Money Laundering under Liberal Government: Cullen Commission

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jerrym
Money Laundering under Liberal Government: Cullen Commission

Former Liberal Minister Rich Coleman has been accused of allowing gangs to launder money in legal casinos with senior police being complicit in testimony a former RCMP officer testified at a inquiry into money laundering. 

A former British Columbia RCMP officer testified he was informed in 2009 that Rich Coleman, then-minister responsible for gaming, was “largely responsible” for rampant money laundering related to organized crime in the province’s casinos, and that senior B.C. Mounties were complicit, an inquiry has heard. 

Fred Pinnock, former commander of B.C.’s anti-illegal gaming unit, described to the Cullen Commission on Thursday his recollection of allegations that he said then-solicitor general Kash Heed made against Coleman during a private meeting in 2009. Pinnock explained that he had tried to expand his unit’s mandate and resources to attack gangs that he believed were “out of control” in BC Lottery Corporation casinos. But his superiors in the RCMP and his partners at the Gaming Policy and Enforcement Branch didn’t support his objective, he said.

“I felt it was a charade and I don’t feel my superiors cared,” Pinnock testified. “Public safety was not a priority of my superiors with respect to gaming.” He said his frustration and friction with the gaming regulator led to his taking a medical leave in December 2007.

About a year later, he said, his former unit was disbanded by the B.C. Liberal government. And he was so disturbed by it that he tried to meet with Coleman to convey his concerns about gang activity in casinos, sending the message through his then-girlfriend, B.C. Liberal MLA Naomi Yamamoto. But according to Yamamoto, he said, Coleman reacted by rebuking her in front of the party caucus. “It was in a group setting and she described his reaction as brutal and dismissive and embarrassing,” Pinnock told the inquiry. “And my conclusion is he did not want to be told (about casino concerns.)”

Pinnock said he followed up by providing an interview to a B.C. media outlet in 2009, in which he accused the RCMP and B.C.’s government of “willful blindness” to increasing gang activity in Lottery Corp. casinos. He said Heed shot down his comments in a subsequent TV interview. However, since the two men knew each other as former police officers, they later agreed to meet in private. Pinnock recalled the meeting took place over lunch in Victoria. “I told him I am convinced that Rich Coleman knows what’s going on inside those casinos,” Pinnock recalled.

“And Kash Heed confirmed my perception that I was accurate in my belief, and he did feel that Rich Coleman had created this. “He said to me, in effect, ‘That is what is going on, Fred. But I can’t say that publicly. You know, it’s all about the money.'”

And, according to Pinnock, Heed claimed that Coleman “received the tacit support” of senior B.C. Mounties. “The context was (that) this was a game being played by senior police officers,” Pinnock said. “I think the term (Heed) used was (RCMP leaders are) ‘puppets for Coleman.'”

According to Pinnock, Heed said the RCMP leaders included Gary Bass, then-deputy commissioner for western Canada, and Dick Bent, Pinnock’s direct supervisor. But commission lawyer Patrick McGowan, as well as lawyers for the Lottery Corp. and the RCMP, confirmed with Pinnock that he did not have any notes or recordings of that meeting. Pinnock also acknowledged that he did not seek to question the RCMP officers he named, after Heed’s alleged comments.

“I’m going to suggest that all you have is a recollection of a conversation where those allegations may have been made,” an RCMP lawyer said. Pinnock agreed.Pinnock also said that he has not questioned Coleman about these allegations, and has only met with him one time since, at a B.C. Liberal fundraiser, in 2010. “We didn’t say anything,” Pinnock recalled. “I extended my hand to shake (his), and he’s a big fellow. He tried to crush my hand. I took that as a message to me.”

Coleman, who has not testified in the inquiry, has previously denied allegations that he turned a blind eye to crime in B.C. casinos. And Heed told Global News as a potential witness in the inquiry he can’t comment.

The inquiry also heard about a number of “foundational” RCMP memos that claimed Pinnock’s former anti-illegal gaming unit actually did have a mandate to tackle organized crime and money laundering in Lottery Corp. casinos. But, Pinnock said, in practice, the only message he received from the RCMP and gaming regulator was to “get along,” and that his unit was to only focus on illegal casinos in general and not on gangs in government-owned casinos. 

“We were not welcome in those environments,” Pinnock said. “In practice, we were not expected to have any presence in those locations.” 

The disbandment of the anti-illegal gaming unit in 2009 resulted in a gap in enforcement of money laundering until 2016, when B.C. launched an anti-gang unit to target casino crime, Pinnock testified.

The inquiry, which is mandated to determine whether corruption allowed money laundering to take root in B.C. casinos, has already heard that massive cash transactions of more than $100,000 per buy-in became common after 2010 in several Vancouver-area casinos. But Lottery Corp. staff allowed the “VIP” gamblers, who were receiving cash from a large network of loan sharks under investigation by the RCMP in 2012, to “bend” federal money-laundering rules, so as to protect the significant casino revenue they brought in, the inquiry has heard.

Some front-line Lottery Corp. investigators have also testified that their boss ordered them not to question the VIPs after one casino company complained they were intervening.

Pinnock’s testimony was scheduled to continue Friday.

https://globalnews.ca/news/7444953/rich-coleman-fred-pinnock-cullen-comm...

jerrym

Here is some background information on the money laundering situation in BC during the 16 years of Liberal rule, a time when the party received $300,000 in 'dirty money' from casino operators. The Liberals also received large donations from the real estate sector, an industry where $5 billion was laundered, thereby driving up housing prices by an estimated 5%, during a housing affordability crisis. Money was also laundered through the luxury car industry. The automotive car dealers association was also a major donor to the Liberals:

According to a 2018 report by former RCMP investigator Peter German, gangs usedthe proceeds of criminal activities, such as drug dealing, to loan cash to  gamblers or low-level gang members.

Those surrogates then paid for casino chips with twenty-dollar bills, before quickly cashing out the chips — making the money appear as though it came from a legitimate source.

German told the Globe and Mail that, in 2015, investigators discovered cash buy-ins at one casino totalled $13.5 million, almost entirely paid for in twenty-dollar bills: “the preferred currency of drug traffickers.”

However, despite receiving warnings about money laundering and its links to horrific criminal activities in a 2009 RCMP report, the BC Liberals defunded a police unit tasked with fighting illegal gaming activities.

According to German, the BC Liberals received further warnings about money laundering in BC’s casinos in:

  • A 2011 internal provincial report.
  • A 2012 document prepared by the province’s gambling watchdog, Gaming Policy and Enforcement Branch (GPEB), which warned of “suspicious cash increasing at an alarming rate” in casinos.
  • 2015 internal report warning about the suspicious $13.5 million cash buy-in at Richmond’s River Rock Casino.

In fact, in late 2013 former BC Liberal finance minister Mike de Jong increased betting limits betting limits in BC Lottery Corp casinos, despite warnings about money laundering from the province’s gambling regulator.

Last year, BC’s Attorney General David Eby estimated a total of up to $1 billion was laundered per year through BC’s legal and illegal casinos.

Incidentally, the BC Liberals received more than $300,000 in political donationsfrom two “dirty money” casino operators named in German’s report ahead of the 2017 provincial election.

Last year, the BC government’s Expert Panel on Money Laundering in BC Real Estate report found $5 billion is laundered through BC’s real estate sector every year, increasing average property prices in the province by 5%.

As previously reported, before the current BC government introduced legislationforcing property buyers to disclose their true identities, buyers could purchase real estate anonymously.

That loophole allowed criminals to funnel their money through shell companies, often set up in tax havens like the Seychelles or the British Virgin Islands. The report noted criminals favour real estate because it typically doesn’t depreciate much in value.

And, because criminals are typically seeking to quickly launder large sums of cash, they can easily outbid other would-be buyers by offering to pay hugely inflated prices for real estate.

This factor drove up average property prices, worsening BC’s housing affordability crisis.

https://pressprogress.ca/heres-what-we-know-so-far-about-criminal-money-...

jerrym

The BC Liberal government disbanded the RCMP unit investigating money laundering in BC after it warned that a 'businessman' connected to organized crime bought a share in a BC Lottery casino. 

A businessman “connected to Asian organized crime” was allowed by a British Columbia government employee to buy part of a B.C. Lottery Corp. casino, according to a confidential RCMP report obtained by Global News.

And the government employee was later hired in a B.C. casino.

The explosive accusation is just one example of organized crime’s alleged infiltration and corruption of B.C. government casinos, according to a January 2009 RCMP anti-illegal gaming unit report.

The report also contained jarring allegations of victimization, including that women with gambling debts in Asia were being trafficked to B.C. and forced into sex work, and that children in B.C. had been thrown in the trunk of a car and warned at gun-point that their father owed $300,000. ...

The report argued the RCMP anti-illegal gaming unit (IIGET) should target the drug cartels using B.C. Lottery Corp. casinos in combination with illegal casinos, to launder money.

At the time the IIGET was funded by B.C. Lottery Corp., and was only permitted to target illegal casinos.

But three months later, instead of following the report’s recommendations, B.C.’s government defunded and disbanded the illegal gaming unit. ...

Critics of B.C.’s casino industry have long questioned the decision to kill the RCMP unit.

