The ability to launder millions of dollars through British Columbia's casinos has come to be known internationally as the "Vancouver Model," says the province's Attorney-General, who maintains regulations have been so lax that the province has become an unwitting ally of organized crime.
"Our international reputation is on the line," said David Eby, speaking at an anti-corruption law conference in Vancouver, where he promised to announce action later this week seeking to rein in money laundering.
Mr. Eby was blunt in laying the blame at the feet of the former BC Liberal government that held power for 16 years before the election last May, saying he was shocked by what he learned when he took office.
"I was advised that the particular style of money laundering in B.C. related to B.C. casinos is being called 'the Vancouver Model' in at least one international intelligence community," he said in his prepared remarks on Friday.
"The previous administration's lax attitude towards this issue means British Columbia has apparently developed its own, internationally recognized, model of money laundering," he added. This has a major and serious consequence … for the encouragement of whatever illegal activity might be generating these proceeds of crime."
The minority NDP government took power in July, and before that, Mr. Eby was an opposition critic who has repeatedly raised questions about money laundering.
For Mr. Eby's briefings as the incoming attorney-general, an RCMP member was on hand when the provincial Gaming Policy Enforcement Branch outlined to him allegations of serious, large-scale, international laundering of the proceeds of crime in British Columbia casinos.
In September, Mr. Eby appointed Peter German, a former deputy commissioner of the RCMP and Correctional Service Canada, as an independent expert to review money laundering in the gambling industry. Mr. German's final report is due next spring.
B.C.'s gambling industry brings in huge revenues to the province – an estimated $1.3-billion this year – and Mr. Eby suggested that lucrative source of cash may have dulled the former government's appetite to crack down despite many warnings.
"They evaluated the costs of cracking down on white-collar crime, on fraud, on money laundering, and determined that the benefits of inaction outweighed the costs of action."
The Liberals are in the process of choosing a new leader. Acting party leader Rich Coleman did not return calls on Sunday, and former finance minister Mike de Jong declined to comment, although his staff noted he had set up an investigation unit in 2016 to tackle the issue.
A confidential, 200-page report from Len Meilleur, the head of compliance at the Gaming Policy and Enforcement Branch, dated April 6, sheds some light on the concerns that are being raised inside of government.
The report says that suspicious transactions passing through B.C. casinos – in the form of cash and bank drafts – exceed $100-million a year. The report was requested by Postmedia and then posted on the government's public access site.
Suspicious cash transactions have declined since 2014, but remain at a rate that "is not experienced to this degree by any other jurisdiction in Canada," Mr. Meilleur noted.
Mr. Eby said he has already sent the British Columbia Lottery Corp., which oversees casinos, new instructions based on preliminary recommendations from Mr. German. Those recommendations will be made public on Tuesday.