BC Casino Awash in Dirty Money, Illegal Transactions, Inquiry Hears

BC Casino Awash in Dirty Money, Illegal Transactions, Inquiry Hears
River Rock Casino Resort in Richmond, B.C., in a file photo. (Arnold C/Public domain)
Lee Harding

After being put on hold due to the provincial election, the inquiry into money laundering in British Columbia resumed on Oct. 26. Witnesses have testified about high rollers with large sacks of cash containing up to $300,000, and the influx of organized crime to the Richmond area beginning in 2004.

Muriel Labine, a former Great Canadian Gaming (GCG) employee who worked at the River Rock Casino in Richmond from 1992 to 2000, testified on Nov. 3 that in 1997, the B.C. government raised betting limits from $25 to $500 per hand and introduced baccarat. Labine said large cash transactions became more frequent, causing her and fellow employees to warn, “’This is loan sharking, this is money laundering.’ But not once did I see steps to stop this.”

Labine once complained to her boss about a gambler who harassed a table-game dealer and ignored non-smoking rules. “My floor manager said, ‘I don’t want you talking to this man. He is dangerous. Stay away from him,'” Labine recalled. “And I’m thinking, are the gangs running the place? Or is the casino running it?”

A 2018 provincial report completed by former RCMP executive Peter German concluded that B.C. casinos were unwitting victims of money laundering.

“I had such high hopes for the German report, and the very first line gave casinos a whitewash,” Labine said.

Money Laundering ‘Out of Control’

Rob Barber, a Gaming Policy and Enforcement Branch (GPEB) investigator from 2010 to 2015, also testified on Nov. 3. He said he witnessed suspicious transactions at River Rock, but was frustrated that neither the B.C. Lottery Corporation (BCLC) nor the regulator GPEB did anything about it.

Barber said he confronted Doug Scott, an associate deputy minister at the time. “I told him that money laundering was out of control and something needs to be done about it. I was confident that he heard me. He looked at me and stepped around me, and left.”

Barber also met with Cheryl Wenezenki Yolland, another senior B.C. government official responsible for gaming, over his suspicions of drug-money laundering. Yolland seemed to agree but said that BCLC executive Brad Desmarais had said the cash was from “underground banking.” Barber attempted to meet with Desmarais over the matter, but Desmarais did not respond.

On Nov. 2, Ken Ackles, formerly with GPEB, said that in 2013 he and other staff saw large cash transactions every day at River Rock, as high rollers arrived with oddly assorted banknotes carried in large sacks totalling $200,000 to $300,000.

Ackles told GPEB executive director Larry Vander Graaf, who then told senior B.C. government officials. Vander Graaf and his assistant, Joe Schalk, complained of what they believed to be massive money laundering, but they were terminated late in 2014.

Ackles then produced a spreadsheet showing $20 million in suspicious cash transactions at River Rock in July 2015 alone, including $14.8 million in $20 bills. He sent the report to Len Meilleur, the enforcement branch’s then-executive director.

“He conveyed to me he was shocked,” Ackles said. “He thought I was joking.” The report led to establishment of a special joint team against illegal gaming in 2016. However, Ackles said no convictions for money-laundering have resulted.

‘The Monster Is Growing’

Last week the commission heard testimony from Ward Clapham who headed the RCMP detachment in Richmond when River Rock opened in 2004. As organized crime moved into the area, he warned his superior “the monster is growing.”

Limited resources minimized police foot patrols in the casino, yet a GCG executive called Clapham to request even fewer. Clapham also found resistance from the City of Richmond when he wanted to start a “casino crime” unit funded by casino earnings.

A confidential 2009 RCMP report acquired by Global News showed that a businessman “connected to Asian organized crime” was allowed to buy part of a BCLC casino and was later hired to work in one. The report argued that the RCMP’s anti-illegal gaming unit should expand its scope to include drug money in legal casinos. Instead, the B.C. government defunded and disbanded the unit altogether just three months later.

Steve Beeksma, who did surveillance for BCLC at River Rock, testified that in May of 2010, one high roller bought casino chips with $460,000 in $20 bills. He said drug dealers and loan sharks often buy chips with $20 bills but get paid back with $100 bills in a process known as “refining.” He told management to report the incidents to FINTRAC, Canada’s anti-money laundering agency, but they refused.

According to Beeksma, fellow investigator Ross Alderson questioned a high roller at River Rock about buying $200,000 in chips using $20 bills. Alderson ordered managers to pay the gambler back in $20 bills and not $100 bills.

Reportedly, GCG executive Rod Baker complained to BCLC vice-president Terry Towns about the incident. Towns called Beeksma, Alderson, and fellow investigator Stone Lee to a meeting and told them, “You are not cops. Stop interviewing players. … Cut that s--t out.”

Beeksma said he confronted the general manager of GCG in 2012 over an incident that occurred in a casino washroom. Surveillance showed a woman receiving $50,000 in cash in the washroom from a known loan shark who was supposed to be banned. The woman then left the casino to dine with the general manager of GCG, who dropped her off again at the casino. Then the woman got another $50,000 in cash in the bathroom to buy casino chips.

Lee alleged that in 2017, “River Rock VIP manager” Lisa Gao facilitated a $200,000 cash buy-in of casino chips. Gao gave the VIP a velvet River Rock bag and the person left, with his chips, without even placing a bet.

Lee also said his manager John Karlovcec wanted him to “make up an occupation” for a high-stakes gambler on an official “large cash transaction” report that was to be filed to FINTRAC. Karlovcec denied this in his testimony.

Gord Friesen, formerly the BCLC’s manager of investigations, told the commission that a prolific Vancouver-area gambler, believed to be a coal miner and real estate developer, brought $1 million in $20 bills to gamble for three days at a New Westminster casino.

The hearings will continue through April 2021.