BC Money laundering report points to government, RCMP failures, but finds no corruption
VICTORIA — Money laundering in British Columbia reached "staggering" levels due to inadequate efforts by police, politicians and regulators to curtail the crime, but there was no evidence it involved official corruption, a long-awaited public inquiry report has concluded.
© Provided by The Canadian PressB.C. money laundering public inquiry report, recommendations to be released
The report released Wednesday by former B.C. Supreme Court justice Austin Cullen, who led the commission of inquiry into money laundering in the province, said billions in illicit funds linked to organized crime and the drug trade impacted the real estate, gaming and luxury vehicle sectors.
Cullen said the former B.C. Liberal government and gaming officials at the Crown-owned B.C. Lottery Corp., were aware of suspicious cash flowing into casinos around the time of the 2010 Vancouver Olympics but they did not exhibit the "will" to fully tackle the problem.
"The government took reasonable steps but not sufficient steps," he said at a news conference. "The steps weren't up to the task of abating money laundering in the casinos."
Former B.C. gaming ministers Rich Coleman, Mike de Jong, and Shirley Bond, and former premier Christy Clark each took some anti-money laundering actions, but with limited results, said the report.
All four testified at the public inquiry, saying their actions were based on the best information they had on fighting money laundering.
“There is no evidence that any of these individuals knowingly encouraged, facilitated or permitted money laundering to occur in order to obtain personal benefit or advantage, be it financial, political or otherwise,” says the report.
Attorney General David Eby said he wanted explanations from members of the former government about their response to laundering, saying "they failed."
"I'll say frankly, that as a politician, I wouldn't be satisfied with a sash awarded by the commissioner that says 'not corrupt.' I hold myself to a higher standard," Eby said.
De Jong told a news conference it was "gratifying" the report found no evidence of "corrupt practices, collusion, any deliberate attempt to facilitate money laundering in this province by anyone within the previous government."
Coleman said in a statement that the report's conclusions "prove that allegations that the BC Liberals were ignoring money laundering, or were corrupt, were politically motivated oversimplifications."
The inquiry heard testimony over 133 days from almost 200 witnesses, including politicians, government and gaming industry officials, law enforcement officers, academics and experts.
Cullen’s report makes 101 recommendations, calling on the B.C. government to establish an office of an independent commissioner to focus on anti-money laundering, amend the Mortgage Brokers Act and Real Estate Services Regulation, and force casinos to lower the threshold to $3,000 for requiring proof of a gambler’s source of funds.
The 1,805-page report also describes what became an indelible image associated with money laundering in B.C., of people arriving at Vancouver-area casinos with large bags of cash, usually in $20 bills.
“These vast quantities of cash were frequently delivered to casino patrons at or near casinos, very late at night or early in the morning, by unmarked luxury vehicles. It should have been apparent to anyone with an awareness of the size and character of these transactions that Lower Mainland casinos were accepting vast quantities of proceeds of crime during this time period.”
The report says in 2014, B.C. casinos accepted $1.2 billion in cash transactions of $10,000 or more.
Although it said it was not possible to put a precise figure on the amount laundered through the B.C. economy each year, the report said evidence pointed to it being in the billions.
"Sophisticated professional money launderers operating in B.C. are laundering staggering amounts of illicit funds," says the report citing evidence that one underground banking operation was laundering up to $220 million a year at casinos.
The report says the federal government’s anti-money laundering regime is not effective and B.C. should focus on strengthening its own anti-money-laundering initiatives.
Eby said he was sure his colleagues in Ottawa would be disappointed by failures of the federal money-laundering regime described in the report.
He called it an indictment of federal enforcement. "This is not receiving priority attention from the federal government," he said.
Cullen’s report is also highly critical of the RCMP, saying the Mounties’ “lack of attention” to money laundering allowed unchecked growth of the crime since 2012.
“There was no sustained effort to investigate money laundering activity in British Columbia. Between 2015 and 2020, there were only two other major money laundering investigations that progressed to the charge-approval stage. This level of attention by the RCMP to money laundering is not commensurate with the money laundering activity and risks in this province.”
