Investigators at the B.C. Lottery Corporation were ordered not to question high rollers about massive cash transactions at a casino in Richmond, B.C., the province’s inquiry into money laundering heard Monday.
Steve Beeksma, a B.C. Lottery Corp. anti-money laundering employee and former casino surveillance staffer at Great Canadian Gaming Corporation’s River Rock Casino, told lawyers at the Cullen Commission that he believes managers at the River Rock complained to the Crown corporation about “aggressive” questioning of high rollers.
Beeksma said in 2012, he and Ross Alderson, another Lottery Corp. investigator at River Rock, were called into a meeting with their boss, Lottery Corp. vice-president Terry Towns.
Alderson had questioned a high roller for alleged suspicious gambling, Beeksma said, and directed River Rock managers to pay the gambler back with the $20 bills he used to buy chips, instead of $100 bills.
He said the player was believed to be doing a process known as “refining” currency, which is a red flag for money laundering. Typically in the process, gamblers can reduce the volume of small bills that come from drug transactions, by exchanging the small bills for larger denomination bills that are more easily banked.
“You are not cops. Stop interviewing players,” Towns told the investigators, according to Beeksma. “Cut that sh-t out.”
Beeksma said he believed casino management had complained to the Lottery Corp. that Alderson’s questioning would lead to fewer patrons who bet lots of money in the Richmond facility.
And in the aftermath of the meeting with Towns, Beeksma said, front-line Lottery Corp. money-laundering investigators felt they could not intervene against suspicious transactions.
Global News could not immediately reach Towns for comment, for this story.
Beeksma said the investigators noticed that cash transactions of anywhere from $460,000 to $800,000 and above started to become common after 2010 in Lottery Corp. casinos.
A conflict between Lottery Corp. investigators and River Rock casino management brought concerns to the forefront in May of that year.
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A high roller had bought casino chips with $460,000 in $20 bills, Beeksma said, using bricks of cash wrapped in elastic bands.
Lottery Corp. investigators suspected the transaction could involve proceeds of crime, Beeksma said, but River Rock management felt they did not need to report the dealing as suspicious.
So, according to Beeksma, a Lottery Corp. investigator named Mike Hiller followed up by emailing a directive to the casino managers saying, “In the future, I’d expect this type of buy-in is reported as suspicious activity.”
The inquiry also heard that Beeksma was concerned with a February 2012 incident, when Great Canadian Gaming’s then-general manager was allegedly surveilled in connection to a suspicious transaction.
A Lottery Corp. review showed the unidentified River Rock Casino manager went out for dinner with a female patron and gifts were exchanged. The woman had already been observed receiving $50,000 in cash in a casino washroom from a person previously banned as a loan shark, Commission counsel Patrick McGowan said.
She then left River Rock to dine with the casino manager, and he dropped her off back at the casino. And she entered a casino washroom and was provided another $50,000 in cash to buy casino chips.
McGowan asked Beeksma if he questioned the casino manager about the incident.
“It was out of the ordinary for me and I attended his (the general manager’s) office and asked him about it,” Beeksma testified. “The integration of an unusual transaction, and (the casino manager’s) vehicle being seen … he put himself in a pretty precarious position.”
Beeksma also testified that in the early 2000s, at another Great Canadian Gaming casino in Richmond, staff allowed known loan sharks to continue to operate.
“The approach was to know who they were and keep them in line,” he said. “If you put them out, they’d be replaced in short order.”
However, a lawyer for Great Canadian Gaming asked Beeksma if casino management did a good job of reporting suspicious transactions, and Beeksma said often, they did.
And Beeksma agreed that Great Canadian’s reporting of suspicious transactions helped police identify casino loan sharks. The company says it was not involved in wrongdoing in relation to casino money laundering.
The hearings, which started this year, were delayed until after Saturday’s B.C. election.
Other witnesses expected this week include Ward Clapham, former superintendent of the Richmond RCMP detachment.
The commission is tasked with probing dirty money in casinos and real estate and determining whether corruption has enabled money laundering to take root in British Columbia.
In testimony this summer, the inquiry heard that money laundering is a Canada-wide problem, but B.C. appears to have more high-level organized crime groups and professional money-laundering networks than any other province.
RCMP Chief Supt. Rob Gilchrist, director general of Criminal Intelligence Service Canada, told the inquiry that among 14 criminal groups assessed as high-level national threats, 10 are linked to B.C., and that four high-level threat groups in Canada that were assessed in 2019 as being linked to money laundering for international drug traffickers were also connected to B.C.
Gilchrist also said that B.C. and Ontario provide a base of operations for an elite network of professional money launderers identified by police in 2019 of washing “upwards of hundreds of millions” per year.
He said public scrutiny on B.C. casinos and new “source of funds” laws introduced in 2018 have caused methods of money laundering to evolve, and that criminals are now targeting casinos “in other Canadian provinces where similar regulations don’t exist.”
The inquiry also heard that B.C.’s port access and proximity to Mexico make it a natural gateway for illicit drugs to travel into other parts of Western Canada and that organizations assessed as high-level threats in B.C. engage in multiple criminal activities and have interprovincial and international connections.
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