The audit by the firm of Ernst and Young of River Rock Casino in Richmond, British Columbia, appears to refute claims by BC law enforcement that the casino was ground zero for money laundering by mob figures.
“A cheque by cheque analysis of three years of payouts over $10,000 at the River Rock Casino Resort has revealed no systemic pattern of money-laundering activity,” the B.C. Lottery Corporation (BCLC) reported last week.
The government initiated a review of casino transactions more than a year ago claiming that millions of dollars were being laundered through River Rock casino and other BC casinos.
BCLC brought in Ernst and Young LLP Canada to stress test that hypothesis by buying chips with cash, gambling and then cashing in their chips—laundering the money. The firm scrutinized more than 2,000 checks that were for more than $10,000 issued between 2014-2016 and valued at about $280 million. Of these checks about 2.4 percent were not subjected to scrutiny by casino employees, as required by law.
The company found nine players who withdrew money from gaming accounts that were issued checks totaling $3.5 million without having played any games. It identified almost 30 people that exhibited traits associated with laundering and limitations were applied to them. Two such patrons were banned from playing at B.C. casinos and four were required to disclose the source of their cash.
Current law requires that casino get a declaration of funds for cash buy-ins exceeding $10,000.
Attorney General David Eby, who has been the most prominent BC official leading the charge against money laundering at casinos, admitted that the audit didn’t support the idea that mob figures bring dirty money to casinos to “launder it.”
But he insisted, “At the exact same time as this survey was done, we know that people were bringing bulk cash that was the proceeds of crime into casinos with impunity for an extended period. The particular model here wasn’t the model that was used on the Lower Mainland, for which we’ve become internationally famous.”
Eby insists that organized crime figures give cash to players directly, either by loan sharking or through cash delivery services and get clean money back in return.
He notes that reporting regulations that he called for in 2017 have reduced suspicious transactions from $20 million a month to $200,000 a month.
Former RCMP Commissioner Peter German last year wrote a report that said some B.C. casinos had been used as “laundromats” for money from drug trafficking and real estate sales.
Eby has called for federal intervention into money laundering and says he is encouraged that the last federal government has announced an increase in funding devoted to fight money laundering.
For example, the RCMP’s money laundering division currently is funded for 25 officers, but only has 11 positions filled. None of them are pursuing criminal investigations.
Eby told the Vancouver Sun, “We knew that there were inadequate federal resources and we’ve been pushing the feds for a long time on that,” Eby said. “It never occurred to me that there would be zero officers working on this file.”
