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'Dirty Money' report makes links between real estate prices, opioid crisis

Last Updated Jun 27, 2018 at 4:19 pm PDT

(Marcella Bernardo, NEWS 1130 Photo)
Summary

A report exposing extensive money laundering in BC casinos claims they served as laundromats for criminals

48 recommendations have been made in an independent review of BC's anti-money laundering practices

VANCOUVER (NEWS 1130) – Casinos — unknowingly — served as laundromats for criminals: That’s the key finding of an independent report exposing extensive money laundering in BC casinos dating back several years.

The review, conducted by former RCMP Deputy Commissioner Peter German, has also identified direct connections to the real estate and illegal drug industries.

“Thanks to Doctor Peter German’s work, I can tell you that it is tied to the opioid crisis, that has taken thousands of people from their families,” Attorney General David Eby says. “It is linked to the real estate market and housing prices that have made life un-affordable for British Columbians.”

“The era of inaction and denial is over,” he adds. “We are moving immediately to get dirty money out of BC casinos.”

Eby ordered the review last year after learning gamblers were entering casinos with hockey bags full of millions of dollars in small notes.

“The [Peter] German report paints a troubling picture of government that didn’t respond effectively to pervasive money laundering in BC casinos,” Eby adds. “German found they didn’t effectively detect, prevent or prosecute it – they turned a blind eye to it.”

Titled “Dirty Money,” the independent review highlights 48 recommendations, some of which Eby says have already been implemented.

They include the need for an independent regulator to oversee money laundering investigations.

The report also calls for a designated policing unit for the gaming industry with a focus on Lower Mainland casinos.

“Which has a 24 hour, seven day a week, presence and can deal with everything that occurs within the legal casino industry,” German explains. “It will be a source of support for municipal police and RCMP units, will become specialized in gaming offences, and will be a first point of contact within the industry on most criminal matters.”

The report also finds the BC Lottery Corporation, Ottawa, Victoria and police need to improve tracking methods.

The RCMP is also responding to the report and in a statement says:

“…At times government is briefed on sensitive information concerning police investigations that cannot be released.  However, it was the decision of government to disband [the] Integrated Illegal Gaming Enforcement Team (IIGET).”

The BC Lottery Corporation has issued a short statement saying it will work with the provincial government to implement the recommendations.

BC Liberals React

The opposition Liberal Party says it was aware of the extent of money laundering within the province and was taking steps to address the issue, but was advised by law enforcement not to go public with the issue.

“This is a multi-jurisdictional investigation that’s been going for many years with many layers of law enforcement as well. Based on their advice, the BC Liberal government decided not to make it public,” Richmond-Queensborough MLA Jas Johal said on behalf of the party Wednesday.

The current ministry of Public Safety and Solicitor General declined to comment on provincial policy for requests from police to withhold information from the public.

Johal accused the NDP and Eby of sensationalizing the issue by making it public.

“So now we are asking, where’s the beef? Where are the arrests? Where is the prosecution? He says he has names and videos. What is he doing about it?” he said.

The Liberals disbanded the Illegal Gaming Enforcement Team in 2009 because it was not providing “value for dollar,” according to the report. A replacement Joint Integrated Gaming Investigation Team was launched in 2015 and the report recommends maintaining that program.

While actions were taken, the report says the province focused primarily on loan sharking, rather than illegal activity within casinos.

BC Green Party welcomes independent review findings

The leader of the BC Green Party says the money laundering report “demonstrates systemic failure within the previous government to adapt our laws and regulations to changing realities.”

Andrew Weaver issued a statement following the report’s release, adding it demonstrates the need for “wholesale policy change.”

“We have seen significant growth and change, both in B.C. and globally, since many of our laws and regulations were first developed,” he says. “Outdated policies have left our province vulnerable to exploitation as transnational criminal entities have become increasingly more sophisticated.”

Weaver is calling for the province to now provide timelines for implementing recommendations.

Expert sees challenges with implementing some recommendations

Financial crime expert Garry Clement — former national director of the RCMP’s Proceeds of Crime Branch — had some early involvement in German’s investigation and agrees there is a large amount of dirty money flowing through casinos and into the real estate industry.

“What we are seeing is a lot of shell companies, a lot of numbered companies, being involved in acquiring property without knowing who the beneficial owners are,” he tells NEWS 1130.

“As a result of that, I think we are seeing extensively that Vancouver is being used heavily by trans-national organized crime.”

While Clement commends Eby for facing problems in BC casinos and trying to stem criminal activity, he says it will be a challenge to implement some of the recommendations.

“You have to understand that organized crime groups have become far more sophisticated than they were 30 years ago. They’re using everything available to them, from electronics to the dark web to cryptocurrencies. All of this is going to continue but if we don’t start getting on top of it, we will never ever get control of it.”

You can read the full report below:

German_Gaming_Final_Report