In an interview, former Crown prosecutor Sandy Garossino said the confidential RCMP report — obtained through extensive freedom of information requests by Global News — “is shocking to the conscience” and points to “the appearance of corruption in the regulatory system.”

Critics of B.C.’s casino industry have long questioned the decision to kill the RCMP unit.

In an interview, former Crown prosecutor Sandy Garossino said the confidential RCMP report — obtained through extensive freedom of information requests by Global News — “is shocking to the conscience” and points to “the appearance of corruption in the regulatory system.”

B.C. government documents claim the decision was based on funding pressures in the B.C. Lottery Corp. and that IIGET was ineffective....

The January 2009 RCMP report stressed that money laundering between legal and illegal casinos was an integrity concern for B.C.’s government.

It said that organized crime could make big money in underground casinos, and “through the infiltration of legitimate gaming venues” easily launder and transfer the criminal proceeds.

And B.C. government and criminal casinos had become intertwined in a dirty economic loop, the report said, even sometimes sharing the same card dealers and loan-shark networks.

“Illegal and legal gaming share the same issues, such as loan-sharking, extortions, assaults, kidnappings and murders,” the report says. “And illegal and legal gaming have been interlinked when, in some cases, casino staff have directed patrons to loan sharks or to common gaming houses.”

These links between government facilities and underground casinos suggested that “corruption undermines the integrity of gaming in British Columbia,” the report said.

But in the case of one B.C. casino that is not identified in the report obtained by Global News, the organized crime connection was more fundamental and damaging to the integrity of gaming.

“More specific connections to Asian Organized Crime is/was through a subject, connected to Asian organized crime, who was allowed to buy into a casino,” the report said, pointing to an unidentified investor whose “casino business associates also have Asian Organized Crime connections.”

https://globalnews.ca/news/6403415/organized-crime-bc-casinos-rcmp-report/

jerrym

There are also major questions about the links between shootings and at least one murder in Metro Vancouver and money laundering. 

Investigators have officially described the Sept. 18 shooting as a targeted attack. “It’s amazing not more people got hit,” a source said.

It was also the latest in a series of shootings in a region that is home to 10 of 14 organized crime groups listed by RCMP intelligence as high-level national threats. The two victims are allegedly elite suspects in an international gang involved in money laundering at B.C. casinos. The attack was also on the eve of upcoming hearings, slated to run from October 2020 to April 2021, as part of the Cullen Commission, a provincial inquiry into money laundering. ...

While it’s not clear where that inquiry will lead, criminal intelligence sources say the nature of the shooting should serve as a warning about threats to national security and risks for Canadian politicians who have been observed meeting with dangerous people.

Intelligence sources say one of the victims, Paul King Jin, attended meetings organized in Canada by the Chinese Communist Party to allegedly interfere in Canadian politics and disrupt the country’s institutions. According to sources, Jin survived the attack, while Jian Jun Zhu was killed.

Zhu was the corporate director of Silver International, a Richmond money services business. Canadian and international financial intelligence records allege this firm has been laundering at least $1 billion annually for drug gangs based in China, the Middle East and Latin America. The RCMP executed search warrants on the company in October 2015 as part of a major money-laundering investigation into Silver International and a network of high-stakes gamblers in B.C. casinos. ...

The gamblers were known to individually bet as much as $1 million per night in B.C. casinos, using bags of cash supplied by Jin and Silver International, RCMP said.

Jin and Zhu were both charged, but those charges were stayed and Jin has denied allegations of wrongdoing.

A number of Canadian politicians, including a British Columbia NDP minister, a city councillor in the Vancouver region, a former Richmond MP and a former Richmond federal minister known to be a key player in Liberal Party of Canada fundraising have all attended events and appeared in private and published photos with Jin. These events took place after the first media reports about the police investigation against Silver International in September 2017. Police confirmed the charges against Jin and Zhu a month after those media reports.

There is no evidence of wrongdoing on the part of the elected Canadian politicians who have attended meetings where Jin or others identified as suspects in RCMP documents are present, and it isn’t clear whether they were aware of the risks. The politicians say part of their jobs requires them to meet with constituents.

But Calvin Chrustie, a former RCMP superintendent in charge of targeting transnational organized crime networks, says he is concerned that Canadian politicians at all levels of government are putting themselves in danger by meeting with alleged criminals.

“I don’t think Canadian politicians should think they are immune from the violence from these networks,” Chrustie said. “Their capacity and capabilities should be a concern to all that directly or indirectly engage in nefarious business activity, from property development and real estate to finance, legal and other related business activities. If there is a risk to these transnational organizations, an option to mitigate risks is always murder.”

Foreign intelligence sources interviewed by Global News also warn of a larger threat of corruption to democratic systems in Western governments. For example, they allege that Chinese officials protect and take payments from gangsters and they fear that this type of activity could spread to countries like Canada.

Both academic and media reports have documented this alleged form of corruption. Chrustie, who now works as a consultant on transnational organized crime threats with InterVentis Global and the Critical Risk Team, said that he believes that Canada’s intelligence allies — including Australia, the United States and the United Kingdom — are increasingly assessing transnational organized crime as a national security threat, but Canada is lagging behind. ...

https://globalnews.ca/news/7352842/intelligence-experts-crime-networks-c...

jerrym

The Cullen Commission was told by a witness that the government refused to stop the illegal money flowing into the casinos because of the revenue flowing to the government. Instead, the person warning of the problem was fired. 

A flood of $20 bills into provincially regulated casinos convinced a senior investigator at B.C.’s gambling regulator that dirty money was washing through the system as early as 2009, a point of view he pushed until he was fired five years later, the investigator told B.C.’s Cullen Commission.

Larry Vander Graaf said the raise of maximum bets to thousands of dollars invited a criminal element that could be seen via loan sharks on the gaming floors and bags of cash, causing him to raise flags as the former executive director of investigations of the Gaming Policy Enforcement Branch.

“They were pulling up in cars out front. It was like a drive-in,” Vander Graaf told the commission Thursday. “In 2009, I was very concerned about the money laundering problem. I said, ‘Uh oh, we’re getting large amounts of money coming into the casino. That to me smells like drug money… we said if this was suspicious, you’ve got to stop taking the money.” ...

Vander Graaf said his agency decided to classify any deposit of $3,000 or more in $20 denominations in a 24-hour period “suspicious.” But he said his agency had no power without the support of the provincial ministry at the time, to direct casinos to turn that money away.

“I put this in there in 2009 and I was still preaching this in 2014,” Vander Graaf said. That was the year that he and his colleague, the senior director of investigations, were dismissed without cause and walked out of the building. ...

Courts have heard that the amounts of money laundered reached into the hundreds of millions of dollars per year.

Cullen Commission lawyer Alison Latimer read an internal memo outlining how several high rollers were still offered “Patron Gaming Fund” accounts despite being viewed as suspicious.

“And it’s believed that these high-level players are being given extreme latitude violating these procedures, given that they are extremely high volume players,” she said.

“Yes,” Vander Graaf respondend.

“And that latitude was extended because fo the interest in the revenue generated by these players,” she said.

“Potentially, yes,” Vander Graaf said.

In 2009, BCLC raised the online gambling limit from $120 a hand to $9,999, on the grounds it would keep gamblers from going to new online gambling sites.

That created a major change in the industry, where loan sharking had always existed but was a low priority for law enforcement because the bets were so low, Vander Graaf said.

https://bc.ctvnews.ca/stop-taking-the-money-senior-gambling-investigator...

 

jerrym

The Tyee article below traces more than a decade of money laundering through casinos connected to the BC Liberals and Minister Rich Coleman, who will be testifying befor the commission in the next three to four months. 

“A failure to aggressively target the criminal element involved in the gambling business will have far reaching consequences down the road. Police agencies must find the resources to address this issue.” 

That’s what Fred Pinnock, the former commander of British Columbia’s illegal gaming enforcement team, told me in 2009. Between then and now, Pinnock’s warning became prophecy. It foretold the money laundering scandal that’s now the subject of an inquiry by the Cullen Commission, where Pinnock recently made headlines after disclosing he secretly recorded two conversations in 2018 with then solicitor general Kash Heed.

It remains to be seen whether those recordings will support Pinnock’s suspicion that Rich Coleman knew about the criminality in casinos. The BC Liberal former gaming minister has denied turning a “blind eye” to such illegality. 

Regardless, if more people had paid attention to Pinnock’s first warning 11 years ago, as well as other reporting at the time, we might not have needed his tapes or the commission itself. Nor might we have needed ex-RCMP deputy commissioner Peter German to prepare a 247-page independent review of money laundering telling British Columbians in 2018 that their Lower Mainland casinos had become “laundromats for the proceeds of organized crime.” ...

In July 2009, I found just such a piece of information on page 21 of the British Columbia Lottery Corporation’s 2008/09 report. ... the 35-page report mentioned the corporation’s funding agreement for the integrated illegal gaming enforcement team — which was supposed to look into everything from dog and cockfighting rings, to money laundering and loan sharking — had ended on March 31, 2009.

