The head of the RCMP’s detachment in Richmond, B.C., warned his superior “the monster is growing” and that an influx of organized crime groups surrounding the city’s new River Rock Casino could take over B.C.’s gaming industry, the province’s inquiry into money laundering has heard.
Ward Clapham, the detachment’s chief officer when the River Rock opened in 2004, told the Cullen Commission on Tuesday that the size of the casino had been drawing crime groups from outside the region, and had been draining Richmond’s policing resources.
Clapham said he tried to send foot patrols to the casino to deter a rise in crime, but low resources meant those were infrequent. Even then, he testified, an unidentified Great Canadian Gaming executive still called him and asked that police visits be curtailed because they were bad for business.
Clapham said he wanted more funding to start a “casino crime” unit, but that the City of Richmond resisted. His request that casino revenue help fund such a unit was met “with friction” by the same municipal officials, he added, who had also started to review their policing contract with the RCMP.
Clapham said he supported the plan for a provincial unit against illegal gaming, as proposed by a former RCMP officer named Fred Pinnock.
The unit was meant to target organized crime operating inside River Rock and other Lottery Corp. casinos, but the idea was rejected in 2009 by B.C.’s government and RCMP management.
Commission counsel Patrick McGowan asked Clapham if Pinnock’s proposal would have helped combat loan sharking and money laundering in B.C.
“Yes,” Clapham said.
Meanwhile, commission lawyers probed for more detail about a 2012 meeting in which three B.C. Lottery Corp. investigators said that management ordered them to stop questioning high-stakes gamblers at the River Rock.
Stone Lee, a Lottery Corp. investigator at the River Rock, testified in the meeting that his boss Terry Towns had told him that Great Canadian Gaming executive Rod Baker had complained to Towns about casino investigators approaching high-limit gamblers.
The commission had already heard from one of Lee’s colleagues that Towns, then the Lottery Corp.’s vice-president, ordered his staff to stop questioning high-rollers about massive cash transactions and suspected money laundering.
Towns even “deterred” his investigators from entering River Rock’s private high-stakes “salon” because some felt that the presence of Lottery Corp. staff could intimidate “VIP” gamblers, according to Lee.
“It was addressed that our management had been advised by Great Canadian casino that River Rock investigators were banning high-limit players in the salon,” Lee said.
“And we were intervening in their operation.”
However, in cross-examination, Great Canadian’s lawyer, Mark Skwarok, challenged Lee’s account of the meeting with Towns.
Lee replied: “I’m just stating, that is what was stated at the meeting.”
Great Canadian Gaming has argued its reports allowed police to identify loan sharks and that it has done nothing wrong in relation to money laundering in casinos.
Lee also testified that he investigated an incident in 2015 outside New Westminster’s Starlight casino involving Paul King Jin, an alleged organized crime loan shark at the centre of RCMP investigations of money laundering in Lottery Corp. casinos.
The inquiry heard that Lee studied a surveillance tape in which Jin was seen meeting with two employees from Gateway, a casino-service provider in B.C.
According to Lee’s investigation report, the meeting regarded a proposed expansion of the high-stakes gaming room at Starlight casino. Jin and the two Gateway employees — who had both worked at casinos in Nevada — discussed investment in the Starlight casino “VIP” gaming room from a man that owned a number of hotels in China.
However, a lawyer for Gateway Casinos told Lee that the the real purpose of the meeting between Jin and the two Gateway employees was a proposed real estate development in a parking lot beside the Starlight.
Lee acknowledged that one of the Gateway employees said he did not recognize Jin or know of him prior to the 2015 meeting.
Lee also cited records from his investigative notebook that pointed to differences of opinion with a number of his Lottery Corp. managers.
He testified that in one case, he learned that one of his Lottery Corp. managers, John Karlovcec, wanted him to “make up an occupation” for a high-stakes gambler on an official “large cash transaction” report that was to be filed to Fintrac, Canada’s anti-money laundering agency.
Karlovcec was scheduled to testify later in the week, while Clapham’s testimony was set to resume on Wednesday.
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.
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.