Investigators Question BCLC Officials About Possible Money Laundering at British Columbia Casinos

  • British Columbia casinos routinely accepted six-figure buy-ins in $20 bills
  • An inquiry is questioning BCLC officials as to why they rarely scrutinized these transactions
  • Officials said the customers were known to be rich and frequently lost money
  • Suggestions on limiting cash buy-ins usually went unheeded
Canadian money drying on a clothesline
Investigators recently questioned BCLC officials about why six-figure cash transactions were frequently permitted at their casinos, despite the appearance of possible money laundering. [Image: Shutterstock.com]

Breaking Bad-sized stacks of cash

The British Columbia Lottery Corporation (BCLC) has been the subject of a public inquiry into possible money laundering at its casinos. Wrapping up recently was the questioning of BCLC CEO Jim Lightbody and three former heads of security by Allison Latimer and Patrick McGowan, counsel for the Commission of Inquiry into Money Laundering in B.C. The primary topic at hand: why did BCLC casinos frequently accept cash-to-chip conversions from people bringing six-figures-worth of CAD$20 (US$15.70) bills wrapped in rubber bands?

duffel bag or grocery bag full of $20 bills”

Counsel opined that lugging a “duffel bag or grocery bag full of $20 bills” had to be much less convenient than just wiring the money to the casino or bringing a bank draft. That such a frequent practice was not heavily scrutinized was curious. Lightbody said that he believes cash was a Chinese cultural preference and that heavy gamblers wanted to hide their pastime from the Chinese government.

What authorities believe, however, is that the cash is drug money from China and Mexico, filtered through “underground” banks in Richmond for organized crime and then loaned to gamblers.

Six-figure cash buy-ins happened regularly from 2010 to 2017. Silver International, one of these underground banks, dealt with about CAD$200m (US$157m) in drug money per year.

Excuses abound

But still, despite how shady hundreds of thousands of dollars in cash brought by one person to a casino looked, the BCLC continued to come up with plenty of reasons to look the other way. According to Business in Vancouver, BCLC investigator Mike Hiller told the commission of a customer that bought in for CAD$460,000 (US$361,000) in twenties and was okayed by a River Rock surveillance manager because he was rich and was a regular.

Another person, supposedly a coal mine owner, bought in for CAD$994,000 in twenties (US$780,000). Terry Towns, head of compliance and security until late 2012, told McGowan that buying in for that much just meant that he could afford it.

Lightbody said that it was up to the police to determine if the cash was from illicit activity. Since the BCLC and casinos couldn’t prove that it was, they accepted the buy-ins. Towns also said they came up with all kinds of justifications for someone having that much cash, reasoning that they could simply work in cash-intensive business like adult entertainment.

Another explanation for the lack of concern was that the whales frequently lost and therefore could not have been laundering money. After all, you can’t launder money that doesn’t come back to you.

Towns added that the large buy-ins were reported to the Gaming Policy and Enforcement Branch (GPEB), but casinos did not file suspicious transaction reports for amounts under CAD$50,000 (US$39,252).

Half-hearted efforts

The GPEB tried to get BCLC casinos – and in this case, specifically River Rock – to take steps to prevent or at least keep track of potentially suspicious transactions, but the department’s efforts were met with little cooperation. GPEB investigations suggested that the casinos only allow $20 buy-ins up to CAD$10,000 (US$7,850), but Brad Desmarais, who replaced Towns in 2013, said casinos didn’t do it because they weren’t made to do so.

Robert Kroeker, who took over for Desmarais in 2015, said that River Rock did start tracking $20 bills and insisted that GPEB could have forced the casinos to cap cash buy-ins, but it never did. Kroeker resigned in 2019 after he was alleged to have instructed staff to “allow dirty money to flow into casinos.”

any concern about what the source of the $20 bills people were buying in with might be?”

Kroeker, Desmarais, and Lightbody all talked about a program called a player gaming fund account (PGF), a way for customers to transfer money from their bank to a separate gambling account, eliminating the need for cash. The accounts were not required and not many people used them, prompting McGowan to ask Lightbody if that told him “anything or cause you to have any concern about what the source of the $20 bills people were buying in with might be?”

Lightbody said that know-your-customer policies were used, but source-of-funds inquiries were used only when deemed necessary.

The commission will soon hear from GPEB executives, as well as possibly current Attorney General David Eby.