Ontario casino regulator probing whether B.C. casino staff were connected to money-laundering suspects

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WATCH: Ontario’s gambling regulator is continuing to look into whether employees of Richmond’s River Rock Casino were connected to Chinese VIP gamblers and alleged loan sharks. Global's Sam Cooper has more – Jan 17, 2019

While the RCMP’s massive E-Pirate money-laundering investigation in B.C. has collapsed, Ontario’s gambling regulator is continuing to look into whether employees of Richmond’s River Rock Casino were connected to Chinese VIP gamblers and alleged loan sharks targeted in RCMP anti-gang investigations related to E-Pirate.

As Global News has reported, Crown prosecutors stayed charges in November in E-Pirate, a case against an alleged Richmond underground bank estimated by international anti-money-laundering officials to be laundering over $1 billion per year, when prosecutors mistakenly exposed the identity of a police informant whose life was judged to be at risk if the case proceeded.

However, related RCMP investigations into the alleged Chinese organized crime suspects at the centre of E-Pirate, continue.

Exclusive: Documents allege complicity in money laundering in major investigation of River Rock Casino

And documents obtained by Global News through freedom of information show these suspects are of interest to Alcohol and Gaming Commission of Ontario (AGCO) investigators, who opened the investigation in 2017 after Great Canadian Gaming was awarded a number of lucrative contracts in Ontario, including a major gaming expansion at Toronto’s Woodbine casino.

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AGCO investigators wanted to understand whether River Rock casino employees allowed suspect gamblers to launder money with casino chip purchases.

The AGCO regulatory review “remains open,” spokesman Ray Kahnert said.

WATCH: Charges stayed in Canada’s biggest drug-money-laundering investigation

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Charges stayed in Canada’s biggest drug money laundering investigation – Nov 28, 2018

Scope of Ontario regulatory probe

The “initial scope” of the Ontario investigation into Great Canadian Gaming, according to a 2018 memo, focused on two factors: a “share sell-off” of Great Canadian Gaming stock, and reports in the Vancouver Sun about a suspicious $200,000 cash transaction that allegedly involved a “banned patron,” a Chinese VIP gambler, and a River Rock “VIP salon” host.

Great Canadian Gaming executives were not available for interviews.

In a prepared response for this story, the B.C.-based gambling company stated it strictly complies with rules from all regulators, and “we are not aware of any investigation into our gaming registrations in any jurisdiction, outside of the normal registration and audit processes.”

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“Great Canadian Gaming mandates strict compliance to prescriptive rules for the sale of shares by company insiders, and we advise that we are not aware of any inappropriate share trading activity in that regard,” the statement said.

The AGCO employed Ontario Provincial Police Det.-Const. Dan MacDonald for the regulatory probe and tasked him with investigating the River Rock VIP host transaction. He was also to liaise with “RCMP concerning the River Rock Casino [and] any other related investigation.”

“As you likely know, Great Canadian Gaming has bought a few casinos here in Ontario … now I am supposed to find out what is going on in B.C.,” MacDonald wrote to Kenneth Ackles of B.C.’s anti-gang and anti-illegal gaming unit. “I know there are massive restrictions on what you can advise me.”

WATCH: Global News reveals why “Project E-Pirate” failed

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Global News uncovers reason why “Project E-Pirate” failed – Jan 9, 2019

B.C. gaming investigation of VIP program and targets identified by RCMP

One of the concerning factors highlighted in the River Rock VIP case that is under investigation by Ontario regulators is large amounts of high-value Lottery Corp. chips leaving the casino, without being bet — often an indication of money laundering.

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Emails show MacDonald, the OPP detective, sought information from RCMP’s Joint Illegal Gaming Unit (JIGIT) and B.C. gaming enforcement special Const. Scott MacGregor, an intelligence expert with access to police files regarding the alleged organized crime networks that RCMP investigators believed were active at River Rock and illegal casinos in Richmond.

The JIGIT investigation was launched in May 2016 and focused on Chinese Triad suspects allegedly laundering drug and loan sharking proceeds through Metro Vancouver casinos, and running underground casinos in Richmond. Nine suspects were arrested and the case is now in the hands of Crown prosecutors. Court files on JIGIT investigation targets have been sealed, and it’s not known whether the nine suspects have been charged.

Emails between the B.C. special Const. MacGregor, and the Ontario Det.-Const. MacDonald, show that they communicated about the case. The details of what MacGregor and MacDonald discussed are not clear, due to redactions.

However, a B.C. gaming intelligence report obtained by Global News sheds light on how MacGregor viewed the River Rock VIP host case, and suspected connections with a network of players identified in the E-Pirate and JIGIT probes.

