In British Columbia, Canada, the Gaming Policy and Enforcement Branch recently announced Lisa Gao, former director of VIP gambler relations at River Rock Casino in Richmond, British Columbia, has been deregistered, meaning she is banned from working in the B.C. casino industry, due to repeated anti-money laundering violations.
Gao’s professional profile states she earned a business degree from the University of Ottawa and completed real estate studies there. She has worked at River Rock since 2010 and previously worked in Shenzhen, in China’s Guangdong province.
At River Rock, as director for VIP guest relations, Gao worked “closely with all key department heads, under the direction of the executive director.” She also provided “strategic directions and oversight of guest acquisition, development and retention and was responsible for daily operations of all high-limit areas on property.” In addition, she managed table play in River Rock’s exclusive VIP Prive Program, a high-limit baccarat betting area. And, she conducted “return on investment analysis for all VIP-related events and marketing initiatives,” her profile states.
A spokesperson from the Ministry of the Attorney General’s office said Gao was deregistered for “direct violation of BC Lottery Corp and Financial Transactions and Reports Analysis Centre directives about third-party cash buy-ins. “FINTRAC and other anti-money laundering and anti-terrorist financing authoritative bodies have observed the use of third parties in several money laundering and terrorist financing cases.” According to FINTRAC, a “third party” refers to “a person or entity who instructs another person or entity to conduct an activity or financial transaction on their behalf. It is not uncommon for criminals to use third parties as a method to evade detection by distancing themselves from the proceeds of crime.”
In early November 2017, the Ministry of Attorney-General confirmed the enforcement branch was investigating an employee at River Rock Casino, “after it was alleged the employee acted in direct violation of B.C. Lottery Corporation and FINTRAC directives about third-party cash buy-ins.” The enforcement branch reviewed the employee’s registration in late November and “rendered a decision.”The decision is considered preliminary and could change, according to the ministry.
River Rock recently has been the focus of a money-laundering scandal in the BC casino sector. BC Attorney General David Eby hired independent investigator Peter German after Eby discovered the previous provincial government either disregarded or buried a 2016 report noting BC casinos, particularly River Rock, regularly violated AML laws. River Rock was found to have “fostered a culture accepting of large bulk cash transactions” without checks or balances, the investigation concluded.
Last September, an audit revealed $13.5 million in $20 bills was accepted in River Rock Casino in July 2015. The audit stated “suspicious nocturnal drop-offs” in the casino parking lot included large volumes of cash, and “the majority of this cash is being presented by high-roller Asian VIP clients.” Further investigation indicated some VIPs had been allowed to buy gambling chips at River Rock with more than $500,000 in small bills at a single time, and casino staff were accepting the cash even though there was “no known source of funds.”
The Royal Canadian Mounted Police stated a far-reaching underground banking network linked to drug trafficking and terrorism made the transactions. In a memo, the gaming regulator stated the presence of organized crime that grown up around BC casinos is a “viable threat to public safety.”
A separate report by the Gaming Policy Enforcement Branch, Terrance Doyle, chief operating officer of River Rock operators Great Canadian Gaming, said, “What I can say is that we would never condone or allow any conduct that is inconsistent with our company policies or with the rules put in place by our regulators.”
In a recent speech, Eby said he was briefed on “allegations of serious, large-scale, transnational laundering of the proceeds of crime in British Columbia casinos. At this briefing, surrounded by members of the public service and a representative of the RCMP, I felt a bit like a UFO-ologist being invited to the Roswell military base and being introduced to an alien. We knew there was something strange going on, but, my God, we had no idea it was this big”
He added, “It is clear, in my opinion, that the previous administration was aware we had a serious and growing reputational issue. It is also clear to me that they evaluated the costs of cracking down on white collar crime, on fraud, on money laundering, and determined that the benefits of inaction outweighed the costs of action.”
Furthermore, Eby said, B.C. now has an international reputation as a place where the usual rules don’t “apply to white collar crime, fraud, tax evasion and money laundering, where even if the rules do apply, enforcement is absent. There’s even a term for the way money is laundered in our province: the Vancouver model.”
Eby has implemented two of German’s recommendations. First, casinos must fill out declarations including a customer’s name and source of funds for gambling with more than $10,000 cash. “If a customer does not provide the information required, provides information that is clearly suspicious or fails to sign the source of funds declaration, the service provider must refuse the transaction and BCLC will undertake an investigation,” Eby said.
Second, government regulators must be seen on-site at large, high-volume casinos in the Lower Mainland, and be available to casino operators 24/7.
German’s final report is due in March.
