Money laundering report recommends new police unit to oversee casinos

WATCH: A report examining money laundering in B.C.'s gambling industry has been released. Keith Baldrey has the details.

An independent report into widespread money laundering in Metro Vancouver casinos is calling on the establishment of a police unit to be created solely to investigate the legal-gaming industry. The recommendation is just one of 48 put forward in a report from Peter German that was released on Wednesday morning.

“For many years, certain Lower Mainland casinos unwittingly served as laundromats for the proceeds of organized crime,” reads the report. “This represented a collective system failure, which brought the gaming industry into disrepute in the eyes of many British Columbians.”

WATCH HERE: David Eby blames BC Liberals for money laundering issues

German completed the report in March, but it is only being released now because of concerns information in the original report could jeopardize ongoing police investigations. Attorney General David Eby hired German, a former RCMP deputy commissioner, in September to look into casino money laundering after extensive journalistic reporting found that it was a major issue.

READ GERMAN REPORT HERE

Eby says he can now with absolute certainty say that money laundering is taking place in B.C. casinos. The province has already started to implement the recommendations, with about 10 already completed and another 15 set to be tackled “in the short term.”

“I can tell you based on Mr. German’s work that it is tied to the opioid crisis, it’s linked to the housing crisis and the real estate market that has made life unaffordable for British Columbians'” said Eby. “The report itself paints a troubling picture of the last decade and a half.”

WATCH HERE: David Eby shows video of money laundering in action

The Attorney General is pointing fingers at the previous government, saying the B.C. Liberals had “many opportunities” to take action to force casino visited to proof the source of the money coming in. German’s report is not the first into money laundering in casinos, with Eby mentioning a 2011 report by the province.

“The only way to combat money laundering is to tackle it full-on, to bring the public along in full view so that they understand they work and consequences for failing to take action as well as the cost of taking action,” said Eby.

“In all cases we will be moving as quickly as possible to slam the door shut on money laundering in B.C. casinos and cut off funding to organized crime. It won’t be easy to reverse a decade and a half of neglect, but we are not waiting to get started.”

LISTEN: BC Liberals respond to Peter German’s report on money laundering


Speaking for the BC Liberals, Jas Johal, who became an MLA last year, says he hopes the recommendations are implemented.

But he took issue with the allegation that the Liberals turned a blind eye to money laundering.

“Changes initiated by the BC Liberal Government led to a reduction in those suspicious transactions,” Johal said.

WATCH: Government report blasts money laundering in B.C.

However, he said that information was kept under wraps.

“Work was being done behind the scenes. And based on what law enforcement said, we decided not to make a lot of that work public,” Johal said.

BC Liberal MLA Rich Coleman, who was the minister responsible for gaming at the time, was not made available to media on Wednesday.


READ MORE:
Poll shows voters support public inquiry into B.C. casino money laundering

The designated police unit German is suggesting would be created to specialize in criminal and regulatory investigators arising in the gaming sector, with an emphasis on Lower Mainland casinos. For now, German is suggesting British Columbia transition to an independent provincial regulator for the industry that would be similar to the B.C. Securities Commission.

German is recommending that anti-money laundering be the responsibility of that new regulator until the police force can be established.

EXCLUSIVE: A River Rock Casino VIP with links to high-ranking officials in China gambled with about $490,000 received in a suspicious transaction in a River Rock hotel room. Sam Cooper reports.


READ MORE:
How Chinese gangs are laundering drug money through Vancouver real estate

The report also fund multiple “vulnerable sectors” that have also been exploited by money laundering. German concludes that the B.C. government should now undertake research into allegations of organized crime penetrating the real estate industry.

The report also suggests an investigation into the “vulnerability of the luxury car sector and the horse racing sector” to organized crime.

“Casinos serve as a vehicle through which organized crime washes cash in the placement phase of the money laundering cycle,” reads the report. “The gambler can then take his or her residual funds and, or winnings and invest that money as you would cash from a legal source.”

WATCH: How did Vancouver become a cautionary tale in the world’s battle against money laundering and drugs? A Global News investigation looks into the issue.


READ MORE:
EXCLUSIVE: VIP linked to top Chinese officials, real estate, corruption allegations, gambled with $490k at B.C. casino

The issue of money laundering has been around a long time, but German says it hit the apex in 2015, when the RCMP advised a B.C. Lottery Corporation investigator that “officers were looking for a minnow and found a whale.” That investigation found that $13.5 million in cash has moved through a Metro Vancouver casino in one month.

LISTEN: A VIP gambler and suspicious sources of cash

But German is careful to point out that although a lot of the money involved in laundering comes from Asia, the problem is not to be blamed on that continent.

“This is not an Asian problem. It is about those who purchase illegal drugs, counterfeit products, and stolen property, as well as those who operate in the underground economy and subvert tax laws. It is our problem, not China’s problem.”

-With files from Liza Yuzda

© 2018 Global News, a division of Corus Entertainment Inc.

You May Also Like

Top Stories