The RCMP told me the 12-member team was disbanded because of “funding pressures and other operational and investigative priorities.” But Coleman’s ministry, which included the gaming policy enforcement branch that regulates casinos and investigates wrongdoing in them, said much of the integrated illegal gaming enforcement team’s work overlapped with local police. As a result, it was decided it would be more efficient for the ministry’s gaming inspectors to work directly with those local forces rather than the team. ...

Pinnock, who was commander of IIGET between 2005 to 2007, said it was “obvious that highly-pedigreed gangsters” were frequenting the province’s casinos “on a continuing basis. There’s a ton of criminal activity being conducted in these places every day, including money laundering, loan sharking and other enterprise crimes.” Yet there hadn’t been any big busts of that activity. That resulted in Pinnock questioning whether the “resources and mandate” of the gaming inspectors at Coleman’s ministry, as well as British Columbia Lottery Corp., were “sufficient to effectively target the criminal activity going on within these environments.” And he accused the RCMP of “playing ostrich” about the problems inside legal gaming facilities. “For the police not to have well-resourced law enforcement units dedicated to casino environments is very short-sighted in my opinion,” he said. 

It signalled a major scandal. But, in the days, weeks and months that followed, Pinnock’s allegations didn’t seem to get much traction in the news media or on the floor of the legislature. ... Rob Shaw, who was then at the Times Colonist, was the only newspaper reporter to write a followup on that story immediately after it broke. ...

The consultative board for Pinnock’s team had, in 2006, directed it to focus on mid-level targets, such as illegal slot machines. After I found out about that direction, Coleman told me high-level targets were being “handled” by the integrated gang task force and the combined forces special enforcement unit. More recently, in his testimony before the Cullen Commission, Pinnock acknowledged his team, which experienced staffing issues, hadn’t demonstrated it could tackle such targets and possessed insufficient resources and skills for such investigations. He described high-level targets as including loan sharks and money launderers.

In 2007, Pinnock prepared two business cases recommending an expansion of the team, with one including a three-year budget plan. In his testimony before the Cullen Commission, the former commander said his business cases would have “broadened” its mandate to investigate laundering and loan sharking in casinos and given it enough personnel to “properly address high and mid-level targeting.”

Ed Rampone, who was dismissed in April 2009 as the gaming policy enforcement branch’s casino investigations manager, believed the cost of policing those loan sharks outweighed their benefits. In an interviewRampone explained those criminals were difficult to catch because most of them were Asian, creating cultural and language barriers that could block law enforcement officials. ...

British Columbia Lottery Corp. wanted to cut its funding for the integrated illegal gaming enforcement team two years before it was disbanded because of dissatisfaction with its outcomes. According to meeting minutes for the team’s consultative board, the corporation’s then president and chief executive officer Dana Hayden supported IIGET but felt it didn’t “fit” with BCLC’s mandate. ...

A December 2007 report by the integrated illegal gaming enforcement team warned “organized crime activity surrounding illegal gaming” would escalate if its strength wasn’t doubled. And, if it was disbanded, “mid and high level targets would conduct their illicit operations with impunity.” ...

IGET’s disbandment also happened three months after the team prepared a 36-page threat assessment for its consultative board, warning Hells Angels members had, in some cases, infiltrated the province’s “legitimate gaming operations.” That assessment, which I obtained via an access to information request, found known gang members were possibly participating in poker tournaments at casinos for money laundering purposes. It even included a censored section on “conflict of interest/potential corruption issues,” which stated “the integrity of gaming in British Columbia” could be “impacted by the presence or influence of organized crime figures at B.C. gaming facilities.” 

When a partially unredacted version of the same assessment was later accidentally released by the RCMP to the Vancouver Sun’s Chad Skelton, it revealed the team was also worried Canadian casinos were “extremely vulnerable to money laundering” and “police managers have suggested that, because of other priorities and a lack of resources, at this time nothing is being done to investigate these situations.” ...

The integrated illegal gaming enforcement team was quietly defunded and disbanded after it raised concerns about what was happening in the province’s casinos and proposed expanding its work. 

And what should have been even more surprising is that disbandment also happened after CBC journalists exposed British Columbia Lottery Corp. for “under-reporting suspected money laundering at the province’s casinos for years.”

Strangely, according to RCMP records presented at the Cullen Commission, investigating such money laundering had actually been part of the team’s foundational mandate. However, Pinnock’s predecessor, Tom Robertson, testified IIGET wasn’t actually set up to undertake those complex, intense and lengthy investigations on its own — which would have consumed much of its time and resources. ...

During his tenure as the team’s commander, Pinnock alleged that branch “clearly did not want us entering those (legal gaming) environments. That message was made clear to me.”

When I first asked about the controversy in 2009, the gaming minister told me he “brought (that team) back in” because he was concerned about its success. Later, Coleman said that decision was made by a “decent majority” of the team’s five-member consultative board, three of whom were from government if you include the lottery corporation’s representative. 

In my investigation, though, I found no board minutes mentioning such a decision, which appeared to me to have been made after its last recorded meeting. Instead, what I found was an email from the gaming policy enforcement branch’s then general manager Derek Sturko that stated, “IIGET is being discontinued. ... I pressed Coleman about the issue in his legislative offices in May 2010. ... When I asked him why I hadn’t seen any business case or other documentation supporting that decision, the minister said, “I don’t deal in paper. I take the information given to me. I sit down, discuss with people and then I communicate my decision.” ...

To this day, I’ve often wondered what damage could have been prevented if more attention had been paid to Pinnock’s warning, the controversy surrounding his team’s disbandment, and early reporting by other journalists about British Columbia Lottery Corp.’s questionable response to money laundering in the province’s casinos. 

I have also wondered why Pinnock wasn’t interviewed for German’s report and why that report didn’t include some aspects of the controversy surrounding IIGET’s disbandment in its accounting of the team’s demise. Perhaps it’s because it wasn’t a fault finding exercise?

But the bigger question is one that has been asked so many times before: Why did it take so long to fight casino money laundering in British Columbia? Hopefully, the Cullen Commission will be able to answer it.

https://thetyee.ca/Analysis/2020/11/17/BC-Dirty-Money-Scandal-Visible-De...

jerrym

Further suspicion about the government's failure to deal with money laundering arises from missing online documents. 

THE STRANGE CASE OF THE VANISHING ONLINE RECORDS

When I was running Public Eye and my freedom of information requests yielded records, I made a habit of scanning and posting many of the ones I received on Scribd — an online document sharing service — so that others could use my primary research. 

But when I went back to review the nine records I posted related to my integrated illegal gaming enforcement team investigation beginning in 2009, I found all but one had been removed from the platform. 

Strangely, the one that remains could be construed as being unfavourable toward Pinnock, showing him refusing to share illegal gaming statistics with Sturko. Records related to other investigations I had worked on are also still available. 

I contacted Scribd last week to learn more but have not yet received a response. However, the Cullen Commission confirmed it didn’t request the removal of those records for legal reasons. And German, who declined comment for this story because the Cullen Commission is underway, also confirmed his review didn’t do so either. 

– Sean Holman

https://thetyee.ca/Analysis/2020/11/17/BC-Dirty-Money-Scandal-Visible-De...

 

jerrym

Inspector Wayne Holland, former commanding officer of a B.C. RCMP anti-illegal gaming unit, testified at the Cullen Commission that he was "stunned" when the unit was shut down in 2009 because he knew this would allow organized crime to operate "with impunity" and to grow unchecked. The unit's threat assessment warned that "organized crime, money laundering and loan sharking were deeply embedded in BC Lottery casinos." and that this warning had been forwarded to BC Liberal gaming minister Rich Coleman. Despite this warning, the unit was dissolved thereby setting back dealing with organized crime in BC by a decade. 

The former commanding officer of a B.C. RCMP anti-illegal gaming unit says he was stunned when the provincial government disbanded his unit in 2009, even after he warned it that the decision would allow organized crime to operate “with impunity.”

Insp. Wayne Holland, who took control of the anti-illegal gaming unit in 2007, told a public inquiry into money laundering on Wednesday that he expected B.C.’s government to agree with the RCMP’s plan to double his unit’s size to 24 officers.

He told the Cullen Commission that the unit had been chronically understaffed, and in late 2008, he had presented a threat assessment that showed organized crime, money laundering and loan sharking were deeply embedded in B.C. Lottery Corporation casinos.

The threat report, obtained by Global News in a freedom of information request, also warned of extreme crimes and violence — including murders, loan-sharking extortions leading to kidnappings of children, human-trafficking and prostitution — stemming from B.C. government casinos. There was also the threat of corruption, Holland’s report warned, including circumstances in which an Asian-organized crime figure was allowed to buy a stake in a B.C. government casino.

“The (threat assessment) document was more substantial than we ever anticipated,” Holland told the commission. “It was very sobering.” But at a board meeting on the unit’s future in December 2008, Holland said that a deputy minister for then-gaming minister Rich Coleman told him that his unit would likely be dissolved. ...

Holland testified that he asked the deputy minister whether Coleman was aware of the threat assessment, and was told that he did. ... “I thought that dissolving (the unit) would put us back a decade or more,” Holland said. “Because police know — you give a criminal entity (opportunity) and they will entrench. They are like moss on a rock. They will grow and prosper.”