The RCMP said in a statement it was reviewing the report, and it had participated fully in the inquiry.
"To be effective, the prevention, detection, and disruption of money laundering requires a collective effort," said Deputy Commissioner Dwayne McDonald, commanding officer of B.C. RCMP. "The RCMP, in collaboration with its partners, remains committed to continuing to combat money laundering and financial crime.”
Premier John Horgan appointed Cullen in May 2019 to lead the inquiry after several official reports concluded that billions of dollars linked to organized crime and the drug trade had affected B.C.'s gaming sector and the real estate and luxury vehicle markets.
The public inquiry’s mandate was to make findings of fact and recommendations, determine the growth and methods of money laundering and find out if regulatory agencies or individuals contributed to the problem.
Cullen said the aim of his report was to offer advice that is realistic, practical and effective.
"For too long money laundering has been kept on the sidelines,” he said. “Too often it has been largely ignored. It’s time for that to change.”
This report by The Canadian Press was first published June 15, 2022.
Dirk Meissner, The Canadian Press
Some highlight quotes from the B.C. money-laundering inquiry
VANCOUVER — The final report from the money laundering inquiry looking into cash from organized crime being filtered through British Columbia casinos, the real estate industry and elsewhere says RCMP, the federal anti-money laundering agency and the provincial government didn't do enough to stop the crime.
Here are some of the best quotes from the inquiry, the report and from Commissioner Austin Cullen:
"This Inquiry explored the myriad ways in which the greedy and the devious seek to make their crime-stained money appear legitimate," says the report from the Commission of the Inquiry into Money Laundering in B.C. released Wednesday.
"Sophisticated professional money launderers operating in British Columbia are laundering staggering amounts of illicit funds."
_
“The information was there to draw different conclusions about what was transpiring within the casinos, but, as I said in my report, I think there was a failure of will to deal with it,” Cullen told a news conference on Wednesday. “I don’t think that equates to deliberate or witting failure to deal with it, but I think it does represent a failure of will.”
_
“We’re getting large amounts of money coming into the casino in $10,000 bundles in elastic bands, that to me smells drug money,” Larry Vander Graaf, the former senior investigator with B.C.’s gambling regulator told the inquiry on Nov. 12, 2020.
Continuing his testimony the next day, he said: “They should have orchestrated something to prevent that money from coming in or at least say, ‘Where did you get the money?’”
_
Ross Alderson, the former director of the British Columbia Lottery Corporation’s anti-money laundering office, told the inquiry he was the "whistlerblower."
“Did I leak information to the media? Yes, I did. Would I do it again? Yes, I would,” Alderson told the inquiry on Sept. 9, 2021. “We wouldn’t be here today if I didn’t.”
"It wouldn't surprise me at all that when you've got that much cash floating around, some of it is going to be sourced inappropriately, some of it is going to be used inappropriately and so on, and you can attach whatever names you want to that," said former B.C. Lottery Corp. chairman Bud Smith, on Feb. 4, 2021, when asked about millions in cash buy-ins, mostly in $20 bills.
_
“The gap between the B.C. Lottery Corporation perspective and the Gaming Policy Enforcement Branch perspective was so significant that I had difficulty understanding which of the organizations I could turn to and rely on in terms of the best recommendations going forward,” Attorney General David Eby told the inquiry on April 26, 2021.
_
“The idea was never to try and get revenue at the expense of public safety or public confidence in our casino system. Stopping crime, stopping money laundering, was always a primary concern way over and above the revenue that came from (the B.C. Lottery Corp.)," former B.C. premier Christy Clark testified on April 20, 2021.
_
“As you look back, do you look back and say, 'Here's a problem that may have developed and I might have done things differently had I had different or better information at the time?'" Brock Martland, a lawyer for the commission, asked Rich Coleman, the gaming minister under the former Liberal government, on April 28, 2021.
“Hindsight's always 20-20,” said Coleman. “I didn't have better information at the time.”
