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FROM THE - JOURNALS of Monte Friesner ~ Financial Crime Consultant for WANTED SA ~

Friday January 07, 2011 >

WANTED SA has learned this morning that a Vancouver city Councilor and an Anti-Gambling Advocate stated allegations of money laundering at Lower Mainland casinos raise questions about plans for a huge downtown casino.

In documents filed with the B.C. Lottery Corporation in late 2010, the Starlight Casino in New Westminster and River Rock Casino in Richmond reported a multimillion-dollar increase in large cash transactions from May to early August. About $8 million changed hands in 90 transactions — an average of one a day over the three-month period.

The documents were obtained by CBC through a Freedom of Information request.

Police said they believe the facilities are being targeted by organized crime groups looking to launder drug money.

The reports are a cause for concern for a proposed casino project next to BC Place, said Coun. Geoff Meggs.

"It really does make you wonder whether B.C. Lottery Corp. is on top of things when it comes to making sure that the gaming industry in this province is not corrupted," Meggs said.

"That does raise questions in my mind about the ability of the casino operators and the B.C. Lottery Corp. to stay on top of where that money is coming from and who those people are."

City decision this year

Meggs said city staff is putting forward a report on the casino proposal this week, which will be followed by public input. If approved, construction on the $450-million project would begin later this year and would include the casino, with 150 gaming tables and 1,500 slot machines, as well as several hotels, restaurants and theatres.

The casino would be a new and much bigger version of the older Edgewater Casino on False Creek.

The new Edgewater Casino proposal includes two hotel towers, five restaurants and 100,000 square feet of gambling. (Paragon)The documents obtained by CBC News name the Edgewater Casino as another location where suspicious activity was noted by casino staff in their reports to the B.C. Lottery Corp.

In one incident in July 2010, a customer bought chips using $100,000 in $20- and $50-bills. He gambled for less than an hour, won a small amount of money and then cashed in all his chips and left the premises, the documents show.

In another incident in January 2010, $40,000 in chips were passed from one player to two others, breaking B.C. gambling regulations prohibiting the transfer of chips.

Chips as currency

The documents do not indicate whether or not staff intercepted the transfer.

Vancouver City Councillor Geoff Meggs says he is concerned about reports of money laundering at B.C. casinos. (CBC)An RCMP investigator and a Vancouver criminologist have told CBC News that authorities believe gangsters are using casinos to help obfuscate the trail of money from their illegal activities and are using casino chips as a form of currency in their criminal transactions.

Chips come in denominations as high as $5,000 and it is not illegal or against gambling regulations to take chips out of casinos. This is an old but practical method of money laundering, because casinos do not keep a record of chips won by patrons.

Anti-gambling advocate Bill Chu said he is not surprised casinos could be attracting criminals.

"We are not under any illusions. The only ones under illusions are the politicians."

How criminals can use casinos:

The RCMP reports that participants in organized crime make millions of dollars a year in the illegal drug trade in B.C. alone.

The money can become evidence in prosecutions so it must be hidden from authorities. Banks will report suspicious deposits, as will legal gambling establishments, but the casino reporting process is more complicated and does not always involve police.

Ed Rampone, former B.C. manager of casino investigations, says casinos are vulnerable to abuse by criminals. (CBC)Casinos can therefore be used to launder suspicious money or partially conceal it through a series of transactions.

According to Ed Rampone, who was B.C.'s manager of casino investigations until 2009, gangsters can use casinos using so-called loan sharks — people who make high-interest, short-term private loans and will resort to violence to collect debts.

Rampone says gangsters lend large amounts of cash, mostly in $20 bills, to loan sharks. The loan sharks then act as middlemen, lending to high-stakes gamblers.

The gamblers typically repay the loans in the form of casino chips.

The gangsters cash them in and the money then appears to come from casino winnings, not illegal activities.

The practice is becoming more prevalent, said Rampone, who added that it was "an uphill battle" getting casinos to co-operate with regulations.

WANTED SA kindly thanks Westlaw, Arutz Sheva, Associated Press, and all the Parties, Press, Journalists, Law Enforcement and Securities forces who have contributed to this article and their sincere opinions and statements.

WANTED SA states that the facts and opinions stated in this article are those of the author and not those of WANTED SA. We do not warrant the accuracy of any of the facts and opinions stated in this article nor do we endorse them or accept any form of responsibility for the articles.