Catching Up with BC Money Laundering Inquiry Progress

The story is complicated and dates back several years. It is not easy to jump in and figure out what’s going on without understanding what transpired until now. The story making headlines across Canada, in particular in British Columbia, is about the Cullen Commission investigating money laundering in BC.

How exactly does this pertain to casinos and gambling?

Criminals have long used casinos and gambling to launder money. Incidents of such activity through casinos in BC in the past decade brought the issue to the attention of lawmakers, and a massive inquiry began in 2019.

Whistleblowers Lead to Inquiries

BC Attorney General David Eby has been focused on eradicating money laundering for years. And over those years, various laws and regulations curbed those illegal activities. A 2018 report showed that money laundering through BC businesses had been a multi-million-dollar affair but diminished to approximately $200K through lawmakers’ attention to the matter.

A whistleblower report in May 2019 cut short any celebratory feelings.

Muriel Labine was a casino supervisor for a Richmond property owned by the Great Canadian Gaming Corporation in the late 1990s when BC increased betting limits at casinos from $25 per hand to $500, allowed baccarat, and authorized later hours. As the VIP gamblers, typically Asian males, flocked to her casino, she noticed.

And she took notes in a detailed journal.

Labine witnessed grocery bags full of bundles of cash. She noted Macau triads like the Big Circle Boys infiltrating casinos, trafficking drugs and laundering money while also doing business as loan sharks. She tracked cash flow patterns.

As safety became an issue, Labine took her concerns to company executives, who sometimes implemented safety protocols. However, she claimed she was threatened into silence, that some of the staff was involved in the criminal activities, and the traffic benefited the casino’s bottom line.

Great Canadian Gaming challenged Labine’s claims, but the former VP of Great Canadian Gaming, Adrian Thomas, did corroborate some of her assertions.

Inquiries Lead to Commissions

The whistleblower information prompted BC Premier John Horgan to demand an investigation. He and a number of cabinet members established a commission with BC Supreme Court Justice Austin Cullen at the helm. Local mayors to Canadian Prime Minister Justin Trudeau all supported the inquiry.

Cullen spent months applying for court orders, ordering the seizure of casino records, and conducting interviews.

The inquiry went far beyond casinos, however. Authorities had linked money laundering to financial institutions and even the real estate industry, so the coverage area was quite significant.

By October, Cullen collected a list of organizations and groups that volunteered to be a part of the inquiry. That list included governmental bodies as well as the Canadian Gaming Association and the British Columbia Lottery Corporation (BCLC).

Commission Leads to Hearings

The public hearings began in February 2020 at the Vancouver federal courthouse. The list of appearances scheduled included representatives of the Cullen Commission, BCLC, and Great Canadian Gaming Corporation…to name a few.

The first three hearings in February led to, well, a pandemic. The coronavirus pandemic forced all non-essential businesses to close in mid-March, and in-person hearings were ill-advised. Members of the commission did conduct interviews and upload transcripts to the inquiry’s website.

A break ensued during the summer months for elections. By October, the schedule reflected testimony from representatives from BCLC. That’s when it got interesting.

The first day of October testimony brought Steve Beeksma to the fore. He worked for the BCLC in the anti-money laundering department after having worked in casino surveillance for Great Canadian Gaming. He told the commission that managers at the River Rock Casino in Richmond were irritated by “aggressive” questioning of high-roller customers.

BCLC then-VP Terry Towns told investigators to stop interviewing players. Casino management didn’t want to scare away their customers.

Those customers frequently used the casino as a home base for exchanging cash for casino chips. People involved in the crimes would meet in or outside the casino to pass bags of cash or chips.

Beeksma began to notice transactions increasing in size from the $400K range to $800K. That began happening in 2010, and BCLC told casino managers to report such transactions as suspicious. They sometimes did so and cooperated with the BCLC and police but not always.

More Hearings Lead to Headlines

The media headlines after the late-October hearings ranged from “$800,000 and more in bags, luggage, backpacks” to “RCMP detachment head warned ‘the monster is growing.’”

Those words reflected the testimony of BCLC investigator and former Great Canadian Surveillance Manager Stone Lee and former Richmond RCMP Detachment Officer Ward Clapham.

The latter testified that a Great Canadian executive told him to ease up on the police surveillance of River Rock because it was bad for business. And the city and casino officials largely balked at Clapham’s efforts to launch a casino crime unit. Even the BC government and RCMP management rejected the idea in 2009.

Even so, Clapham warned his supervisor that “the monster is growing” as more organized crime organizations descended upon River Rock.

Lee testified about his awareness that the aforementioned Terry Towns ordered casino employees to stop questioning high rollers about their transactions. Towns also encouraged investigators to stay away from the high-stakes gambling area altogether so as not to intimidate the customers.

More Hearings Scheduled

This week, the schedule reflects several interviews:

  • October 28: Ward Clapham (again), former BCLC Investigations Manager and RCMP Officer Gord Friesen
  • October 29: Gord Friesen (again), former BCLC Director and RCMP Officer John Karlovcec
  • October 30: John Karlovcec (again), former BCLC Manager Bal Bamra

The first week of November will feature whistleblower Labine, more RCMP officers, BCLC employees, and others in charge of enforcing illegal gaming laws.

Ultimately, Cullen is supposed to present his final report to lawmakers and the public by May 2021. It is unclear if that date remains in place after coronavirus-related delays.

 

Jennifer Newell

Jennifer Newell

Jennifer Newell has been writing about poker and gambling since 2004. As the online gaming sectors have changed and grown, particularly in the United States and Canada, she has followed it all and written about it for websites like World Poker Tour and PokerScout. In her free time, she runs a small business, reads, cooks, and enjoys music.

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