B.C. casino regulator received complaint alleging BCLC management pressured to ‘allow dirty money’

Click to play video: 'BC Lottery Corporation executive steps down amid money-laundering questions'
BC Lottery Corporation executive steps down amid money-laundering questions
WATCH: BC Lottery Corporation executive steps down amid money-laundering questions – Jul 9, 2019

B.C. Lottery Corp. vice-president of corporate compliance Robert Kroeker has stepped down, months after B.C.’s gambling regulator pledged to investigate allegations that Kroeker instructed his staff to “ease up” on anti-money-laundering measures and “allow dirty money to flow into casinos,” Global News has learned.

Last week, the Lottery Corp. posted a brief statement announcing Kroeker, its chief compliance officer, “has left BCLC” — but the statement did not provide any reasons for the departure.

Kroeker, who is a lawyer, was one of B.C. government’s top anti-money-laundering officials and held several important posts with significant oversight in the province’s economy.

Kroeker could not be reached for comment on this story, and BCLC chief executive Jim Lightbody also would not respond to questions for this story.

Story continues below advertisement

Kroeker’s departure comes ahead of B.C.’s public inquiry into money laundering, which is expected to start this fall. A number of whistleblower sources have informed Global News they plan to allege in testimony that the Lottery Corp. turned a blind eye to dirty money.

WATCH: Conservatives press gov’t on Liberal MP’s law firm with client tied to ‘transnational money laundering’ probe

Click to play video: 'Conservatives press gov’t on Liberal MP’s law firm with client tied to ‘transnational money laundering’ probe'
Conservatives press gov’t on Liberal MP’s law firm with client tied to ‘transnational money laundering’ probe

Documents obtained by Global News through freedom-of-information requests and from casino industry sources show that B.C.’s gaming policy enforcement branch (GPEB) received a complaint against Kroeker in early 2019.

“We will be investigating,” Sam MacLeod, assistant deputy minister responsible for B.C. gambling, confirmed in a February 2019 email that was disclosed in a Global News freedom-of-information request.

A copy of the complaint sent to GPEB on Feb. 20, 2019 alleges: “I have information that Robert Kroeker … instructed (his staff) to ease up on the BCLC cash conditions on players and slow down the process of targeting suspicious buy-ins.”

Story continues below advertisement

Referring to Kroeker’s alleged instructions for his subordinates to “ease up” anti-money-laundering measures against gamblers, the complaint says that “this suggests pressure was put on the BCLC management team to allow dirty money to flow into casinos.”

The office of B.C. Attorney General David Eby would not provide information on the investigation into the complaint or the departure of Kroeker from the Lottery Corp.

Breaking news from Canada and around the world sent to your email, as it happens.

“Questions regarding Mr. Kroeker’s departure would best be directed to BCLC,” Ryan Panton, a spokesman for the attorney general, said. “GPEB is unable to comment on whether there are ongoing or potential investigations for reasons of privacy.”

The complaint to GPEB indicates that Kroeker’s subordinate — Lottery Corp.’s former director of anti-money-laundering investigations, Ross Alderson — and two of Alderson’s staff were among those who Kroeker allegedly instructed to “ease up” on “cash conditions (and) suspicious buy-ins.”

Alderson declined an interview for this story. But he has informed Global News that he plans to testify in B.C.’s inquiry on money laundering if he is asked.

“I’m aware of the complaint and have agreed to co-operate if required,” Alderson stated in a written message.

WATCH: Liberal MP says he has no knowledge of ‘bare trust’ real estate deal facilitated for alleged ‘drug boss’

Click to play video: 'Liberal MP says he has no knowledge of ‘bare trust’ real estate deal facilitated for alleged ‘drug boss’'
Liberal MP says he has no knowledge of ‘bare trust’ real estate deal facilitated for alleged ‘drug boss’

Kroeker, who is the former director of B.C.’s anti-money-laundering civil forfeiture program and the author of a 2011 B.C. government study on casino money laundering, left the civil forfeiture office to serve as corporate compliance chief for Great Canadian Gaming, the operator of Richmond’s River Rock Casino, from 2012 to September 2015.

Story continues below advertisement

In the summer of 2015, the Lottery Corp. was rocked by allegations stemming from an RCMP investigation that indicated massive amounts of drug cash were being laundered by a drug cartel from China, mostly through the Richmond casino, according to B.C. government documents, by using VIP high rollers from China.

Great Canadian Gaming has said to Global News that “at all times, we govern ourselves to meet or exceed those obligations, rules and standards” and that the company complies with all regulatory requirements set by provincial and federal agencies.

Lottery Corp. documents obtained by Global News and dated September 2015 say that a network of Chinese business tycoons who are high-stakes baccarat gamblers was shown to be buying casino chips in the Richmond casino’s private VIP rooms by using suspicious cash provided from a Chinese organized crime suspect named Paul King Jin.

Jin has not been charged, and Global News has not been able to reach him for comment.

The Lottery Corp.’s anti-money-laundering team responded to the RCMP investigations into Jin and the VIP gamblers by putting “unsourced cash” conditions on some of the Chinese high rollers, an anti-money-laundering report filed by Alderson in September 2015 shows.

Alderson’s report said Jin and these VIPs appeared to be involved in “transnational money laundering.” Due to Alderson’s recommendations, the effect was that these high rollers could no longer provide stacks of cash at casino cages without documents proving the cash came from legitimate sources, such as banks.

Story continues below advertisement

The February 2019 complaint against Kroeker points to a meeting at BCLC’s headquarters that involved Kroeker and Alderson, but the complaint does not state when the alleged meeting took place.

A casino industry source with knowledge of the alleged meeting suggested it likely occurred shortly before the Lunar New Year in 2017, which is a time period when high-rolling baccarat players from China typically travel to B.C. casinos and make massive cash buy-ins, according to Lottery Corp. documents reviewed by Global News.

“The persons involved (in the meeting) should be able to provide further detail if handled with the utmost confidentiality,” says a copy of the complaint that names a number of employees. “Please treat seriously.”

Kroeker left his job at the Richmond casino to join BCLC as the RCMP’s casino money-laundering investigations continued.

But before Kroeker joined the Lottery Corp. to lead its anti-money-laundering programs in September 2015, he was quoted in an August 2015 news article that pointed to criticism about B.C.’s government raising bet limits to accommodate massive $100,000-per-hand bets from Chinese high rollers.

Story continues below advertisement

“Money laundering, however, does not happen at Great Canadian Gaming’s facilities, according to GCG vice-president of corporate security and compliance Robert Kroeker,” the article stated.

When he was director of B.C.’s civil forfeiture program, Kroeker was asked by the B.C. Liberal government to look at money laundering in casinos after a series of media reports pointed to suspicious large cash transactions.

The Canadian Press reported that the NDP criticized Kroeker’s report in 2011 because it recommended a task force to study criminal activity in casinos, but “it barely touched on money laundering and appears still to welcome large cash transactions at casinos, the issue that prompted the original concerns.”

“There’s going to be nothing that actually says to somebody, ‘You can’t bring a suitcase full of $20s into the casino to cash it out,’” the Canadian Press quoted NDP gambling critic Shane Simpson as saying in August 2011.

Global News could not reach Kroeker at his government-listed number, and an attempt to reach Kroeker through his LinkedIn account for comment on allegations in the complaint against him was not successful.

Sponsored content