Holland said he was never informed who made the decision to disband his unit, but said “in my mind, it would be Mr. Coleman.” ...

Holland testified that B.C. RCMP brass assured him in 2008 that they would appeal the move to disband his unit to B.C.’s government, but that he doesn’t know whether they did so at the time. He said his bosses might have “acceded” to the B.C. government decision, but that he doesn’t believe the RCMP supported the move. However, he did say RCMP leaders never informed him exactly who decided to break up the unit. ...

The official explanation put forward by the RCMP and the B.C. Liberal government that it was to save money “kept changing” in B.C. Liberal statements to the media, Holland said. For example, Coleman told the media in a 2009 interview that Holland’s unit didn’t present a business case for its continuation. But that was false, Holland told the commission. He said that is why he emailed his superiors and told them to tell Coleman to stop making “uninformed” statements about the disbanding.

And the financial explanation never made sense, Holland said.  “We were aware that legal gaming has a healthy income stream (for the B.C. Liberal government),” he said. “We couldn’t envision that the cost of the unit would have outweighed the capacity for the (B.C. government) to keep funding us.” He also said he believed the unit “had an effective record, given the value for the money.” Holland said another reason he heard out of Coleman, according to media reports in 2009, was that the unit had poor performance and was redundant, and that that didn’t make sense either

https://globalnews.ca/news/7497621/rcmp-commander-warned-organized-crime...

 

jerrym

Below is a video of some of the testimony of Wayne Holland,  former commanding officer of a B.C. RCMP anti-illegal gaming unit, at the Cullen Commission. He was told that the unit would be doubled in size before he even arrived in the province. Instead it was dissolved within two years by the BC Liberals with Minister for Gaming Rich Coleman leading the way, thereby allowing organized crime to undergo massive growth in the province. 

https://globalnews.ca/video/7498807/former-high-ranking-police-officer-t...

 

jerrym

The Trudeau Liberal government has been rebuked for failing to provide documentsrelated to money laundering in BC to the Cullen Commission according to its interim report, especially Fintrac  which is "the intelligence agency on anti-money laundering". Much of the information was "composed entirely of materials that were publicly available on its website". Also many documents provided by Ottawa “have been redacted to the point that they provide no meaningful information.” Nor was the commission allowed to interview federal prosecutors. 

Sounds like the Trudeau Liberals could have something to cover up.

The federal government is failing in its obligation to provide important documents for B.C.’s provincial inquiry into money laundering, the inquiry’s commissioner says. Austin Cullen issued his first interim report on Thursday, commenting on the inquiry’s mandate and evidence produced so far. ...

He said the commissioner’s lawyers have established a good framework to probe money laundering in B.C., and that most of the parties with standing to testify in the hearings are co-operating. But Cullen rebuked the federal government for obstructing commission lawyers’ attempts to access important records. This is a problem, he said, because Ottawa controls a number of agencies with crucial roles in combatting money laundering, including the RCMP, Fintrac, Canada Revenue Agency, and the federal prosecution service. ...

“One area of particular concern involves Canada’s compliance with its obligation to identify the nature and character of documents in its possession or control,” Cullen wrote. “Many federal agencies have been slow to comply with these obligations, and the lists that have been produced often appear to be incomplete.”

He singled out Fintrac, the intelligence agency on anti-money laundering that’s controlled by the federal finance ministry. “Fintrac’s initial list of documents was composed entirely of materials that were publicly available on its website, despite the fact that it generates a wide range of specialized strategic research for regime partners,” Cullen wrote. “When Commission counsel raised that point, Fintrac added a total of seven documents to its list and took the position that its document production obligations were complete.”

Another concern, he said, is that many documents provided by Ottawa “have been redacted to the point that they provide no meaningful information.”The inquiry has also not been allowed to interview federal prosecutors, he added.

B.C. Attorney General David Eby said he was “incredibly concerned” about Fintrac’s reported reticence to cooperate. “I simply cannot understand why the federal government’s anti-money laundering agency that has a mandate to prevent (money laundering) is not falling over itself to provide information to the anti-money laundering inquiry.”

Fintrac has clearly been collecting data on large cash transactions, Eby said, and plays a key role in any response as it is responsible for connecting the dots between criminal organizations.

Eby said he’d spoken with federal Public Safety Minister Bill Blair, who assured him he would seek better cooperation from the agency.

Cullen did not point to evidence heard in testimony so far, which has included allegations that senior B.C. officials turned a blind eye to organized crime laundering massive amounts of suspected drug cash, because money pouring into casinos through loan sharks was good for revenue.

The inquiry has also heard that B.C. government employees allowed so-called VIP high-rollers to “bend” Fintrac’s laws, because casino owners didn’t want to offend high-value customers. And the vast majority of VIPs were Chinese nationals, the inquiry has heard, that gambled in B.C. government casinos with cash provided by loan sharks. These loans were repaid in China to organized crime, the inquiry has heard. And that means, that even if VIPs lost their bets, money was laundered for the loan sharks that provided them cash.

Cullen suggested he has already heard enough evidence to answer one of the basic questions his interim report had to address. Is money laundering even a problem worth examining? “Money laundering is an issue of great importance to the citizens of British Columbia,” Cullen wrote. “It is a crime that strikes at the heart of our collective values and corrupts the fabric of a free and democratic society.”

https://globalnews.ca/news/7514425/cullen-commission-interim-report-mone...

jerrym

In secretly recorded 2018 phone call former BC Liberal solicitor-general Kash Heed  called"Former British Columbia gaming minister Rich Coleman and senior Mounties “caused this tsunami to take place in casinos”. 

Former British Columbia gaming minister Rich Coleman and senior Mounties “caused this tsunami to take place in casinos,” a former solicitor-general said in 2018, according to a transcript released Monday during a public inquiry into money laundering

And in the transcript of the secretly recorded conversation between former solicitor-general Kash Heed and former RCMP officer Fred Pinnock, both men referred to former RCMP leaders in the province as “mafia”-like operators. They also discussed broader issues in the national force, such as lack of accountability for “sexual harassment,” according to the transcript. 

The Cullen Commission has already heard testimony about three recorded conversations in 2018 between Heed and Pinnock, who is former commander of the RCMP illegal gaming unit in B.C.

Pinnock has testified that he secretly recorded Heed to corroborate his memory of a meeting with him back in 2009.

According to Pinnock, the private meeting took place after Heed publicly shot down Pinnock’s criticism that organized crime and money laundering were rampant in B.C. casinos. And privately, Pinnock testified, Heed had told him that Coleman turned a blind eye to crime in B.C. Lottery Corporation casinos, and that it was “all about the money.” Pinnock also claimed that Heed had told him in 2009 that the RCMP was complicit in a lack of policing inside B.C. casinos, and that several senior officers were “puppets” for Coleman."

While some parties named in the secret tapes, including Coleman and the RCMP, had argued that the evidence should be inadmissible, commissioner Austin Cullen decided to admit and release the recording transcripts on Monday, ruling that they provide “indirect support” for Pinnock’s testimony. But only some portions of the tapes would be released, Cullen wrote, and other portions may come later, depending on evidence heard in the coming months.  ...

In the transcribed records released by Cullen, Heed and Pinnock discuss the circumstances surrounding the disbanding of Pinnock’s illegal gaming unit in 2009, and what they perceived as political interference by B.C.’s government in that decision as well as the RCMP’s provincial mandate. 

Heed also suggested in the transcripts that interference in the RCMP’s policing has persisted in B.C., and slammed the independent report on casino money-laundering filed in 2018 by former B.C. RCMP leader Peter German. And German was one of the former RCMP officers, the transcripts suggest, that Heed believed responsible for disbanding Pinnock’s unit. ...

Pinnock described being contacted by an unidentified colleague and warned about the allegations he was making publicly about corruption in B.C. casinos. “He said, ‘Fred, be careful; those f—–s are like the mafia,’ talking about the senior Mounties,” Pinnock said to Heed in the transcript. “Exactly,” Heed replied. “That’s exactly how (a person not identified by last name) described it too. They operate like the mafia.” ...

In the conversation, Pinnock and Heed also criticized former RCMP officers who were taking contract work for B.C.’s government, and they discussed former RCMP officers who were involved in the administration of provincial policing services. ...

Heed continued his attack, pointing to what he called a lack of accountability in the federal force. “Tell me what f—ing leader in the RCMP has ever been held accountable for … you know, harassment, sexual harassment … workplace harassment, all of that. One person that they’ve held accountable.” 

“You know, Kash, the organization’s out of control,” Pinnock responded. “If the scope of whatever investigation or inquiry is expanded to include political interference in policing, there are so many examples.”

https://globalnews.ca/news/7493127/fred-pinnock-recordings-tsunami-culle...

jerrym

Both Attorney General David Eby and inquiry commissioner Austin Cullen have expressed strong frustation with the failure of the Trudeau federal government to cooperate into the BC money laundering inquiry.  This has helped delay the release of a final report beyond the original May 15th, 2021 due date. 

British Columbia’s attorney general says he’s concerned about reports of a lack of co-operation from the federal financial intelligence agency at the province’s public inquiry into dirty money.

