Bc Casino Money Laundering Report

A saleswoman shows customers an Aston Martin at a luxury car dealership in Vancouver, British Columbia on October 10, 2015. Sales of expensive cars and export to China have jumped and is being tied to money laundering (Julie Gordon/Reuters)

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Bc Casino Money Laundering Reporting

A report that was privately commissioned in 2016 to look at the problem of money laundering and criminal activities in BC casinos was released publicly today by the province. The government said the findings reveal “suspicious cash transactions” at BC gaming facilities, including the River Rock Casino in Richmond. BC casino scandal gets dirtier as report reveals anti-money laundering investigators got bonuses for higher BCLC gambling revenue. If you haven’t heard about the money laundering investigation surrounding British Columbia’s lower mainland casinos, you must have been living under a rock.

Money laundering definition from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) : the process used to disguise the source of money or assets derived from criminal activity. There are generally three stages in the process:

• -Placement: involves placing the proceeds of crime in the financial system;
• -Layering: involves converting the proceeds of crime into another form and creating complex layers of financial transactions to disguise the audit trail and the source and ownership of funds (e.g., the buying and selling of stocks, commodities or property); and,
• -Integration: involves placing the laundered proceeds back in the economy under a veil of legitimacy. (FINTRAC)

Last year an international investigation led by Peter German, former deputy commissioner of the Royal Canadian Mounted Police, estimated that British Columbia’s casinos were being used to launder up to $1 billion annually. The report suggested the money was coming primarily from Asian crime groups who then invested in expensive Vancouver and area real estate.

B.C. Attorney General David Eby (background) and investigator Peter German at the release of German’s report, Dirty Money, in Vancouver, June 27, 2018, into money laundering at B.C casinos, German’s latest report looks at laundering through exotic car purchase and export. (Yvette Brend/CBC

Casinos- now luxury cars

Suddenly Vancouver has also become a North American hotbed for extremely expensive exotic cars.

Now investigator Peter German has found the loophole. While large scale transactions involving cash raise alarms, this has not been the case for vehicle sales, including super exotic cars where dealers are not required to report large transactions to FINTRAC.

B.C. Attorney General David Eby noted in a news conference about the findings said ,“In the luxury-car market, there is no financial reporting of large cash purchases, no oversight of international bank wire transfers and no apparent investigation or enforcement. The report also uncovered a complicated luxury-vehicle export scheme.”

Sales of exotic cars have skyrocketed in Vancouver and at other exotic dealerships elsewhere in the province. Provincial sates tax is returned to buyers if the car is not be licensed in B.C. such as if it is exported. Last year $28 million in tax was rebated to buyers who quickly exported the cars, mainly to China.(Christina Low)

Criminals use straw buyers who sometimes bring bags of cash for vehicle purchase or non-identifiable bank drafts, from small amounts of international wire transfers sent to multiple bank accounts., Perhaps surprisingly, a story in the Vancouver Sun noted that some of the so-called straw buyers were not able to speak English.

The vehicle then is turned over to the “real” buyer who may then resell to an exporter who ships it offshore, usually to China.

The Lamborghini Aventador SVJ on display at the Auto Exotica exhibit of the 2019 Canadian International AutoShow. Dealers at the show say sales have been kicked into overdrive in the last 3 years, from a few hundred to thousands, often to ‘well healed newcomers” (Philip Lee-Shanok/CBC

Adding insult to injury, once the car is sold abroad, the seller can apply for a rebate on the provincial sales tax. (PST) which on an expensive car can mean a huge sum is returned to the buyer.

Huge increase in exports and rebates given

German’s report notes that prior to 2014, PST rebates were fewer than 100. That jumped to over 700 in the following two years, then to over 3,600 in 2016. Last year the number of rebates give for luxury and exotic cars exported was over 4,400. The rebates total $85 million since 2013, with $28 million of that in 2018.

The report indicates several buyers have made multiple purchases and rebate requests.

The 300 page report is the second portion of investigator Peter German’s look into money laundering in British Columbia. Last June his “Dirty Money” report found substantial money laundering through the province’s casinos.

Video released by B.C’s attorney general shows casino customers bringing in bags of cash to one of B.C.’s casinos in an apparent act of money laundering. (B.C. attorney general)

British Columbia is now studying the report towards developing new rules, however coordination at the federal level would also be required

German’s full report will include money laundering and the real-estate market in the province.

Additional information-sources

VANCOUVER — Larger amounts of suspicious cash with suspected links to money laundering and organized crime began showing up at British Columbia's casinos while the province prepared to host the 2010 Winter Olympics, a former gaming regulator told the inquiry into money laundering.

Larry Vander Graaf said Thursday there was an increase in suspected illegal money at casinos at the same time the RCMP was planning Canada's largest-ever security effort to police the Olympics in Vancouver and Whistler.

Vander Graff, a former executive director of the B.C. Gaming Policy Enforcement Branch, said while serious dirty money concerns were mounting at casinos, police were also working on Olympic security.

'You have to remember the time frame, too,' Vander Graaf testified.

'In 2007, 2008, 2009 there was the biggest security endeavour in Canadian history going on in Vancouver, the 2010 Olympics. The preparations for the 2010 Olympics was significant and the RCMP was tasked with that.'

He said he wasn't making excuses for the police, but staffing issues at the RCMP's now disbanded Integrated Illegal Gaming Enforcement Team were 'evident.'

Vander Graaf, who said he was fired in 2014 by the B.C. government, said the suspicious cash started appearing at casinos in 2007 and three years later it reached the point where loan sharks connected to organized criminals were waiting in parking lots with bags packed with $20 bills.

'It was like a drive-in,' he said. 'There's no question, where there are loan sharks there was money laundering and when the money laundering picked up, the loan sharks activity picked up.'

The B.C. government launched a public inquiry following several reports that concluded hundreds of millions of dollars in illegal cash was impacting B.C.'s real estate, luxury vehicle and gaming sectors.

Vander Graaf said his agency wanted limits put on the amounts of cash in $20 bills being used at the casinos to buy chips but the Crown-owned B.C. Lottery Corp. did not impose a limit.

Bc Casino Money Laundering Report Template

'The integrity of gaming was being compromised and we feel we had to take action,' he said.

'I still believe to this day ... when we have the integrity of gaming being impacted by large cash infusions that are in $20,000 bundles with elastic bands around it, that there should have been action in relation to stopping that at the casinos.'

Vander Graaf said the lottery corporation did not make a cash amount order because it could not be proven beyond a reasonable doubt that the money was from proceeds of crime or money laundering.

Last week, Fred Pinnock, a former RCMP officer in charge of the now disbanded illegal gaming enforcement team, testified a member of the B.C. legislature told him in 2009 the province's gaming minister was focused on revenues being generated at casinos, not organized crime.

Vander Graaf's testimony is to continue Friday.

— By Dirk Meissner in Victoria.

This report by The Canadian Press was first published Nov. 12, 2020.

The Canadian Press