In British Columbia, Canada, the Commission of Inquiry into Money Laundering has been holding hearings into alleged criminal activities within the province, including at the River Rock Casino in Richmond, regarded as a hot spot for money laundering since 2010. The inquiry aims to establish how the province’s casinos became a “laundromat for organized crime,” according to a report into the issue commissioned by provincial Attorney General David Eby in 2017. Upon assuming office that year, Eby discovered earlier reports regarding money laundering in BC casinos were ignored or suppressed by the previous provincial government.
Ward Clapham, former superintendent at Richmond Royal Canadian Mounted Police, told commissioners in 2004, when he was chief of police in Richmond, reports of kidnappings, extortion, assaults and loan sharking on the casino premises alarmingly increased. Also, the rise of illegal gambling dens attracted organized crime groups.
Clapham said he asked the city of Richmond for more money to monitor the casino but officials said the federal RCMP and British Columbia’s unit already were doing that. It was not until 2007 that four additional police officers were allocated to the casino, Clapham said.
Commissioners also heard from Steven Beeksma, who worked as a surveillance manager at the River Rock Casino. According to Beeksma, it wasn’t uncommon to see patrons carrying cash stuffed in bags, bags, suitcases and backpacks, usually organized into $10,000 stacks of $20 bills.
He recalled one case in 2014 when a player brought in $200,000, lost $6,000 and cashed out with $194,000 in $100 bills, which would be less scrutinized when deposited in a bank. “This would be a case of refining, where the player was using the casino to exchange his $20 bills for $100 bills either for his own purpose or acting on behalf of a third party. We would have no way of knowing, but that behavior would be suspicious to us,” he said. Beeksma said banned players were seen on surveillance video dropping off bags of cash to patrons in a parking lot.
Citing another case, Beeksma said an individual who was banned for loan sharking provided a woman with $50,000 in cash in a casino washroom. The woman then left and later appeared on surveillance video being dropped off at the back of the casino by the general manager at the time, said Beeksma, not naming the general manager. An investigation determined the general manager treated the woman to dinner plus gifts of chocolates and roses. Soon after, the same woman again received $50,000 in cash, which was accepted as a buy-in by the casino, Beeksma said. He noted the general manager frequently wined and dined valuable players. “He likely had no idea what was about to happen but he put himself in a precarious situation,” Beeksma said.
Beeksma, who now works as an anti-money laundering specialist with the lottery corporation, said he was told to stop questioning high rollers at the River Rock Casino. He said his boss told him to “cut that sh*t out.” He added, “We had concerns about the cash’s origins for sure. The concern would be proceeds of crime but with limited information available to us it was more of an assumption at that time.”
But Beeksma pointed out casinos were not required to ask about the source of a customer’s funds until new regulations were implemented in 2015. Until then, River Rock had complied with regulations to report large or suspicious cash transactions. It was then up to gaming regulators, law enforcement and Canada’s financial intelligence agency, FINTRAC, to follow up. The BC Lottery Corporation has said it consistently reported suspicious transactions to Fintrac and alerted the gaming policy enforcement branch about unusual activity. The corporation has also brought in measures to control or prevent the flow of dirty money since 2012, including creating an anti-money laundering unit made up of certified investigators and intelligence analysts.
Regulators believe about $1.3 billion flowed through high-roller accounts linked to the province’s casinos, primarily directed by Chinese-run underground banks with drug trade connections. Another $3.8 billion a year was laundered through Vancouver real estate. The scope of the problem was so large, the BC government recently stated it affected the provincial economy.
Officials from the Great Canadian Gaming Corporation, which owns several BC gambling venues, told the commission it has stepped up its efforts to limit money laundering, adding that criticism of the industry is unfounded.
