Money Laundering under Liberal Government: Cullen Commission

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...

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 interview, Rampone 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...

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...

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...

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...

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...

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...

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...

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/

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...