Casino money laundering suspicious cases soar

Criminals love casinos. They’re great places for loan sharking and passing counterfeit money.
And even more important for the serious crooks, casinos are the easiest place to launder money.
The CBC used freedom of information requests to learn that millions of dollars in suspicious transactions flowed through two B.C. casinos in three months last year. The casino companies told B.C. Lotteries, but no one passed the information on to police immediately.
These aren’t slightly suspicious transactions. In one case, a man entered a New Westminster casino with $1.2 million worth of chips. He didn’t place a bet. He just turned them in and took the money in cash.
He told staff he was boarding a flight and was concerned the money might look suspicious. So the casino gave him a letter confirming the money was a casino payout.
It’s a classic money-laundering scenario. Crime – drug dealing, robbery, whatever – can produce lots of cash. Banks have to report deposits of more than $10,000 to FINTRAC, a federal agency that fights money laundering and organized crime. Even if money is broken into smaller deposits to come under the limit, a criminal might end up having to explain where all the money came from.
Instead, criminals can buy chips in casinos, cash them in and get a cheque or, in this case, cash with a letter suggesting they were winnings. The money is clean.
In another case uncovered by the CBC, a man entered a Richmond casino with a bag stuffed with $460,000 in $20 bills and bought chips. The casino reported that there was nothing suspicious in the transaction.
All told, there were 90 large transactions worth $8 million in three months.
The RCMP only learned about this after the fact. Insp. Barry Baxter, with the unit that tracks the proceeds of crime, said the police suspect money laundering. “The common person would say this stinks,” he said.
Casinos also have to report large transactions to FINTRAC, the federal Financial Transactions and Reports Analysis Centre, and also report to police and the province’s Gaming Policy Enforcement Branch. But the reports aren’t required for 30 days; a quick first step would be to require immediate reporting to police.
Rich Coleman, the minister responsible for gambling, initially downplayed the reports. He later promised an investigation.
But none of this is surprising.
The government’s Gaming Policy and Enforcement Branch 2006 annual report, for example, warned of a crime explosion at casinos, with investigations into offences like loan sharking and money laundering more than doubling in a year.
Last year, it was revealed B.C. Lotteries had been fined $670,000 under federal laws aimed at combating money laundering and terrorism financing. There were more than 1,000 infractions; in eight cases, the most basic information wasn’t collected when people walked out of casinos with more than $10,000.
FINTRAC said fines are only imposed for a “persistent, chronic failure to comply with the law.”
Despite the warnings, enforcement has been minimal. In 2009, the government shut down the five-year-old specialized police unit created to target gambling-related crime.
And the enforcement branch’s just-released annual report for the 2009-10 fiscal year reveals that it opened 635 investigations into money laundering, loan sharking and counterfeit offences in casinos, without laying a single charge.
Again, none of this is surprising. Casinos want to make money. Coleman and B.C. Lotteries are responsible for increasing the number of gamblers in the province, the average amount each one loses and the province’s take.
Cracking down on transactions that could be linked to money laundering is a threat to those goals. Casinos fear that asking for information from big gamblers could drive away some of their best customers.
The obvious, and long overdue, first step is end the inherent conflict in having one minister responsible both for promoting gambling losses and fighting crime in casinos.
Footnote: The CBC reported that reports to FINTRAC showed that while the dollar value of suspicious transactions at casinos in other provinces stayed the same or went down in the past year, they tripled in B.C.

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