Wednesday, October 28, 2020

Questions raised over B.C. government response on money laundering


The new report charting B.C.’s rise to become a global money-laundering hotbed raises questions about how the former provincial Liberal government responded to the “Vancouver model” of money laundering that might have cleaned more than $100-million in dirty cash at local casinos.

As early as 2011, the former B.C. government was alerted to the fact that staff at two suburban Vancouver casinos were converting millions of dollars into chips in what the RCMP suspected was a sophisticated money-laundering scheme for organized-crime groups.

Rich Coleman, the minister overseeing the gambling portfolio at the time, objected to one Mountie’s public assertion – made in a CBC News investigation – that drug dealers were cleaning their cash in this manner.

Instead, Mr. Coleman asked the head of the provincial office of civil forfeiture to investigate the issue. The resulting 2011 report stated that gangsters considered losing at casinos the cost of laundering their money and that B.C.’s gambling Crown corporation needed to update its approach to tackling this serious issue.

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In response to that 2011 report, neither the Crown-owned B.C. Lottery Corp. (BCLC), which is responsible for maintaining and growing the business of gambling, nor the gaming policy and enforcement branch, the provincial casino regulator, implemented reforms that would have made casinos less vulnerable to such illegal activity.

That is just one of several instances where the government and its agencies responsible for the gambling industry failed to take the action necessary to curb money-laundering in the province, according to a new report from Peter German. B.C. Attorney-General David Eby called for Mr. German’s independent investigation last fall, after the government’s gambling-enforcement branch showed him recent surveillance video of gamblers walking into casinos with suitcases and a hockey bag full of $20 bills.

Liberal Party Leader Andrew Wilkinson, who was first elected in 2013, said he became aware of the issue through news reports in recent years, but that his government gave a joint illegal-gambling investigation team the funds and authority to “aggressively pursue money laundering” in 2015, which led to a 60-per-cent drop-off in the number of suspicious transactions reported at casinos. Mr. Coleman and Mike de Jong, who was the Liberal government’s long-time finance minister, did not answer their cellphones on Thursday.

Mr. Wilkinson said he has only talked to those two “only in the most general terms, not about specific events” regarding money laundering in the province.

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“[Their] decisions have to be viewed carefully when covered in retrospect and with full facts in hand, and I’m not in a position to have the full facts in hand, so I’m not about to pass judgment,” Mr. Wilkinson said. “Obviously, our goal as a society is to drive that down to zero and we hope the German report helps in doing that.”

Critics of the former Liberal government say the party could have handled this file much more effectively during its 16 years in power.

Andrew Weaver, Leader of the three-MLA Green Party, said he was particularly troubled by the government’s 2009 disbanding of a specialized enforcement team set up to monitor and investigate illegal gambling.

At the time, Mr. Coleman, the minister in charge, told The Globe and Mail that the force was shut down because it was inefficient, had a high staff-turnover rate, hadn’t prepared a business plan and was redundant. He also denied reports B.C.’s civil-service casino investigators did not have the resources or mandate to target criminals operating within those facilities.

Right before the unit was shuttered, the B.C. government had received reports of 284 gambling incidents involving organized criminals, including two murders and a child abduction.

“Why was that shut down and then not replaced? They replaced it in 2016 and they came back with the other joint integrated gaming-investigation team,” Mr. Weaver said in an interview on Thursday.

“Why did they wait for so long to actually do anything?”


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