An anti-money laundering expert hired for B.C.’s “arms-length” probe into casino money laundering was previously hired to work for Great Canadian Gaming, the company at the centre of the probe, according to documents and sources.
Documents obtained by Global News and source interviews indicate that, Jerome Malysh — a former RCMP financial crimes investigator — was hired as a consultant to complete compliance audit work for Great Canadian by Robert Kroeker, the gaming company’s former director of corporate security and compliance.
Kroeker left Great Canadian Gaming in 2015, to become B.C. Lottery Corp.’s vice-president of corporate compliance.
After September 2017 Malysh was also hired by Peter German, a former RCMP executive, to complete work for German’s March 2018 report, Dirty Money: An Independent Review of Money Laundering in Lower Mainland Casinos.
The report, which was triggered by an audit of concerns at Great Canadian’s River Rock Casino in Richmond, said that B.C. casinos “unwittingly” became laundromats for organized crime.
Malysh was paid $45,254 by the B.C. government for his work on Dirty Money, and German earned $188,914.
In Dirty Money, German wrote “this review was conducted at arm’s length from all other parties. I sub‐contracted with Mr. Jerome Malysh, a forensic accountant and former police investigator, to assist me.”
German cited Malysh’s previous work for B.C.’s Gaming Enforcement Branch. But there is no known mention of Malysh’s previous work for a casino company.
Some critics have raised questions about Malysh’s participation in German’s report. The critics, including current Lottery Corp. staff, wonder if German’s report “minimized” the role of River Rock staff in the acceptance of bags of suspicious cash.
Malysh and Kroeker did not respond to repeated interview requests for this story. German also did not respond to requests.
Malysh’s professional website says that his company completes “statutory anti-money laundering compliance reviews for casinos,” and other financial entities.
Global News has been seeking responses from Kroeker for this story since August, when B.C. Lottery Corp. disclosed documents regarding anti-money laundering compliance at River Rock.
A September 2016 email from a Great Canadian Gaming executive to Kroeker, asks “who did you use to complete corp. compliance audit in the past?”
The Great Canadian executive Patrick Ennis, had taken over Kroeker’s position, when Kroeker joined B.C. Lottery Corp.
Kroeker answered, “internal audit and Jerome M.”
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Global News sources in the Lottery Corp. said it is “well known” that Kroeker hired Malysh to complete work for Great Canadian Gaming prior to 2016.
“As previously stated, BCLC cannot comment on consultants engaged by its Casino Service Providers,” a Lottery Corp. spokeswoman said, in response to repeated questions for this story. “You may wish to contact Great Canadian Gaming Corporation.”
Great Canadian also did not answer questions about Kroeker and Malysh.
“GCGC does not disclose such information; our agreements with vendors, suppliers and advisors are subject to and protected by confidentiality, and to disclose such information would put our company in breach of any such arrangement,” the company said in a statement.
The company’s initial response stated: “Great Canadian welcomes Dr. Peter German’s report and recommendations … German found that casino service providers, like Great Canadian, were operating in accordance with anti-money laundering policies, practices and statutes, and GCGC has not been the subject of any enforcement activity regarding our practices.”
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Malysh and German have also completed work for B.C.’s casino regulator, the Gaming Enforcement Branch, prior to work on Dirty Money.
In 2014 Malysh was paid $24,996 by the B.C. government for completing a report, Client Due Diligence in BC Casinos, which was “intended to inform the next steps in the Province’s anti-money laundering strategy,” a response from B.C.’s government says.
And prior to being hired in September 2017 to complete Dirty Money, German was paid $19,118 for consulting work, with B.C.’s Gaming Enforcement Branch.
Global News has previously reported, that in August 2015, as money laundering concerns and massive suspicious cash transactions in private VIP betting rooms ramped up at River Rock, Kroeker defended the casino’s security and compliance.
“Money laundering, however, does not happen at Great Canadian Gaming’s facilities, according to GCG vice-president of corporate security and compliance Robert Kroeker,” a news article citing Kroeker stated.
On Thursday, Kroeker announced he is stepping down from his role as chair for Justice Institute of BC’s (JIBC) Board of Governors.
The move came days after the watchdog group Integrity BC questioned if Kroeker was right for a leadership position at an institute offering law enforcement courses.
In a statement posted to the Justice Institute’s website, Kroeker said intrusive media attention at the school was distracting the institution from its mandate.
“While my term as a governor concludes shortly, I have taken the decision to step down from the board effective immediately to remove the possibility that students, staff and the work of JIBC may experience further disruption.”
However, Dermod Travis with Integrity BC said it’s Kroeker’s association with Great Canadian, that should be of concern.
“The fact that the Justice Institute removed his Great Canadian Gaming employment from his bio, prior to any of the media coverage in the past 10 days, demonstrates they understood the inappropriateness of that employment with the position that he had with the Justice Institute.”
Kroeker has not responded to questions regarding the criticism from Integrity BC, and on Friday Global News was not able to immediately reach Kroeker for comment.
Kroeker is still employed with the Lottery Corp.
sam.cooper@globalnews.ca