For nine years, CBC News, a division of the Canadian Broadcasting Corp., fought for the release of information about the British Columbia Lottery Corp.’s (BCLC) trouble with FINTRAC, the country’s money laundering watchdog.
BCLC has now given up the struggle, thanks the freedom of information laws.
In 2010, FINTRAC slapped BCLC with a $700,000 fine for undisclosed violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The fine marked the largest penalty ever against a provincial gaming corporation.
FINTRAC withdrew the case, but BCLC still fought to keep the facts of the case from getting out.
“I think the release of these documents is long overdue,” said British Columbia Attorney General David Eby in February.
The documents found that BCLC’s oversight of the province’s casinos was deficient in seven major areas between 2009 and 2010. FINTRAC required the lottery corporation to report on large and suspicious cash transactions, possible indications of money laundering through casinos. A major audit discovered casino staff were conducting little if any verification of high-risk client betting, that BCLC had failed to adequately report cash transactions over $10,000, and that casinos were allowing high rollers to simply identify themselves as “self-employed” or “business owners.”
Recent investigations showed that criminals were able to launder up to $1 billion in dirty money through the province’s casinos for more than a decade—often bringing in bags and suitcases packed with $20 bills.
Internal letters between BCLC and FINTRAC blamed some of the deficiencies on technical glitches and human error. The lottery corporation begged FINTRAC to drop the fine and keep its problems out of the public view, arguing that revelation would tip off would-be money launderers.
“The public notice will detract from the very considerable efforts BCLC is making to appropriately comply,” said BCLC President and CEO Michael Graydon. “It will encourage inappropriate behavior.”
In a fax from August 2010, Graydon appeared angry that news of the $700,000 fine leaked to the press.
“Active inquiries have been made and it has not been possible to identify the source,” he said. “Damage has been caused as a consequence of the premature public disclosure.”
Graydon left in 2014, but BCLC continued to fight requests for details. It also appealed the $700,000 fine, and the Federal Court issued confidentiality orders barring the release of the records. In 2017, FINTRAC withdrew its case against BCLC and the penalty was set aside by the court.
In 2018, CBC refiled a request for the 2010 records, but key information was redacted. In mid-June, the court loosened the confidentiality order and BCLC finally gave the records to the news agency.
The lottery corporation says in FINTRAC’s last examination in 2018, the watchdog agency acknowledged the lottery corporation “had made significant progress in improving its anti-money laundering program.”