David Eby said Thursday he called federal Public Safety Minister Bill Blair to discuss the issues raised by inquiry commissioner Austin Cullen that Fintrac, Canada’s anti-money-laundering agency, wasn’t sharing its knowledge about money laundering in B.C. with the inquiry.

“I never expected anything but full co-operation from Canada’s only major anti-money-laundering agency,” Eby says in a statement. “To have anything short of that, given the agency’s stated mandate, is surprising and inexcusable.”

Cullen expressed disappointment with Canada’s approach to the inquiry in an interim report released Thursday.

“While I was heartened when Canada applied for participant status, its level of engagement has, in a few respects, fallen short of expectations,” it said.

The report singles out Fintrac as one of the federal agencies that was slow to comply with obligations to identify and elaborate on documents it has that could be relevant to the inquiry, said Cullen’s report.

“Fintrac’s initial list of documents was composed entirely of materials that were publicly available on its website,” it said.

The report said many of the documents the commission initially received from federal agencies were heavily redacted.

https://www.saanichnews.com/news/b-c-attorney-general-relays-money-laund...

jerrym

Money Laundering Inquiry Commissioner Cullen, in addition to hearing evidence from witnesses, has set in motion several studies to examine the amount and effects on money laundering in the province including on the health care and judicial system coming from the proceeds from  drug trafficking, human trafficking, prostitution, extortion, theft, fraud and trafficking in child pornography, as well as from overseas money laundering through BC, the latter primarily coming from China. This also raises questions about why the BC Liberals, who were in power for 16 years, did nothing to stop the money laundering and, according to commission police witness evidence repeatedly blocked investigations and even terminated money laundering investigative units, to say nothing of the unwillingness of the federal Liberal government to provide documents to help investigate the problem. 

Money-laundering Commissioner Austin Cullen says one of the biggest challenges facing his inquiry is quantifying “the amount of money being laundered through the B.C. economy each year.”

The answer will shape his findings, due next year, on the damage done by money laundering and the value of particular solutions. ...

A trio of academics, led by SFU public policy professor Maureen Maloney, attempted to quantify the extent of money laundering in B.C. in a report commissioned by the New Democrats and released the week before they called the public inquiry.

Maloney and colleagues estimated “that approximately $7.4 billion was laundered through the B.C. economy in 2018 (up from $6.3 billion in 2015) and that money laundering activity has made housing prices 3.7 per cent to 7.5 per cent higher than they would have been in the absence of money laundering.”

[Cullen] has commissioned his own studies, several of which are likely to prove newsworthy in their own right.

One is “a study on the flow of money from China to British Columbia,” and more power to the commissioner if he can shed light on that murky controversy.

Also in the works are investigations into unregulated mortgage lenders, the involvement of lawyers in money laundering, money laundering in the corporate sector, and the practices of luxury vehicle and yacht dealerships.

Another of Cullen’s studies may provide new insight on the public health crisis. He’s commissioned a two-part study to quantify the total amount of money laundered from the illicit sale of fentanyl.

“My hope is that it will provide reliable information from which the province can make meaningful choices,” writes Cullen. “The study may also provide a roadmap for further attempts at quantification with respect to profits derived from the drug trade and other (related) offences.” ...

Now in his 18th month as commissioner, Cullen has no illusions about the obstacles ahead before he wraps up his work probably in the second half of 2021.

“The commission is aware of the problems associated with measuring the size and impact of money laundering activity as well as the effectiveness of the proposed solutions.”

But at the same time, “it is important to recognize that it may be necessary to take action against the threat even though it cannot be empirically measured.”

Nor does the commissioner have any illusions on that score.

“Money laundering is a crime that occurs in the aftermath of other, more overtly and directly destructive offences: drug trafficking, human trafficking, prostitution, extortion, theft, fraud and trafficking in child pornography,” writes Cullen.

“The failure to respond to money laundering activity sends a message that unlawful and socially destructive activity will be tolerated.”

Mindful of the possibility that the activity has been too-often tolerated in B.C., he adds: “It leaves custodians of the political and economic system open to criticism that they are complicit in that enterprise of criminality and encourages those involved in criminal conduct to continue their unlawful behaviour.”

The latter sounds like one of those keeper quotes, to be played back if the final report, as expected, faults the previous B.C. Liberal government for negligence or worse in dealing with money laundering in B.C.

https://vancouversun.com/opinion/columnists/vaughn-palmer-how-much-money...

jerrym

BC Casino owners now admit to the Cullen Commission that they complained about  inquiries by Lottery Corp. investigators into drug money laundering by high rollers in the casino. The incestuous relationship between the Lottery Corp., the BC Liberals and the gaming industry is reflected in the fact that Former River Rock Casino compliance manager Robert Kroeker left River Rock to become compliance manager of the Lottery Corp. in 2015, a Crown corporation, while the Liberals were still in power in BC. 

Former managers at Richmond’s River Rock casino acknowledged that company executives complained about investigators probing foreign high-rollers for suspected drug-cash transactions, B.C.’s money laundering inquiry heard Monday.

The inquiry has already heard that Asian-organized crime used loan sharks inside several Vancouver-area casinos — especially River Rock Casino — to provide “VIP” high-rollers from China with suspected drug cash to buy casino chips. And investigators believed the VIPs would often pay the gangs back in China.

According to B.C.’s Gaming Policy Enforcement Branch, the suspected drug-money laundering from China increased exponentially from 2010 and was forecast to reach about $200 million per year in 2014.

Former River Rock Casino compliance manager Robert Kroeker and former general manager Rick Duff both testified Monday that Great Canadian Gaming managers didn’t want B.C. Lottery Corp. staff to question high-rollers from China about where they got their massive cash supplies. ...

“They didn’t want action taken that would needlessly drive the customer away,” Kroeker said. ...

Duff said growth of the Chinese VIP market in Vancouver casinos started around 1997, at the time that China’s government took over Hong Kong. He said he and a Great Canadian executive named Walter Soo worked together to build River Rock’s VIP business. ...

Duff said River Rock’s VIP room staff would get to know VIPs intimately, including taking them out for dinners and gifting them concert tickets. As VIP bet limits in River Rock Casino approached $100,000 per hand, the market drove 50 per cent of the casino’s revenue, Duff said. ...

Duff admitted that he clashed with Lottery Corp. investigators Mike Hiller and Ross Alderson over their questioning of VIPs receiving funds from loan sharks, or their desire to interview certain VIPs believed to be laundering massive amounts of $20 bills.

For example, Duff said he recalled telling Alderson in 2012: “I thought your job was to report (suspicious transactions) and let the real police investigate.”

And Duff said he argued with Hiller when Hiller banned a particular high-roller. But Duff said he didn’t recall telling Hiller that he would change River Rock Casino’s surveillance practices if the Lottery Corp. continued to probe high-rollers.

Duff was also questioned about a Lottery Corp. review that showed he went out for dinner with a female patron involved in suspicious transactions. The woman had already been observed receiving $50,000 in cash in a casino washroom from a person previously banned as a loan shark, commission counsel Patrick McGowan said.

In his testimony, Kroeker — who left Great Canadian Gaming to become a Lottery Corp. compliance director in September 2015 — suggested that B.C. Attorney General David Eby had politicized the B.C. government’s independent review of casino money laundering.

https://globalnews.ca/news/7597783/great-canadian-gaming-managers-compan...

jerrym

More questions are being raised by the shady practices of Great Canadian Gaming’s president Rod Baker, not only about how the casinos operated as money laundering at them occurred, but by the revelation that he has "resigned" for going, along with his wife, to the Yukon and misrepresenting themselves as local hotel employees  to get a early Covid vaccination. This is against the law and they now subject to a $575 fine and possibly six months in jail, along with his wife, for this. It raises more questions about how ethically the entire BC gaming system operated.

Great Canadian Gaming’s president Rod Baker announced his resignation Monday. Baker was previously named in the inquiry as a Great Canadian executive that allegedly complained to the Lottery Corp. about investigators questioning VIPs at River Rock Casino. ...

Baker, 55, and his wife, Ekaterina Baker, 32, were ticketed and charged in Whitehorse on Thursday for breaking Yukon’s Civil Emergency Measures Act.

The couple were required by territorial law to isolate for 14 days upon arrival, but allegedly took a private plane to the remote community of Beaver Creek to receive the Moderna vaccine.

They each received two $575 fines for failing to self-isolate and failing to behave in a manner consistent with their declaration, according to the tickets filed in the court registry and provided to Global News on Monday.

https://globalnews.ca/news/7597783/great-canadian-gaming-managers-compan...

jerrym

How much danger did Asian organized crime present to BC through money laundering and other activities and especially with regard to gambling? Enough for "British Columbia’s gaming regulator concluded Asian organized crime was becoming so powerful inside B.C. casinos after 2010 that it was too dangerous to investigate suspected drug-cash laundering estimated to reach about $200 million per year, the province’s inquiry into money laundering heard Friday."

The failure of the BC Liberal government to deal with this challenge is evident from the Cullen Commission testimony: "But nothing was done until a major RCMP investigation in 2015 threatened to embarrass the B.C. government, according to Derek Dickson, the B.C. Gaming Policy Enforcement Branch’s former director of casino investigations." ...

