According to a report commissioned by the provincial government, casinos in British Columbia were used to launder billions of dollars.
Former B.C. Supreme Court Justice Austin Cullen presented a 1,800-page report on money laundering from 2008 to 2018. The Commission of Inquiry into Money Laundering in British Columbia heard testimony from 199 witnesses over the course of 133 days of proceedings.
“This inquiry explored the myriad ways in which the greedy and the devious seek to make their crime-stained money appear legitimate,” the report said.
“In 2014 alone, British Columbia casinos accepted nearly $1.2 billion in cash
transactions of $10,000 or more, including 1,881 individual cash buy-ins of $100,000 or
more – an average of more than fve per day”
Cullen’s report does not specify how much money was laundered in British Columbia, although it is estimated to be in the billions per year.
“Sophisticated professional money launderers operating in British Columbia are laundering staggering amounts of illicit funds,” the report said.
“For too long money laundering has been kept on the sidelines. Too often it has been largely ignored. It’s time for that to change,” Cullen said, speaking at a news conference after the release of the report.
Unmarked luxury vehicles routinely delivered cash to casino guests at or near casinos late at night or early in the morning, according to the report.
“It should have been apparent to anyone with an awareness of the size and character of these transactions that Lower Mainland casinos were accepting vast quantities of proceeds of crime during this time period,” Cullen said.
Former cabinet minister Rich Coleman got assurances from BC Lottery that the Crown corporation had a strong and effective anti-money laundering policy as early as 2010, despite concerns from the Gambling Policy and Enforcement Branch.
“Coleman responded to these mixed messages by arranging for an independent review of anti-money laundering measures in the gaming industry, but he did not take action to stem the flow of the suspicious cash transactions that he had been warned about,” the report found.
Despite numerous warnings from all levels of law enforcement, Cullen said, no substantial action to address the issue was made until 2015.
“BCLC resisted these calls for action and continued to allow these transactions, almost without exception,” the report said.
Corporate security and compliance managers of the lottery corporations , Cullen wrote: “They stood by and permitted B.C. casinos to accept vast sums of illicit cash. BCLC’s approach reflected a completely unacceptable and unreasonable risk tolerance.”
Cullen also said former premier Christy Clark could have done more to tackle the problem.
“Clark appropriately delegated oversight of the gaming industry to a succession of experienced ministers. In 2015, however, the premier learned that casinos conducted and managed by a Crown corporation and regulated by government were reporting transactions involving enormous quantities of cash as suspicious,” he said in the report.
“Despite receiving this information, Ms. Clark failed to determine whether these funds were being accepted by the casinos (and in turn contributing to the revenue of the province) and failed to ensure such funds were not accepted.”
“Despite the failure of these elected officials to take steps sufficient to resolve the
extensive money laundering occurring in the industry for which they were responsible,
there is no basis to conclude that any engaged in any form of corruption related to the
gaming industry or the Commission’s mandate more generally.” the report said
“There is no evidence that any of these individuals knowingly encouraged, facilitated, or
permitted money laundering to occur in order to obtain personal benefit or advantage,
be it financial, political, or otherwise”
Criminals laundered money by buying properties in British Columbia, according to Cullen, but he doesn’t believe it had a substantial impact on the total price of real estate.
“There are strong reasons to think that fundamental factors such as supply and demand, population increase, and interest rates are far more important drivers of price,” the report said. “Money laundering should be addressed, to be sure, but steps taken to counteract money laundering should not be viewed as a solution for housing unaffordability.”
Cullen’s report included 101 recommendations, including appointing a special anti-money laundering commissioner, lowering the threshold for demanding proof of funds for cash gambling transactions from $10,000 to $3,000, and requiring reporting for luxury goods transactions of $10,000 or more.
He also suggested that civil forfeiture be used more frequently, that money lenders, lawyers, accountants, and mortgage brokers be subjected to harsher rules, and that police officers be given more money laundering training.