Exclusive: River Rock Casino warned employees may have shred large cash transaction records

Click to play video: 'New evidence of record-shredding at River Rock Casino'
New evidence of record-shredding at River Rock Casino
WATCH: New evidence of record-shredding at River Rock Casino – Aug 29, 2018

New documents and source interviews reveal allegations that River Rock Casino managers were warned employees were shredding paper records of large cash transactions, opening up the possibility that high-rollers were avoiding scrutiny from Canada’s anti-money laundering agency.

The alleged shredding is among a number of compliance issues connected to the casino’s VIP gambling business that B.C. Lottery Corp. management warned Great Canadian Gaming executives about at a meeting in April 2017, according to source interviews and documents obtained by Global News in a freedom of information request.

In an email, executives of Great Canadian — the operator of the Richmond casino that has been at the centre of a money laundering probe in B.C. — were asked to meet Lottery Corp. management to discuss “River Rock Casino large cash transaction compliance.”

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Lottery Corp. vice-president of corporate security Robert Kroeker informed Great Canadian management that “BCLC takes its compliance responsibilities very seriously; and in particular those obligations around anti-money laundering, terrorist financing, and personal privacy.”

“I wish to make sure there is no misunderstanding as to the nature and importance of the discussion scheduled for next week,” Kroeker’s email says.

The email has been partly redacted, and an attached two-page report on the compliance issues to be discussed at the meeting, has been redacted in order to protect police investigations.

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Money laundering report author Peter German’s connection to casino executive

According to an account of the meeting on April 21, 2017, Kroeker and Lottery Corp. anti-money laundering managers informed Great Canadian Gaming executives that BCLC investigators alleged River Rock casino employees at certain times in the day were shredding paper records of cash transactions that were large, but still below the $10,000 limit at which reports must be filed to Fintrac.

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This alleged practice of shredding big cash transaction records could have led to the possibility that documents meant to alert Fintrac to suspicious currency transactions might not have been filed — according to an account of the meeting.

For example, River Rock gamblers could have bought casino chips with $9,000 in cash at 4 a.m., and come back shortly after transaction records were shredded at 5 a.m., to make another $9,000 cash transaction.

According to Fintrac’s directives, all combined transactions from one gambler over a 24-hour period that total $10,000 or more, must be reported.

Therefore it’s possible that some large cash transactions — the example above would create a $18,000 cash transaction within a 24-hour period — were not captured for Fintrac reporting, according to an account of the meeting between Lottery Corp. executives and Great Canadian executives.

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In Canada’s system, Fintrac is supposed to monitor the financial reporting of casinos, banks, realtors and other financial businesses, and take corrective actions if reporting rules are broken.

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Other issues raised at the April 2017 compliance meeting included the perception that staff in River Rock’s private VIP room program were interacting inappropriately with VIP gamblers, and were perceived to be too close to the high-rollers, according to a source with knowledge of the meeting.

For example, a 2016 case in which a VIP gambler became intoxicated and allegedly sexually assaulted a female River Rock employee was raised, according to an account of the meeting.

As Global News has revealed, the alleged sex assault case has now led to an ongoing investigation. The investigation did not stem from the April 2017 compliance meeting, though.

In October 2017, B.C. Attorney General David Eby learned about the case through questions from a B.C. reporter, and ordered Lottery Corp. chief executive Jim Lightbody to investigate whether reported and unreported sex assault and harassment incidents were occurring in River Rock’s VIP gaming rooms.

Global News asked Eby to comment on the various allegations raised at the April 2017 meeting with Great Canadian executives regarding “large cash transaction compliance.”

“The allegations raised are troubling and I have asked ministry staff to look into it,” Eby stated.

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Great Canadian Gaming was asked by Global News to answer a number of questions about the compliance meeting, but executives were not provided for a requested interview.

“River Rock (and Great Canadian more generally) undertakes to be in compliance with all regulations, and more particularly, files Large Cash Transaction reports for all transactions $10,000 and over,” a prepared response says. “Great Canadian and River Rock have not been the subject of any enforcement activity regarding our practices or track record for filing required reports.”

The statement says that River Rock Casino retains electronic copies of all large cash transaction reports, and mentions that independent reviewer Peter German, in his report Dirty Money, found Great Canadian management took “proactive steps,” on compliance matters.

In regards to VIP room staff and cash transaction handling issues, Global News interviewed a former River Rock VIP room employee who handled large cash transactions. The former employee was familiar with some of the VIP staff at River Rock, including a VIP host who was de-registered by B.C.’s gaming regulator this year, for allegedly breaking Fintrac and Lottery Corp. anti-money laundering rules.

The former employee said the way it worked at River Rock’s private high-limit betting rooms, is that VIP hosts would take high-rollers to a “private cash cage,” where players would deposit bags of cash to a cashier. When the cash was counted, table dealers would receive a slip and give the VIP gambler the equivalent amount of chips.

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But VIPs were almost never questioned about large cash transactions, especially when they tipped staff $500 or more in a gambling session, the former employee claimed.

“The dealers and supervisors on the floor never cared or questioned a high-limit players’ source of income or where they get playing chips, as long as they tipped a big amount,” the employee alleged. “It was an unspoken rule to not bother these players, even though we’re trained to spot out suspicious activity, and report it.”

A big-tipping VIP was generally nick-named by staff as a “Santa Claus,” the employee said.

Global News confirmed the identity and employment background of the former employee, who did not want to be named.

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Great Canadian was asked to respond to the former employee’s claims.

“With respect to the comments about the relations between our staff and players, we have clear and strict policies for the handling of cash in our facilities,” a statement says. “Our protocols, structure and systems are designed to prevent inappropriate activity, and identify it should it occur.”

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