_
“Viewed from the lens of what we now know, everyone could and should have responded more quickly to those large cash transactions,” said B.C. Lottery Corp. lawyer Bill Smart in his final summation at the inquiry on Oct. 15, 2021.
---
"We say if such a regime had existed during the period of inaction and wilful blindness, it is quite possible that many of the adverse effects of money laundering would have been mitigated," said lawyer Jitesh Mistry, who represents the B.C. General Workers Union, in final arguments to the inquiry on Oct. 18, 2021.
_
This report by The Canadian Press was first published June 15, 2022.
The Canadian Press
VANCOUVER — The final report from the money laundering inquiry looking into cash from organized crime being filtered through British Columbia casinos, the real estate industry and elsewhere says RCMP, the federal anti-money laundering agency and the provincial government didn't do enough to stop the crime.
Here are some of the best quotes from the inquiry, the report and from Commissioner Austin Cullen:
"This Inquiry explored the myriad ways in which the greedy and the devious seek to make their crime-stained money appear legitimate," says the report from the Commission of the Inquiry into Money Laundering in B.C. released Wednesday.
"Sophisticated professional money launderers operating in British Columbia are laundering staggering amounts of illicit funds."
_
“The information was there to draw different conclusions about what was transpiring within the casinos, but, as I said in my report, I think there was a failure of will to deal with it,” Cullen told a news conference on Wednesday. “I don’t think that equates to deliberate or witting failure to deal with it, but I think it does represent a failure of will.”
_
“We’re getting large amounts of money coming into the casino in $10,000 bundles in elastic bands, that to me smells drug money,” Larry Vander Graaf, the former senior investigator with B.C.’s gambling regulator told the inquiry on Nov. 12, 2020.
Continuing his testimony the next day, he said: “They should have orchestrated something to prevent that money from coming in or at least say, ‘Where did you get the money?’”
_
Ross Alderson, the former director of the British Columbia Lottery Corporation’s anti-money laundering office, told the inquiry he was the "whistlerblower."
“Did I leak information to the media? Yes, I did. Would I do it again? Yes, I would,” Alderson told the inquiry on Sept. 9, 2021. “We wouldn’t be here today if I didn’t.”
"It wouldn't surprise me at all that when you've got that much cash floating around, some of it is going to be sourced inappropriately, some of it is going to be used inappropriately and so on, and you can attach whatever names you want to that," said former B.C. Lottery Corp. chairman Bud Smith, on Feb. 4, 2021, when asked about millions in cash buy-ins, mostly in $20 bills.
_
“The gap between the B.C. Lottery Corporation perspective and the Gaming Policy Enforcement Branch perspective was so significant that I had difficulty understanding which of the organizations I could turn to and rely on in terms of the best recommendations going forward,” Attorney General David Eby told the inquiry on April 26, 2021.
_
“The idea was never to try and get revenue at the expense of public safety or public confidence in our casino system. Stopping crime, stopping money laundering, was always a primary concern way over and above the revenue that came from (the B.C. Lottery Corp.)," former B.C. premier Christy Clark testified on April 20, 2021.
_
“As you look back, do you look back and say, 'Here's a problem that may have developed and I might have done things differently had I had different or better information at the time?'" Brock Martland, a lawyer for the commission, asked Rich Coleman, the gaming minister under the former Liberal government, on April 28, 2021.
“Hindsight's always 20-20,” said Coleman. “I didn't have better information at the time.”
_
“Viewed from the lens of what we now know, everyone could and should have responded more quickly to those large cash transactions,” said B.C. Lottery Corp. lawyer Bill Smart in his final summation at the inquiry on Oct. 15, 2021.
---
"We say if such a regime had existed during the period of inaction and wilful blindness, it is quite possible that many of the adverse effects of money laundering would have been mitigated," said lawyer Jitesh Mistry, who represents the B.C. General Workers Union, in final arguments to the inquiry on Oct. 18, 2021.
_
This report by The Canadian Press was first published June 15, 2022.
The Canadian Press
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