What the RCMP alleged in these investigations, is that loan sharks in Richmond with ties to China-based gangs, recruited ultra-wealthy Chinese gamblers from Macau, met them in parking lots near River Rock casino, and provided the high-rollers with hockey bags stuffed with cash from drug-trafficking and loan-sharking. The VIPs, including suspected gang bosses, bought chips with these cash “loans” that were later paid back to drug-trafficker bank accounts in China.

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READ MORE: Secret police study finds crime networks could have laundered over $1B through Vancouver homes in 2016

MacGregor’s 11-page gaming intelligence report is entirely redacted to protect police investigations, except for several paragraphs that explain MacGregor’s view that the River Rock VIP case was “highly suspect.”

“There was a large third-party buy-in this month where a brand new patron walked in with $200,000 in $100 bills and waited to receive chips. Once the chips were delivered the patron left the casino without any play,” MacGregor’s report states. “This incident is being investigated for regulatory infractions at the RRCR … This incident is highly suspect and the ongoing Gaming Policy Enforcement Branch investigation into this matter is the first step, in identifying the correlation of connections between service provider staff, local patrons, foreign patrons, and illicit activity.”

The case highlights concerns that unusually high numbers of $5,000 chips had flooded out of River Rock Casino since 2015, according to documents, and that JIGIT was investigating whether these chips that were connected to E-Pirate targets, were also used in Richmond’s illegal casinos.  And B.C. Civil Forfeiture case filings show that RCMP say they seized over $17,000 worth of River Rock casino chips from the alleged Richmond underground bank targeted in E-Pirate.

River Rock’s ultra-lucrative VIP gambler program — which relied on private high-limit betting rooms, large cash transactions, and cultivation of wealthy Chinese patrons — was developed and run by Great Canadian executive Walter Soo. Soo is reportedly no longer working at River Rock, but is in Toronto, working to set up Great Canadian’s new gaming programs at Woodbine Casino.

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“We don’t provide details specific to any of our employees, but members of our corporate team have responsibilities that pertain to all 28 Great Canadian Gaming properties located across North America,” a company spokeswoman said, in response to questions about Soo.

Soo has not responded to interview requests from Global News, and his former LinkedIn professional profile appears to have been removed from public view. There has been no allegation that Soo himself has been involved in any unlawful activities or transactions.

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B.C. Lottery Corp. probe of casino employees and illegal casinos

Documents obtained by Global News in a request for information about E-Pirate raids, shed further light on the E-Pirate probe, and how B.C. Lottery Corp. investigators looked at potential connections between River Rock VIPs, casino staff and alleged loan sharks — the same nexus of potential connections that AGCO investigators are seeking information on.

The documents show that in August 2015, a Lottery Corp. casino investigator learned of suspicions that registered casino dealers may have been paid up to $8,000 per week by illegal casino operators in Richmond to work “on the side.”

The information was related to advertisements for casino dealers on a Vancouver-area Chinese-language website.

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The investigator wrote, “no current dealers at RRCR have been named that I’m aware of … [but] wanted to forward the link and advise that current casino dealers may be working here on the side.”

READ MORE: Alleged partnership of Canadian casino company with gambling tycoon could trigger new investigation

The documents are redacted, but point to suspects and addresses that were later raided by the RCMP.

The redacted documents says investigators also learned of “stories of unnamed players talking openly in River Rock VIP Salon about what a nice job ‘they’ did decorating their ‘high limit room.’ Apparently players are gambling amounts upwards of $500k.”

The intelligence suggested that B.C. Lottery Corp. had information in 2015, that some of River Rock’s highest rollers were running Richmond organized crime casinos on the side.

“Some good stuff here,” another Lottery Corp. investigator responded, in an email. “Somewhat confirms our other intel.”

The AGCO is aware of the “matters” revealed in documents obtained by Global News but is not currently investigating whether River Rock staff were found to be working “on the side” in alleged organized crime underground casinos, an AGCO spokesman said Friday.

Ontario looks for answers from B.C. investigators

The AGCO emails make clear that Ontario Det. MacDonald sought information from the RCMP. But it is not clear if he got any information in return.

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In response to questions about whether RCMP is sharing information from E-Pirate and the related JIGIT investigation with the AGCO, Staff-Sgt. Tania Vaughan said, “We do not discuss ongoing police operations.”

Documents also show MacDonald was given access to some details from the B.C. gaming probe of River Rock casino staff, but there were limits.

A mostly redacted April 2018 message from B.C. investigator Richard Akin to MacDonald says: “I just want you to know that there is no issue at our end re: trust … [But] My police background tends to make me paranoid when it comes to these situations and any possible push back … I would rather have a high level summary as I believe it would address your outfit’s concerns and mine.”

“Ok man. You kind of scared me a bit,” MacDonald replied. “I will go with whatever you give me.”

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