Somewhere in the middle of Peter German’s report into money-laundering activities in British Columbia casinos, it occurred to me I was not reading a Hollywood script. And yet there were all the elements: international crime syndicates, murder, kidnapping, extortion and the spectacle of unscrupulous criminal agents getting bags of “dirty money” cleaned at the cash window of local gambling houses.
Mr. German, a former deputy commissioner of both the RCMP and Correctional Service Canada, released a report that is compelling and disturbing at the same time. The extent to which crime has infested the province, and the ease at which it did, is unsettling. The fact that the B.C. government of the day, aware that money laundering was becoming an epidemic and yet did virtually nothing about it, needs to be condemned in the loudest terms.
In fact, that is one the most disturbing aspects of the Dirty Money report: The alarms had been sounding inside the province’s gambling industry since the early 2000s and yet little was done about it. In fact, you could argue the former Liberal government in B.C. helped allow money laundering to flourish by disbanding, in 2009, a specialized enforcement team set up to monitor and investigate just that sort of criminal activity. Two months before the unit was closed, the government received a report that indicated there were 284 gambling incidents involving organized crime. It also described how there were two murders, a child abduction and extortion attempts linked to this area of criminal activity.
In another instance, Mr. German details how the head of gambling enforcement highlighted in a report the extent to which money laundering was occurring. He was fired by the government less than a year later, after the lottery corporation complained the individual was difficult to deal with.
And the report revealed more: The dirty cash coming in mostly from mainland China is also tied to B.C.’s deadly opioid crisis and the rise in real estate prices in Metro Vancouver. The province had become known as a gangster’s paradise, and now we know why – it was easy. Even those who suspected people of having untoward motives turned a blind eye to them.
And that is one of the most frustrating aspects of this investigation by Mr. German: It is a fact-finding mission, not a fault-finding one. That’s a shame, because what becomes evident as you read the document is the systemic failure by people in senior positions of responsibility to do their jobs. That includes people inside the B.C. Lottery Corp., people inside government bodies charged with monitoring criminal activity, and those around the provincial cabinet table at the time. Many of these people still hold their same positions. They shouldn’t.
The report showed how efforts to probe the increasing number of suspicious transactions were stymied by constant infighting among the lottery corporation and the province’s Gaming Policy and Enforcement Branch. There was more finger-pointing and turf-fighting than investigating. The culture of distrust between many organizations involved in the oversight of the casino business was pervasive.
In one particularly disheartening section of the report, Mr. German unearths a 2012 memo from an investigator inside the province’s enforcement branch in which he is trying to alert those inside the lottery corporation about what is happening beneath their noses: “I again ask the question and give the answer: ‘Who has $200,000 in $20 bills wrapped in elastic bands in $10,000 bundles?’” And yet this individual had this money exchanged for chips at a casino’s cash window. But some in the lottery corporation weren’t convinced this was money laundering. They also didn’t believe it was their job to investigate it.
Responding to the report’s release, the B.C. Liberals had the audacity to accuse Attorney-General David Eby of “sensationalizing” its contents. Sensationalizing? If anything, members of the former government on whose watch this all happened should be thankful Mr. German was not more merciless about their role in all this.
Heads should roll as a result of what was uncovered in this report, but they won’t.
Mr. German makes 48 recommendations, many of which the NDP government has already adopted. His central one, that gambling and oversight of things such as money laundering be handed to a separate organization under the aegis of a Crown corporation, is a good one. It will be needed. This problem isn’t going away.
In fact, in one of the report’s most alarming sections, Mr. German discloses a conversation he had with senior executives of the Vancouver Police Department. During it, they told him that while money laundering in casinos was significant, it was a “drop in the bucket” compared to the money laundering going on elsewhere in the economy.
In other words, this story is far from over. Expect more of the same type of damning report to follow.