Senior B.C. official walked off when asked about money laundering, investigator says

Click to play video: 'Senior B.C. official ‘stepped around me and left’ when asked about money laundering, inquiry hears'
Senior B.C. official ‘stepped around me and left’ when asked about money laundering, inquiry hears
Rob Barber, a former investigator with B.C's Gaming Policy and Enforcement Branch, testifies at the Cullen Commission on Tuesday about his questioning of an associate deputy minister, and the deputy minister's response – Nov 3, 2020

An investigator with B.C.’s gaming regulator has testified that when he approached and questioned a senior B.C. government official about massive suspected drug-money laundering in the province’s casinos, the official walked away without saying a word.

Rob Barber, a former Gaming Policy and Enforcement Branch investigator, told the province’s inquiry into money laundering on Tuesday about his encounter with Doug Scott, an associate deputy minister in government at the time, while Barber was probing activity at Richmond’s River Rock Casino.

Click to play video: 'Cullen Commission hears dramatic testimony from casino insiders'
Cullen Commission hears dramatic testimony from casino insiders

Barber told the Cullen Commission that he’d been an investigator there from 2010 to 2015, and from his previous experience with the Vancouver Police Department, he immediately suspected that large transactions to launder drug money were occurring in the casino.

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He said the transactions ramped up in frequency and financial value starting in 2010, and that he became frustrated that neither the B.C. Lottery Corporation nor the regulator’s management were doing anything to stop them.

So when Scott attended a meeting with the regulator around 2011, Barber said he decided to question him as a senior official responsible for gaming. He told the inquiry that he believed Scott knew about the scale of suspected money laundering at the River Rock, and that he believed Scott should take some responsibility.

“I thought his liability was considerable,” Barber testified.

“I told him that money laundering was out of control and something needs to be done about it. I was confident that he heard me. He looked at me and stepped around me, and left.”

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Virtually no controls over money laundering in B.C. casinos, commission told

Barber also testified about several meetings with another senior official responsible for gaming, Cheryl Wenezenki Yolland.

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He said a branch manager complained at a meeting in late 2015 or early 2016 that B.C. Lottery Corp. managers did not believe they were regulated by the branch, and therefore the regulator couldn’t do anything about “dirty money.”

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“Her response was, ‘You sort it out,” Barber said.

He told inquiry lawyers that her response led him to conclude that the branch had no support from B.C.’s government to block suspected money laundering in casinos.

He also testified that he believed front-line Lottery Corp. investigators were diligently reporting on loan sharking and money laundering, but that he had “less faith in the people higher up.”

Barber spoke about another discussion with Wenezenki Yolland in which he explained his view that drug money was being laundered in large volumes in Lottery Corp. casinos.

He said he understood that Wenezenki Yolland accepted his view, but told him Lottery Corp. executive Brad Desmarais had said the large volumes of cash flowing into casinos were due to “underground banking.”

Barber said he tried to meet with Desmarais to discuss the matter, but that Desmarais never responded.

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In the afternoon, the inquiry heard from Muriel Labine, a former employee of Great Canadian Gaming who worked at the Richmond casino from 1992 to 2000.

Labine testified that she witnessed a sudden arrival of loan-sharking activity and a flood of suspicious cash at the casino in 1997.

That summer, she said, B.C.’s government raised betting limits from $25 per hand to $500 per hand and introduced baccarat.

Casino staff recognized almost immediately that large cash transactions were becoming more frequent, she added, and that cash for bets was mostly being supplied by young men who she believed were connected to gangs.

“We were told this story from management — that it’s just friends loaning money to friends,” Labine said. “You say, ‘This is loan sharking, this is money laundering.’ But not once did I see steps to stop this.”

She said she believed that managers actually accommodated the loan sharks and gangs.

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She recalled an incident where management allegedly gave a wide berth to a man she understood to be a gang kingpin.

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Labine said she complained to her boss that the gambler was harassing a table-game dealer and ignoring the casino’s non-smoking rules.

“My floor manager said, ‘I don’t want you talking to this man. He is dangerous. Stay away from him,'” Labine recalled. “And I’m thinking, ‘Are the gangs running the place? Or is the casino running it?'”

Labine said she kept a journal about her experiences at the casino, including her observations of suspected gang activity and drug-money laundering.

She kept it to herself until a 2018 report, commissioned by B.C.’s government and completed by former RCMP executive Peter German, concluded that B.C. casinos were unwitting victims of money laundering.

“I had such high hopes for the German report, and the very first line gave casinos a whitewash,” Labine said. “There is a culture in the casinos — we have been taking this money since 1997.”

Her disappointment in German’s conclusion is what caused her to bring her journal to Global News, she said. Global News published her story in May 2019.

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In cross-examination by a lawyer for Great Canadian Gaming, Labine acknowledged that her experience at the Richmond casino occurred about 20 years ago.

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The company’s lawyers have said their client has done nothing wrong in relation to casino money laundering. No court has ever ruled that its casinos accepted proceeds of crime.

Testimony is scheduled to continue this week.

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