Canadian province British Columbia has been identified as a hub for international money laundering through its casino and housing markets.
Now, an investigation by the former deputy of the Royal Canadian Mounted Police Peter German into the province’s money-laundering problem found that the province’s lottery—which regulates casinos—spent $5.4 million on an anti-money laundering system that didn’t work.
According to German, the lottery skipped the competitive bidding process and awarded the contract to a U.S. company that supplied AML software to banks. The software that was untested in a casino context and failed to perform.
Mistakes listed in the report included the system having no field for middle names, which caused thousands of false positives.
“The inability of the new system to deliver as BCLC had hoped means that BCLC must rely on its existing systems and manual intervention to monitor patrons,” German wrote.
The lottery, however, has sent out a new request for proposals saying its current software is “at the end-of-life and are manually intensive.”
It is seeking a new program that has already been implemented in casinos—including Canadian casinos—that will also monitor online gaming, Patron Gaming Fund accounts, Source of Funds reporting, and assist with the “ongoing monitoring of certain customers and their transactions.”
The report also found that the province’s casinos had become a “laundromat” for organized crime as banking networks with links to drugs trafficking would wash money by lending it to Asian high-rollers to be gambled at BC casinos with lax AML controls.
