightened risk identified in one casino” in July 2015.
Data focused on high-stakes gamblers buying chips with over $50,000 in cash per transaction. Total suspicious transactions at that casino was $20 million in July 2015, the memo says, with about $14 million of the suspicious cash in the form of $20 bills.
“Investigators during this analysis identified persons of interest associated to these patron buy-ins who were responsible for facilitating suspicious cash deliveries,” the memo says. “They operated in and around the casino.”
As a result of this finding, the Joint Illegal Gaming Investigation Team was created.
The gaming enforcement branch asked auditor MNP LLP to review BCLC-regulated casinos. MNP’s report, which was released in September following a Postmedia freedom-of-information request, says gaming branch investigators “compiled a document which identified approximately $13.5 million in $20 bills being accepted in River Rock in July 2015,” and “law enforcement intelligence has indicated this currency may be the direct proceeds of crime.”
As of April, Mazure’s memo says, “based on intelligence from the police, BCLC and gaming enforcement branch, it is believed illegitimate lenders are using the proceeds of crime to finance casino patrons for gambling at casinos in B.C.”
The memo says “the presence of organized crime in and around B.C. casinos presents a viable threat to public safety.” And casino investigators remain concerned about “illegal activity … around the source of cash … how the sourced cash itself is bundled, obtained and accepted by the gaming services provider.”
Explaining the transaction assessment team’s role in blocking suspicious cash, the memo says casino operators “for the most part accept the cash and BCLC reports it to (Canada’s anti-money laundering agency) Fintrac. The business model does not include an assessment of whether the cash should be refused … (there is) little effort to confirm the source of the cash at the time of the transaction. This is due to limited access and information being available to BCLC and the gaming services provider.”
The new documents released to Postmedia also show the government was prepared for media questions about BCLC’s reporting regime, including: “How do you respond to criticism that Fintrac is a warehouse that houses valuable information about potentially illegal activity that no one ever uses?”
Mazure’s April memo says transaction assessment operations in B.C. casinos will fit into B.C.’s policing priority, which is aimed at “systemic mitigation of the organized crime and gang landscape.”
“This model would include a documented working relationship with support from BCLC with limited indirect support from gaming services providers,” the memo says.
Documents explaining how the transaction assessment team will operate are completely redacted. However, the documents list expected outcomes of the team as further investigations, prosecutions and seizures of the proceeds of crime at casinos in B.C. result in a reduction of suspicious cash and disruption of organized crime’s ability to launder money at casinos.
In response to questions from Postmedia, a BCLC spokeswoman said: “We cannot respond to inquiries regarding … police investigations, (Joint Illegal Gaming Investigation Team) staffing or the transaction assessment team. These are independent organizations and BCLC is not in a position to speak to matters pertaining to their operations.”
Meanwhile, a January memo from Meilleur explains an audit of 291 B.C. Lottery Corp. patron gaming fund accounts. Names of the casinos and clients connected to these accounts can’t be seen as information has been redacted.
The memo says that before 2016, gaming enforcement branch audits “had not encountered cash deposited into patron gaming fund accounts.” But after August 2016, auditors found “the following issues with the circumstances upon which the cash was accepted for deposit.” Information on these cash deposits was redacted to protect police investigations.
(Casino investigators are concerned about) “illegal activity … around the source of cash … how the sourced cash itself is bundled, obtained and accepted.