The B.C. Lottery Corporation took no action against a high roller who’d been caught taking a large cash delivery from a banned loan shark who was actively being investigated by the RCMP for money laundering, a provincial inquiry heard Wednesday.
Daryl Tottenham, an anti-money laundering investigator with the Lottery Corp., was asked by Cullen Commission lawyer Allison Latimer about a number of probes into various “VIP” gamblers whom they had connected to a large network of loan sharks revolving around an organized crime suspect named Paul King Jin.
In one example, Tottenham acknowledged that a VIP named Guo Tai Shi took $150,000 in cash from Jin at the Lottery Corp.’s Starlight Casino in New Westminster, and that that transaction extended the ban on loan sharking for Jin.
The RCMP’s Integrated Proceeds of Crime unit was actively probing Jin and his many casino cash deliveries at the time, Tottenham said, but the Lottery Corp. did not ban Shi. That particular RCMP investigation into Jin was abandoned, the inquiry heard.
And while Jin was eventually banned in 2012, his network continued to deliver massive amounts of cash to high-stakes gamblers, mostly at the River Rock Casino in Richmond, which was the “centre” of the Jin group’s activities, Tottenham said.
It wasn’t until late 2015, when another major RCMP investigation into money laundering, dubbed E-Pirate, was underway, that the Lottery Corp. started to ban VIPs, including Shi, who were connected to Jin’s continuing cash deliveries at the River Rock.
The inquiry heard new details on Wednesday of extensive investigations by the Lottery Corp. into Jin’s network, such as when its team discovered that another VIP gambler appeared to be Jin’s boss.
At first, investigators believed two competing cash-delivery networks were active in Vancouver-area casinos. Tottenham said he believed one was run by Jin and another by a man named Kwok Chung Tam.
But Tam — who has been identified as a “heavyweight” alleged boss in the China-based Big Circle Boy gang, according to court records obtained by Global News — was finally judged to be above Jin in hierarchy, according to Tottenham.
“I came to the absolute conclusion that he was in fact believed to be Paul Jin’s boss,” he said. “That was the statement I got from the RCMP.”
Tottenham was asked repeatedly why Jin’s network was allowed to continue to supply cash and casino chips to VIPs, including Shi, from 2012 until 2015, when the Lottery Corp. banned or restricted large cash buy-ins from VIPs they had connected to Jin in 2015.
Tottenham, who was read multiple emails from Lottery Corp. staff referring to ‘sensitivity’ around taking any action that would affect business for both the casino owners and Lottery Corp., acknowledged that VIPs were repeatedly allowed to “bend” federal anti-money laundering rules so as not to jeopardize the highly sought-after revenue they generated.
The Lottery Corp. preferred to let casino management approach the VIPs diplomatically and educate them about appropriate methods of transaction, Tottenham said.
One of the VIPs, a man named Jia Gao, was known to be the biggest gambler in B.C. in 2015.
After Lottery Corp. investigators became concerned about his massive and suspicious transactions, he continued to receive many cash and chip deliveries from the network tied to Jin at the River Rock and other casinos, the inquiry heard.
At the River Rock in 2014 and 2015, a number of Lottery Corp. investigation files related to Gao and other VIPs showed that Jin’s network was believed to have set up a “supply point” of cash and chips inside the casino’s hotel rooms, Tottenham said.
In one case in 2015, Gao lost about $500,000 in chips purchased with cash at the River Rock, and then received a large delivery of high-value chips, wrapped in cellophane, at the Richmond facility. This “unusual transaction” was delivered by an employee who worked at Vancouver’s Edgewater Casino and was also tied to Jin’s network, the inquiry heard.
Still no action was taken against Gao.
In another case, he walked into the River Rock with $200,000 in chips, Tottenham said. He didn’t play, but exchanged the chips for $200,000 in cash, and then deposited the cash in a bank and returned with a $200,000 bank draft, which he deposited into his personal River Rock gambling account.
Tottenham acknowledged that this style of transaction raised concerns of money laundering, but Gao still was not banned.
In yet another case, the Lottery Corp. emailed an investigator at the River Rock with the direction that Gao be allowed to gamble with casino chips for which the Lottery Corp. did not know the source.
Latimer asked Tottenham if this was an example of the Lottery Corp. allowing Gao to breach Canada’s anti-money laundering laws.
“Yes,” he said.
Latimer also asked Tottenham if he knew why Gao eventually stopped gambling in Lottery Corp. casinos.
He replied that Gao had been put on special cash buy-in restrictions in 2015 after E-Pirate was underway, but continued to gamble at a lower level until leaving B.C. sometime in 2016. Tottenham said he heard Gao had money concerns.
Latimer asked if he was aware that some of Gao’s associates in the Jin network had been arrested in connection to fentanyl-trafficking investigations. Tottenham said he had read reports, but didn’t have any direct knowledge of fentanyl trafficking tied to Gao’s associates.
He was scheduled to continue testimony Thursday.