"The inquiry has already heard that Vander Graaf and Schalk were terminated without cause in late 2014, and that Vander Graaf believed it was because they’d been urging the B.C. government to stop money laundering."

Testimony from the Gaming Commission Enforcement Branch director, Joe Schalk, revealed that he  he and his boss, Larry Vander Graaf, had repeatedly warned BC Liberal "Minister Rich Coleman, of the branch’s conclusion that massive drug-money laundering was occurring in the province’s casinos" as early as 2008. He described showing "video tapes of bags of cash flooding into casinos to officials including Doug Scott, one of the deputy ministers responsible for gaming. Schalk said he and Vander Graaf told all of these officials that they believed organized crime was using the casinos to launder money". ... “There is no question in my mind that Mr. Scott understood this was proceeds of crime,” Schalk said.

British Columbia’s gaming regulator concluded Asian organized crime was becoming so powerful inside B.C. casinos after 2010 that it was too dangerous to investigate suspected drug-cash laundering estimated to reach about $200 million per year, the province’s inquiry into money laundering heard Friday. ...

And the inquiry heard that senior B.C. officials were alerted and understood that suspected drug-money laundering from China was growing at an exponential rate inside Vancouver-area casinos, and especially Richmond’s River Rock Casino. ...

But nothing was done until a major RCMP investigation in 2015 threatened to embarrass the B.C. government, according to Derek Dickson, the B.C. Gaming Policy Enforcement Branch’s former director of casino investigations.

Dickson and his former boss, Joe Schalk, testified that the enforcement branch had used police intelligence to determine that from about 2007, organized crime groups operating inside B.C. casinos were using high rollers, who were predominantly wealthy Chinese nationals, to launder money.

Gang members would give bags of $20 bills — which the regulator and RCMP strongly suspected was drug cash — to Chinese VIPs, who would take the money into casinos, gamble with it, then return it to the gangs....

But nothing was done until a major RCMP investigation in 2015 threatened to embarrass the B.C. government, according to Derek Dickson, the B.C. Gaming Policy Enforcement Branch’s former director of casino investigations.

Dickson and his former boss, Joe Schalk, testified that the enforcement branch had used police intelligence to determine that from about 2007, organized crime groups operating inside B.C. casinos were using high rollers, who were predominantly wealthy Chinese nationals, to launder money.

Gang members would give bags of $20 bills — which the regulator and RCMP strongly suspected was drug cash — to Chinese VIPs, who would take the money into casinos, gamble with it, then return it to the gangs.

The inquiry reviewed emails from Dickson in which the enforcement branch urged B.C. Lottery Corporation managers to slow down the money laundering by placing a hard limit of $10,000 on “buy-ins” with $20 bills. After 2010, Dickson said, VIPs funded by loan sharks were commonly buying in with well over $100,000 cash per transaction.

But Lottery Corp. management didn’t start to crack down on VIPs and loan sharks until July 2015, Dickson said, when their officials were alerted of a major RCMP investigation into suspects including Jin.

“(The branch was told) the outcome is going to embarrass the government, so that is when we started to see BCLC doing more in banning people,” Dickson told the inquiry. “But we never did see a limit on cash.”

The commission heard of an email from Dickson to Schalk, former senior director of investigations, warning that it was too dangerous for staff to investigate transactions involving several organized crime groups that were expanding their operations and “influence” in B.C. casinos.

“The issue is becoming even more significant at the River Rock Casino,” Dickson’s email said, adding that gangsters operating inside the casinos had records for violent offences including kidnapping and had been cited for possession of restricted weapons.

In his testimony, Schalk was asked if he recalled a whistleblower complaint in 2006 that alleged a staff member at the River Rock had helped a loan shark evade surveillance. He said he didn’t recall the specific allegation. ...

Schalk testified that from 2008, he and his boss, Larry Vander Graaf, repeatedly warned senior B.C. gaming officials, including then-minister Rich Coleman, of the branch’s conclusion that massive drug-money laundering was occurring in the province’s casinos.

He described showing video tapes of bags of cash flooding into casinos to officials including Doug Scott, one of the deputy ministers responsible for gaming. Schalk said he and Vander Graaf told all of these officials that they believed organized crime was using the casinos to launder money. ...

The inquiry has already heard that Vander Graaf and Schalk were terminated without cause in late 2014, and that Vander Graaf believed it was because they’d been urging the B.C. government to stop money laundering.

https://globalnews.ca/news/7593419/bc-casinos-too-dangerous-cullen-commi...

 

jerrym

The following video from the Cullen Commission investigation into money laundering in BC raises questions about having Former River Rock Casino and the Great Canadian Gaming Corp compliance manager Robert Kroeker left River Rock bouncing between these gambling companies and becoming compliance manager of the Lottery Corp. in 2015, a Crown corporation, and how the revolving door could have contributing to problems in the industry. 

https://globalnews.ca/video/7601854/cullen-commission-hears-from-former-...

jerrym

The CEO of the BC Lottery Corporation, Jim Lightbody, admitted yesterday at the Cullen Commission that "he was concerned that raising bet limits in B.C. casinos to $100,000 per hand in 2014" because it could "open the door to money laundering", but neither he nor the BC Liberals did anything to stop it because it "would have impacted Lottery Corp. revenue."

Lightbody said "it wasn’t until the RCMP informed him in mid-2015 that an 'international crime unit in Richmond' was using a money-services business to fund Lottery Corp. VIPs to buy casino chips." Yah. Sure. In 2009 there was a recommendation by Derek Sturko, a former assistant deputy minister responsible for gaming, "that cash transactions of “greater than $300,000 in $20 bills should be deemed suspicious.” Jeez, everything under $300,000 in $20 is chicken feed. Sturko "couldn’t recall if he elevated the memo’s recommendations to [Liberal Minister] Rich Coleman. What do you expect? Of course he wouldn't remember something about organzed crime and gambling in the 100,000s. Such chicken feed!

The CEO of the BC Lottery Corporation has told a public inquiry that he was concerned that raising bet limits in B.C. casinos to $100,000 per hand in 2014 could “open the door to larger scale money laundering” via high rollers from China using mysterious cash from underground banks, but that the corporation decided to do it anyway.

At B.C.’s Cullen Commission on Thursday, Jim Lightbody was questioned about decisions to increase the Lottery Corp.’s revenue via mostly wealthy Chinese nationals after he became aware in 2011 that the RCMP and provincial gaming regulator suspected that high rollers were buying casino chips with bags of $20 bills loaned to them by Asian gangs.

The commission — which is mandated to determine whether corruption allowed money laundering to take root in B.C. casinos — has previously heard that the Gaming Policy and Enforcement Branch concluded after 2010, that suspicious cash transactions via Asian gangs and Chinese VIPs were growing exponentially, and that in 2014, suspected drug-money laundering in B.C. casinos was forecast to reach about $200 million per year. ...

Lightbody testified that Lottery Corp. managers understood that most of the high rollers from China were using bags of $20 bills sourced from underground banks to buy casino chips. He said an “influx” of wealthy gamblers from China and Hong Kong arrived in Vancouver after the 2010 Winter Olympics, and that Lottery Corp. managers also wondered if they obtained duffel bags of $20 bills from Vancouver “cash-based” businesses in the construction or restaurant sector. ...

He said he became aware of increased risks following a casino review in 2011, and subsequently delegated risk mitigation to a Lottery Corp. vice-president named Terry Towns. “I can’t recall specifics,” Lightbody told the inquiry. “I’m sure he did something.” ...

Lightbody said the Lottery Corp. did not consider refusing cash with unknown origins or asking high rollers to declare their source of funds, or putting a $10,000 limit on “buy-ins” in $20-bill denominations. That’s what the branch urged the Lottery Corp. to do from 2010 to 2014, the inquiry has heard.

“Wasn’t the obvious question not how (VIPs from China) made their money, but where did the $200,000 in $20s in a grocery bag that they just put on the counter come from?” McGowan asked.

Lightbody said he believed asking Chinese VIPs to declare their source of funds would have impacted Lottery Corp. revenue. ...

Lightbody said it wasn’t until the RCMP informed him in mid-2015 that an “international crime unit in Richmond” was using a money-services business to fund Lottery Corp. VIPs to buy casino chips and real estate in the province that he could be sure organized crime was using his casinos. ...

Meanwhile, the inquiry heard that Derek Sturko, a former assistant deputy minister responsible for gaming, reviewed a memo in March 2009 that warned that risk of money laundering at Lottery Corp. casinos was “extremely high.”

The memo recommended that cash transactions of “greater than $300,000 in $20 bills should be deemed suspicious,” and that casino service providers should refuse suspicious cash transactions. The memo also warned that casinos were taking in cash with the “smell of illegal substances.” ...

