British Columbia received its wake-up call.
In a scathing 1,800-page document, officials show BC casinos laundered billions as federal and local watchdogs stood idly by.
The report – dubbed the Cullen Commission – took three years to complete as it examined money laundering in the province between 2008 – 2018.
In total, the report makes 101 recommendations.
A call for the province to develop an anti-money laundering agency and stop depending on the feds is particularly compelling.
“For too long, money laundering has been kept on the sidelines,” said Austin Cullen, head of the inquiry, at a news conference on Wednesday. “Too often, it has been largely ignored. It’s time for that to change.”
Criminals spent ‘bricks’ of cash gambling at BC casinos
While there’s no official number, Cullen estimates the annual amount laundered to be in the billions.
It’s not just the total but how it happened. The report details many transactions exhibiting glaringly obvious characteristics of dirty cash.
Organized crime, notably Chinese high-rollers, all got in on the act.
According to the report:
“It often consisted predominantly of $20 bills, oriented in a non-uniform fashion, bundled in ‘bricks’ of specific values (as opposed to number of notes), bound with elastic bands and carried in shopping bags, knapsacks, suitcases, gym bags, cardboard boxes and all manner of other receptacles.”
The cash was also frequently delivered late or early in the morning to casino patrons by unmarked luxury vehicles.
And it all begs the question, could all Canada casinos be part of the problem?
British Columbia casinos accepted vast amounts of dirty cash
The report focused on the British Columbia Lottery Corporation, among other regional bodies.
Yes, accepting vast sums of dirty cash is terrible. Worse was the BCLC ignoring repeated warnings from various levels of law enforcement on the matter.
BCLC believed its security measures were sufficient.
It was not until 2015 that the lottery corporation took action, realizing the matter was out of control. Provincially, various ministries responsible for anti-money laundering took the blame.
Names noted include:
- Rich Coleman (former provincial minister for gaming)
- Christy Clark (former premier)
- Mike de Jong (former gaming minister)
- Shirley Bond (former gaming minister)
But while each individual could have done more, the commissioner stopped short of saying their failures amounted to corruption.
Feds failed; it’s time for BC to take control
When expanding the matter to the federal level, the report had harsh words for two national bodies, the RCMP and the Financial Transactions and Reports Analysis Centre.
Cullen described the RCMP as having a “lack of attention,” which allowed the problem to grow “since at least 2012.” But the main issue rests with the latter party, FINTRAC.
FINTRAC is the chief anti-money laundering agency in the country – specializing in financial matters. But, Cullen says, the agency has proven “ineffective.”
Combating money laundering at BC casinos and beyond
Because of that, BC Supreme Court Justice Cullen made sweeping recommendations.
A few of the most notable include:
- Independent legislative anti-money laundering commissioner
- A more vigorous approach to asset seizure
- Introduction of unexplained wealth orders
- The threshold for requiring proof of funds (cash) in casino transactions lowers from $10k to $3k
- Reporting requirement for luxury goods transactions of $10,000 or more
- Use of civil forfeiture
- Stricter regulations for money lenders, lawyers, accountants and mortgage brokers
- More money laundering training for police
- Focus on seizing high-value proceeds of crime
The full report includes 92 more.
CGA reviewing recommendations for Canadian casinos
In a statement released Friday, the Canadian Gaming Association welcomed Cullen’s final report, thanking the commission for the years of work.
“The CGA would like to thank Commissioner Cullen, the Commission counsel and staff for their work over the past three years; we will be reviewing the final report, and the four out of the 101 recommendations specific to the casino sector, to better determine potential next steps and implications for the Canadian gaming industry.”
CGA also reiterated its commitment to working at the federal and provincial levels to enhance comprehensive AML.
“As representatives of an industry with very robust controls and which generates significant benefits across nearly every region in the country, the CGA believes the nation’s AML ecosystem, supported by diligent monitoring and detection that is backed by strong enforcement, will continue to ensure the Canadian public can have confidence in Canada’s gaming industry.”
BCLC in hot water over botched tickets too
At the time of publication, BCLC has yet to release an official statement addressing the report.
According to the lottery corporation, they did not receive the findings before the public release and will need time to review the matter. Whenever they do respond, there will be more than one fire to put out.
Recently 503 scratch-and-win ticket winners were falsely told they lost due to a system error.
In total, the bug affected 1,898 scratch tickets scanned on June 6. More than 33% should have been winners. The issue came to light when a player contacted the corporation after winning symbols failed to cash out.
83% of the falsely labelled tickets were for prizes valued at $3 – $15. The highest amount was $100.
Not quite the sums mentioned in the commission report. But an annoyance to those affected, nonetheless.