B.C. government waited 9 years to heed recommendations to reject drug cash in casinos, inquiry hears

Lawyers representing the federal and B.C. governments argued a stunning set of facts and assertions in closing arguments for the province’s money laundering inquiry on Friday.

From at least 2009, many high officials in British Columbia were repeatedly warned of a massive escalation of “bulk cash” flooding into BC Lottery Corporation casinos that “undoubtedly has its origins in the drug trade,” according to the RCMP.

At the same time, in relation to the explosion of casino money laundering, three of the most powerful transnational crime networks in the world — Mexican and Colombian cartels, Chinese Triads and Middle Eastern gangs — were taking over B.C.’s underground economy and causing “unprecedented gang violence.”

Italian organized crime and outlaw biker gangs were high-level players as well, as gun violence and opioid overdose deaths surged on Canada’s West Coast.

Vancouver had become “a hub for the importation of illegal and dangerous substances including fentanyl, cocaine, and methamphetamine,” according to the RCMP.

Meanwhile, over and over again, in memos, emails, face-to-face meetings and even hasty hallway conversations, concerned investigators from B.C.’s Gaming Policy and Enforcement Branch, RCMP and the BC Lottery Corp. urged B.C. officials to reject a torrent of $20 bills entering casinos in bags in commonplace transactions of hundreds of thousands, and coming from “middle men” and “loan sharks” and even a B.C. politician, into the hands of scores of high-limit baccarat bettors — the “vast majority … from Mainland China.”

The gamblers were paying back the bags of suspected drug cash they used to buy casino chips with electronic fund transfers in China and Canada, according to a 2011 RCMP report, meaning that the “loan sharks” were not only profiting from interest on their criminal loans, but also successfully washing criminal money in international banks.

But this sophisticated, professional money laundering scheme continued “unfettered,” according to the RCMP in 2011, before Mounties finally struck the Triads at the heart of the crime model in October 2015, with a series of raids and arrests in Richmond, B.C.

It was also in October 2015, in reaction to the RCMP investigation, that B.C.’s government finally ordered the BC Lottery Corp., through the power of a ministerial letter, to determine the source of every suspicious stack of cash entering casinos. But the corporation didn’t actually heed this mandate until 2018, when former RCMP executive Peter German yet again made the recommendation, in his Dirty Money report.