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Lotto Corp. staff told not to intervene in suspicious cash transactions, B.C. inquiry hears

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Investigators at the B.C. Lottery Corporation were ordered not to question high rollers at a casino in Richmond, B.C., about massive cash transactions, B.C.’s Cullen Commission into money laundering heard Monday.

Steve Beeksma, a B.C. Lottery Corp. anti-money laundering employee and former casino surveillance staffer at Great Canadian Gaming Corporation’s River Rock Casino, told commission lawyers that he believes managers at the River Rock complained to the Crown corporation about “aggressive” questioning of high rollers. 

Beeksma said in 2012, he and Ross Alderson, another Lottery Corp. investigator at River Rock, were called into a meeting with their boss, Lottery Corp. vice-president Terry Towns.

Alderson had questioned a high roller for alleged suspicious gambling, Beeksma said, and directed River Rock managers to pay the gambler back with $100 bills rather than the $20 bills the person entered the casino with.

He said the player was believed to be doing a process known as “refining” currency, which is a red flag for money laundering.

“You are not cops. Stop interviewing players,” Towns told the investigators, according to Beeksma. “Cut that sh-t out.”

Beeksma said he believed casino management had complained to the Lottery Corp. that aggressive questioning of high rollers would lead to loss of patrons that bet lots of money in the Richmond casino.

And in the aftermath of the meeting with Towns, Beeksma said, front-line Lottery Corp. money-laundering investigators felt they could not intervene against suspicious transactions.

Beeksma said the front-line investigators noticed that massive cash transactions of anywhere from $460,000 to $800,000 and above started to become common after 2010 in Lottery Corp. casinos.

And a conflict between Lottery Corp. investigators and River Rock casino management in May 2010 triggered increased concerns.

A high-roller had bought casino chips with $460,000 in $20 bills, Beeksma said, with bricks of cash wrapped in elastic bands.

Lottery Corp. investigators suspected the transaction could be proceeds of crime, Beeksma said, but River Rock management felt they did not need to report the transaction as suspicious.

The Commission heard that Mike Hiller, a Lottery Corp. investigator, followed up by emailing a directive to the casino managers saying “in the future I’d expect this type of buy-in is reported as suspicious activity.”

The inquiry also heard that in earlier years at a Great Canadian Gaming Richmond casino, staff allowed known loan sharks to continue to operate.

“The approach was to know who they were and keep them in line,” Beeksma said. “If you put them out, they’d be replaced in short order.”

The hearings, which started this year, were delayed until after Saturday’s B.C. election.

Other witnesses expected this week include Ward Clapham, former superintendent of the Richmond RCMP detachment. 

The commission is tasked with probing dirty money in casinos and real estate and determining whether corruption has enabled money laundering to take root in British Columbia.

In testimony this summer, the inquiry heard that money laundering is a Canada-wide problem, but B.C. appears to have more high-level organized crime groups and professional money-laundering networks than any other province.

RCMP Chief Supt. Rob Gilchrist, director general of Criminal Intelligence Service Canada, told the inquiry that among 14 criminal groups assessed as high-level national threats, 10 are linked to B.C., and that four high-level threat groups in Canada that were assessed in 2019 as being linked to money laundering for international drug traffickers were also connected to B.C.

Gilchrist also said that B.C. and Ontario provide a base of operations for an elite network of professional money launderers identified by police in 2019 of washing “upwards of hundreds of millions” per year.

He said public scrutiny on B.C. casinos and new “source of funds” laws introduced in 2018 have caused methods of money laundering to evolve, and that criminals are now targeting casinos “in other Canadian provinces where similar regulations don’t exist.”

The inquiry also heard that B.C.’s port access and proximity to Mexico make it a natural gateway for illicit drugs to travel into other parts of Western Canada and that organizations assessed as high-level threats in B.C. engage in multiple criminal activities and have interprovincial and international connections.

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