A B.C. Lottery Corporation investigator was ordered by his bosses to stop investigating massive cash transactions at Richmond’s River Rock Casino, because casino managers had complained to the Crown corporation’s executives, and it was “all about the revenue,” the province’s money-laundering inquiry has heard.
Ross Alderson, the corporation’s former director of anti-money laundering, was examined Thursday at the Cullen Commission, which is mandated to determine whether corruption or inaction on the part of police and government enabled dirty money to take root in the province’s casino industry.
Alderson told the commission that when he started working as a casino investigator inside the River Rock in 2011, he was “quite taken aback” at the volume of cash flooding in through high rollers, who would typically “buy in” with $100,000 or more, carrying stacks of $20 bills wrapped in elastic bands and stuffed into shopping bags.
Alderson said he noted the cash was often delivered to high rollers from vehicles that pulled up to the casino, or that gamblers would make a cellphone call, then receive packages of cash. Sometimes, gamblers would buy in with up to $500,000 per transaction, he said.
He said he and his colleagues believed these cash buy-ins were proceeds of crime. And one fellow investigator, a former high-level RCMP organized crime investigator named Mike Hiller, complained directly to Lottery Corp. bosses that the high rollers were laundering money.
Hiller recognized many of the high rollers involved in the large cash transactions at the River Rock from his previous drug-trafficking investigations, the inquiry heard.
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But Alderson said when he intervened in one suspected money-laundering transaction, in which he believed a River Rock high roller was laundering $100,000 worth of $20 bills, he was rebuked by the casino’s general manager, who told him he had no authority to question gamblers or reject their cash transactions.
Alderson testified that his dispute with the manager was followed by a meeting involving his fellow investigators and their Lottery Corp. bosses, Terry Towns and Gord Friesen.
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According to Alderson, Towns, who was director of compliance, “categorically” ordered him and the other investigators not to question River Rock patrons about cash transactions.
“He referred to the file (in which Alderson intervened in a $100,000 transaction at River Rock) and told me I wasn’t a cop anymore, and we are not to investigate,” Alderson said.
“He said he’d received a phone call from the casino. And Mr. Friesen admitted the same, and (said the casino management) were upset with what had occurred.”
The inquiry previously heard from Alderson’s fellow investigator, Stone Lee, who was in the meeting with Towns, that investigators were informed it was Great Canadian Gaming president Rod Baker who had complained and advised Lottery Corp. management that investigators should not question the high rollers.
Alderson said he also talked to Friesen after the meeting, and that Friesen said, “It’s all about the revenue.”
“We left the meeting very disappointed and disillusioned,” Alderson said, adding that he recorded his recollection of the meeting in contemporaneous notes.
Lawyers for Great Canadian Gaming have previously questioned Alderson’s credibility, and argued the company took actions to stop suspicious cash. On Thursday, a Great Canadian lawyer told Alderson that in 2016, the River Rock imposed bans on cash seen to come from a prominent alleged loan shark named Paul King Jin and his associates.
Alderson’s former boss, Towns, also previously testified that the Lottery Corp. had no basis to believe that bags of cash flooding into the casino were proceeds of crime.
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Alderson was also questioned about a report of recommendations he forwarded to his bosses in 2015, after he was promoted to director of anti-money laundering.
The report outlined that Lottery Corp. investigations with a number of high rollers indicated that a transnational money-laundering scheme was occurring, and that players “readily admit to not knowing the source of their cash … and pay back in suspicious circumstances … with little or no interest.”
Alderson testified he was also aware that in 2014, Hiller had forwarded a report to Lottery Corp. brass explaining that a network of high rollers from Mainland China gambled with cash loans taken from well-known loan sharks connected to drug trafficking, and then repaid the funds in China for low fees.
The inquiry has heard that B.C.’s Gaming Policy and Enforcement Branch concluded that after 2010, suspicious cash transactions via Asian gangs, loan sharks and high rollers from Mainland China were growing exponentially in the province, and that in 2014, suspected drug-money laundering in B.C. casinos was forecast to reach about $200 million per year.
Alderson’s recommendations in 2015 — which were displayed during his testimony Thursday — warned “there are likely people in the regulated B.C. gaming industry that are involved in facilitating proceeds of crime for players.”
To address these serious concerns, he recommended casino service providers should require high rollers to verify that their cash buy-ins came from legitimate sources for all transactions of more than $20,000.
This was essentially the key change that B.C.’s government finally adopted to end its casino money-laundering scandal, but only after former RCMP executive Peter German made the recommendation in his 2018 report “Dirty Money.”
Alderson told the inquiry that he doesn’t know why his cash verification recommendation wasn’t acted on in 2015.
“It would have impacted on revenue, no doubt,” he said. “I believe there would have been huge pushback, if I (had attempted to enforce the recommendation.)”
His cross-examination is scheduled to continue Friday.
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