And Sturko testified that he couldn’t recall if he elevated the memo’s recommendations to Rich Coleman, the minister responsible for gaming in 2009.

https://globalnews.ca/news/7605328/bc-lottery-corp-ceo-testimoney-cullen...

jerrym

When BC Liberal government, after repeated warnings since 2006 of organized crime using casinos to launder money, through minister Mike de Jong finally acted in August 2015 "to refuse mysterious cash transactions from foreign high rollers", the BC Lottery Commission,  which has a mandate to determine whether corruption is occurring in the gambling industry, concluded that cracking down would cost hundreds of millions a year and did nothing. When BC Lottery CEO Jim Lightbody asked de Jong if this meant all transactions, de Jong said no so Lightbody logically continued to do nothing  in 2015 and 2016 to deal with the issue even after "the enforcement branch’s general manager, John Mazure, repeatedly directed Lightbody to do more to understand the origins of massive cash transactions flooding into several B.C. casinos".  Lightbody's answer to the Cullen Commission: he didn't understand the directions that were being given to him. BC Liberal Minister de Jong’s deputy minister, Cheryl Wenezenki-Yolland refused to intervene regarding the "dirty money" despite being repeatedly asked by the enforcement branch’s general manager, John Mazure. Lightbody said he was told that the minister (de Jong) would deal with the problem on the enforcement side.  Nothing was done about the problem until the NDP came to power. Lightbody said that when he asked Rod Baker (ya the guy who flew to the Yukon with his wife to fraudulently get flu shots in an indigenous communities) about the money, Baker said checking into where the money came from would scare away customers. 

The CEO of the BC Lottery Corporation did not follow a direction from the provincial government in 2015 to refuse mysterious cash transactions from foreign high rollers because he concluded it would lead to losses of hundreds of millions each year, a public inquiry into money laundering heard.

In August 2015 — after B.C.’s government learned of a major RCMP organized crime investigation at Richmond’s River Rock Casino — then-gaming minister Mike de Jong sent a letter to CEO Jim Lightbody directing the Lottery Corp. to ask high rollers to declare their source of cash, a B.C. government lawyer told the Cullen Commission Friday. ...

The commission — which is mandated to determine whether corruption allowed money laundering to take root in B.C. casinos — has heard that the Gaming Policy and Enforcement Branch concluded that after 2010, suspicious cash transactions via Asian gangs and loan sharks and Chinese high rollers were growing exponentially, and that in 2014, suspected drug-money laundering in B.C. casinos was forecast to reach about $200 million per year....

And the Lottery Corp. was alerted with an internal investigation report in 2014 that said most Chinese VIPs paid cash that had been borrowed from loan-sharking gangs in Richmond back in China.

On Friday, government lawyer Kaitlyn Chewka read minutes from an October 2015 Lottery Corp. board meeting where Lightbody and board chair Bud Smith (former attorney general Social Credit - whose members largely became Liberals when Social Credit collapsed ) discussed the impacts of de Jong’s August 2015 direction to source funds from high rollers.

The board’s response was discussed “given management estimates the effect of the direction for BCLC if fully implemented would be hundreds of millions of dollars,” meeting minutes said, according to Chewka.

The Lottery Corp. didn’t require high rollers who were bringing large amounts of cash into casinos to declare their source of funds until January 2018, after an independent review into money laundering at B.C. casinos made the recommendation.

 On Friday, government lawyer Kaitlyn Chewka read minutes from an October 2015 Lottery Corp. board meeting where Lightbody and board chair Bud Smith discussed the impacts of de Jong’s August 2015 direction to source funds from high rollers.

The board’s response was discussed “given management estimates the effect of the direction for BCLC if fully implemented would be hundreds of millions of dollars,” meeting minutes said, according to Chewka.

The Lottery Corp. didn’t require high rollers who were bringing large amounts of cash into casinos to declare their source of funds until January 2018, after an independent review into money laundering at B.C. casinos made the recommendation.

The inquiry heard that throughout 2015 and 2016, the enforcement branch’s general manager, John Mazure, also repeatedly directed Lightbody to do more to understand the origins of massive cash transactions flooding into several B.C. casinos, as well as the foreign high-rollers presenting the cash and their sources of wealth.

“Mr. Lightbody, I put it to you: The reason why (BC Lottery Corp.) didn’t put in place a general source (of funds) requirement sooner is, it would result in a loss of revenue,” Chewka said. “Would you agree with me?”

Lightbody said he never understood directions from de Jong or Mazure to be asking the Crown corporation to apply source of funds declarations across the board. Instead, it decided to vet dozens of high rollers that it had concluded were connected to organized crime or were high risks for money laundering, Lightbody said.

The CEO of the BC Lottery Corporation did not follow a direction from the provincial government in 2015 to refuse mysterious cash transactions from foreign high rollers because he concluded it would lead to losses of hundreds of millions each year, a public inquiry into money laundering heard.

In August 2015 — after B.C.’s government learned of a major RCMP organized crime investigation at Richmond’s River Rock Casino — then-gaming minister Mike de Jong sent a letter to CEO Jim Lightbody directing the Lottery Corp. to ask high rollers to declare their source of cash, a B.C. government lawyer told the Cullen Commission Friday. ...

The commission — which is mandated to determine whether corruption allowed money laundering to take root in B.C. casinos — has heard that the Gaming Policy and Enforcement Branch concluded that after 2010, suspicious cash transactions via Asian gangs and loan sharks and Chinese high rollers were growing exponentially, and that in 2014, suspected drug-money laundering in B.C. casinos was forecast to reach about $200 million per year. ...
And the Lottery Corp. was alerted with an internal investigation report in 2014 that said most Chinese VIPs paid cash that had been borrowed from loan-sharking gangs in Richmond back in China.

On Friday, government lawyer Kaitlyn Chewka read minutes from an October 2015 Lottery Corp. board meeting where Lightbody and board chair Bud Smith discussed the impacts of de Jong’s August 2015 direction to source funds from high rollers.

The board’s response was discussed “given management estimates the effect of the direction for BCLC if fully implemented would be hundreds of millions of dollars,” meeting minutes said, according to Chewka.

The Lottery Corp. didn’t require high rollers who were bringing large amounts of cash into casinos to declare their source of funds until January 2018, after an independent review into money laundering at B.C. casinos made the recommendation.

The inquiry heard that throughout 2015 and 2016, the enforcement branch’s general manager, John Mazure, also repeatedly directed Lightbody to do more to understand the origins of massive cash transactions flooding into several B.C. casinos, as well as the foreign high-rollers presenting the cash and their sources of wealth.

“Mr. Lightbody, I put it to you: The reason why (BC Lottery Corp.) didn’t put in place a general source (of funds) requirement sooner is, it would result in a loss of revenue,” Chewka said. “Would you agree with me?”

Lightbody said he never understood directions from de Jong or Mazure to be asking the Crown corporation to apply source of funds declarations across the board. Instead, it decided to vet dozens of high rollers that it had concluded were connected to organized crime or were high risks for money laundering, Lightbody said.

And, he testified, he established with de Jong’s deputy minister, Cheryl Wenezenki-Yolland, that de Jong “didn’t mean all cash transactions” needed a declaration on source of funds. Lightbody supported his claim with an undated note from his personal log, the inquiry heard.

However, the inquiry has heard that Mazure complained that Lightbody was refusing to follow the branch’s anti-money laundering directions. ...

Lightbody had testified a day earlier that an “influx” of wealthy gamblers from China and Hong Kong arrived in Vancouver after the 2010 Winter Olympics, and that Lottery Corp. did not know where they obtained duffel bags of $20 bills bundled in elastic bands which they used to buy casino chips. ...

And in September 2015, he testified, he asked senior B.C. officials whether the corporation should reduce or eliminate the “high-limit” baccarat games that had been raised to limits of $100,000 per hand in 2014, in order to cater to Chinese VIPs. He said he was told that the BC Liberal minister responsible at the time, Mike de Jong, “would deal with this from an enforcement side.” ...

According to Lightbody, Great Canadian Gaming president Rod Baker complained that interviews were scaring the casino’s VIPs away, and he asked Lightbody to stop hurting the River Rock’s business.

https://globalnews.ca/news/7607782/bc-lottery-corporation-mysterious-cas...

jerrym

When the NDP became government four of the top executives in BC Lottery Corp, all BC Liberal appointees, left within a eight month period as more questions arose over money laundering through casinos, following former RCMP officer Peter German's report in 2018 on dirty money. The 2019 article below discusses the situation. 

B.C. Lottery Corporation’s head of security and compliance for almost four years suddenly departed July 2.

A mid-afternoon internal staff memo announced the end of Rob Kroeker’s employment with the Crown corporation. A similar statement published later on the BCLC website said it was “effective today” and thanked Kroeker for his service. No reason was given.

It is the fourth high-profile BCLC executive departure since last November, but the most-significant because it comes just over a year since Peter German’s scathing 2018 Dirty Money report on money laundering in B.C. casinos. 

Preceding Kroeker out the door at BCLC’s Virtual Way Vancouver office were: 

  • Susan Dolinski, who left last November after more than 11 years  as vice-president of public affairs;
  • and Monica Bohm, who left in May as vice-president of digital and enterprise services. She had been with BCLC for 11 and a half years.

Chief financial officer Amanda Hobson’s resignation was announced in an April 25 news release that included complimentary quotes from Lightbody. She is joining Finning as senior vice-president of investor relations and treasury. Her bio remains this week on the BCLC website. BCLC did not issue news releases when Dolinski and Bohm left. ...

Kroeker, a former RCMP officer, joined BCLC after heading security at Great Canadian Gaming’s River Rock Casino Resort. After the NDP took over in July 2017, British Columbians learned that River Rock had been a magnet for transnational money launderers, peaking in July 2015. Kroeker had boasted in an August 2015 interview with Business in Vancouver that it would be impossible to launder money at River Rock. Meanwhile, BCLC financial reports boasted of the revenue from high stakes Asian gamblers.

Under Premier Christy Clark, the BC Liberals appointed Kroeker to the Justice Institute of B.C. board. He was forced out as chair in October of last year in the wake of the German report, which detailed how money from whale gamblers from China flowed into the illicit drug trade and real estate market.

https://thebreaker.news/business/bclc-security-boss-gone/

 

jerrym

In testimony this month at the Cullen Commission, that despite being told that high rollers with connections to international drug trafficking and the financing of terrorism were frequenting BC casinos, casino executives continued to push the Liberal government in 2015 to not have the RCMP interview these clientele. Testimony also confirmed that BC Liberal Minister Mike de Jong was at meetings in which police updated officials about the situation. Yet nothing was done about the situation. 

Lottery Corp. compliance executives responded  when pressed that they would work with the casinos, calming the executives down. The commission also learned that not all suspicious transactions, even those in the millions with samll bills, were reported to authorities by the casinos despite being required to do so. At the same time Michael Graydon, who had been the head of BC Lottery until 2014 and then an exceutive with Edgewater Casino,  pushed his own casino execs to bring in more money for the casino. The incestuous, revolving-door relationship between the regulators and the casinos is all too evident in how it could help make corruption so much easier.

Two B.C. casino company executives, including Great Canadian Gaming CEO Rod Baker, complained to BC Lottery Corporation executives in 2015 that their revenue was taking a hit because Lottery Corp. investigators had questioned high rollers at Richmond’s River Rock Casino who were connected to a Chinese transnational gang, the province’s money-laundering inquiry has heard.

On Monday, lawyers for the Cullen Commission questioned Lottery Corp. chief operating officer Brad Desmarais about the complaints from Baker and Vancouver Edgewater Casino executive Michael Graydon. Graydon contacted Desmarais in September 2015 to complain about the business impact of high-roller interviews, the inquiry heard. And Baker had called Lottery Corp. CEO Jim Lightbody.

The Crown corporation had learned from RCMP in July 2015 that a number of River Rock high rollers were potentially funded by a transnational drug-trafficking network with links to terrorist financing, the inquiry heard. This caused the Lottery Corp. to question high rollers whom police had linked to organized crime suspect, Paul King Jin, about their source of funds. But the casino executives felt lucrative patrons were being scared away. ...

“We are acutely aware of the revenue implications for both of us,” Desmarais emailed to Graydon, the inquiry heard. Desmarais said he was “pressing” B.C.’s casino regulator to disrupt illegal casinos where the high rollers may have taken their business. ...

The inquiry also heard about a September 2015 email from Lottery Corp. CEO Jim Lightbody to Desmarais. Lightbody had previously testified that Baker complained to him about driving away River Rock high rollers with source-of-funds interviews.

“I called Rod today … reiterated (Lottery Corp. compliance executives Desmarais and Robert Kroeker would work with Great Canadian staff),” Lightbody’s email to Desmarais said. “He seemed to calm down.” ...

A River Rock patron made $1.8 million in transactions with small bills in just seven days, the inquiry heard, and casino staff had not reported some of the high roller’s suspicious transactions. In the middle of the spree Tottenham warned Desmarais about the alarming transactions and that the patron was likely to return to the casino the next night.

Desmarais responded, asking if River Rock could question the VIP on his source of funds. However, the patron continued with suspicious cash transactions and River Rock staff did not question him, the inquiry heard.

“I recognize we do not want to jeopardize revenue,” Tottenham said in the email to Desmarais, adding that it might be best for Lottery Corp. investigators to interview the patron instead. ...

The inquiry heard last week that Graydon — who was CEO of the Lottery Corp. until 2014 — had pressured executives to meet their revenue targets or else have their bonuses withheld.

The revenue pressures occurred while B.C. Gaming Policy Enforcement Branch staff were urging Lottery Corp. management to crack down on hundreds of millions in $20 bills flooding into B.C. casinos through the bets of Chinese high rollers that the branch believed were funded by Asian gangs....

When Desmarais was hired in 2013, he pushed back on the enforcement branch’s warning that organized crime was flooding B.C. casinos with drug cash from China, the inquiry heard.

In one case, he wrote an internal report that suggested legitimate underground banking was the source of funds for foreign high rollers, the inquiry heard, and that large amounts of cash in B.C. casinos were “often erroneously associated to organized crime.”

The inquiry also heard that in December 2014, Desmarais provided a “technical briefing” on B.C. casinos to the deputy minister responsible for gaming, Cheryl Wenezenki-Yolland, and that Lightbody and a staffer for then-gaming minister Mike de Jong were there too. ...

Latimer pointed out that Wenezenki-Yolland raised a concern that underground banking transactions could breach Canada’s “banking act.” Desmarais told Latimer that he agreed with Wenezenki-Yolland, yet took no action on the concern she highlighted.

And Desmarais maintained he still believes most River Rock high-rollers were legitimate business persons that were “unwitting” of being funded by transnational drug-trafficking and money laundering schemes, which is what the RCMP has alleged.

https://globalnews.ca/news/7612942/bc-casino-executives-complaints-culle...

jerrym

Michael Graydon, BC Lottery Corporation CEO, pushed his executives to increase revenue via high-limit gambling, thereby violating  Canada’s anti-money laundering watchdog rules and his execs earned 25% bonuses for meeting increased revenue targets that violated these rules. 

A former BC Lottery Corporation CEO drove his executives to increase revenue via high-limit gambling but didn’t follow a direction from Canada’s anti-money laundering watchdog that required B.C. casinos to establish the source of massive cash transactions, a public inquiry has heard. 

At the Cullen Commission on Thursday, Michael Graydon, who stepped down as Lottery Corp. CEO in 2014 to manage a Vancouver casino, was examined on his revenue-generation orders.

Commission lawyers have been building the case that Lottery Corp. and casino managers hungered after revenue from foreign high rollers, even after being warned by investigators that B.C.’s casinos were being used to launder money by Chinese transnational drug gangs.

Graydon testified that on his watch, bet limits rose from $45,000 per hand in 2008 to $100,000 per hand in 2014. He also said casino managers and the Lottery Corp. targeted high rollers from casinos in Macau and spent money on facilities to attract these so-called “VIP” baccarat players. ...

The inquiry has previously heard that in 2010, B.C.’s Gaming Policy and Enforcement Branch started to urge the Crown agency to cap the acceptance of tens of millions in $20 bills flooding into casinos through loan sharks and the VIPs. Investigators at both the branch and the Lottery Corp. believed the cash — which came into casinos wrapped in elastic bands and carried in grocery bags and boxes — was drug money.

But after a branch report warned Graydon the Lottery Corp.’s top 22 high rollers were responsible for suspicious “buy-ins” of $45 million, he pushed back, the inquiry heard, arguing that cracking down on cash buy-ins would impact Lottery Corp. revenue. ...

Commission lawyer Patrick McGowan read two emails that Graydon sent to his executives in December 2011, including Jim Lightbody, who took over for Graydon as CEO in 2014. McGowan said the emails showed Graydon was only focused on revenue generation, but ignored his mandate to generate income responsibly and with appropriate anti-money laundering measures. ....

 

“I want to stress to the group that it is absolutely critical that we come in on budget from a net-income perspective this year,” one email said, according to McGowan. “If we do not, I also want to be very clear there will be no opportunity to pay out incentive this year … the tone in government is not good these days … So remember the consequences you will unleash if you do not participate with some energy through this process.”

A second email said: “It is imperative that your division comes in with these numbers or better. As I have said before, Victoria is not keen to pay incentive if budgets are not met.”

Graydon told McGowan that some of his executives earned bonuses of up to 25 per cent of their salaries, and that he used incentives to motivate his team. When McGowan asked if any B.C. government ministers responsible for gaming had pressured Graydon to produce revenue, he said he understood his mandate was to meet the Lottery Corp.’s budget projections. ...

In a stunning statement, Graydon said he recalled that Fintrac, Canada’s anti-money laundering agency, wanted the Lottery Corp. to accept massive suspicious cash transactions so that the agency could report the data back to Fintrac.

“Fintrac actually wanted us to accept the cash,” Graydon said. Later, a lawyer for the federal government challenged Graydon on the matter, and he acknowledged he had no evidence to back his claim. “No, this was just a recollection from an observation,” Graydon said, later adding he was “likely” mistaken.

B.C. government lawyer Kaitlyn Chewka then read a December 2012 email addressed to Graydon and titled “Fintrac audit.” A Lottery Corp. anti-money laundering manager had alerted Graydon that Fintrac “feels we need to have the service providers ask where the money is coming from if someone attends with an inordinate amount of cash.” Chewka told Graydon that he didn’t follow Fintrac’s direction and that the Lottery Corp. didn’t require patrons to declare source of funds for large cash transactions until 2018.

https://globalnews.ca/news/7635314/bc-lottery-corp-ceo-fintrac-cullen-co...