Millions of dollars flowed through two B.C. casinos in the spring and summer of 2010 in what the RCMP believes may have been a sophisticated scheme to launder money from the drug trade, CBC News has learned.
In documents obtained from a Freedom of Information request, the casinos reported to the B.C. Lottery Corporation in late 2010 a multimillion-dollar spike in suspicious transactions, but police were not immediately informed.
In one instance in May, a man entered the Starlight Casino in New Westminster carrying chips worth $1.2 million and immediately had casino staff convert the chips to cash.
'We're suspicious that it's dirty money.' —RCMP Insp. Barry Baxter
And after stuffing the money into a suitcase, the man said he was about to catch a plane and was concerned about questions from airport security about such a large amount of currency.
He requested and was given a letter from the staff confirming the money was a casino payout, the documents said.
The casino characterized the large transaction as "unusual activity" in its report to the B.C. Lottery Corporation.
In another incident days later, a man entered the River Rock Casino in Richmond and bought gambling chips with $460,000 in $20 bills. The casino report on the incident noted that "none of [the man's] actions are suspicious."
$8 million in 90 days
Over the next three months, staff at both casinos reported a combined total of $8 million in 90 large cash transactions, an average of one a day.
Police became aware of the activities after the fact, said Insp. Barry Baxter, who is with the RCMP's Integrated Proceeds of Crime Section.
"We're suspicious that it's dirty money," Baxter told CBC News. "The common person would say this stinks, there's no doubt about it.
"The casino industry in general was targeted during that time period for what may well be some very sophisticated money-laundering activities by organized crime."
Authorities are concerned that criminals can try to confound investigators by hiding illegally gained cash in a complex set of financial transactions at establishments like casinos, which have a large cash flow.
The CEO of the Starlight Casino declined a request for an interview regarding the $1.2-million cash-for-chips transaction.
Howard Blank, a spokesman for the River Rock Casino, said the summer was unusually busy at that gambling site. "We had a lot of influx of tourism from Southeast Asia, from Mainland China," Blank said.
He also said it's not unusual for gamblers to walk into a casino with bags of $20 bills.
"A lot of that money is people who have businesses here, who are taking the money out of their business and they're coming in and they're gambling," he said.
That explanation does not account for the amounts involved in the string of unusually large transactions in 2010, according to former RCMP investigator Terry Betts.
"How many cash businesses can consistently … generate six figures of cash?" said Betts. "I challenge anybody to give me an example."
Casino reports filed to the Financial Transactions and Reports Analysis Centre of Canada, a federal money-laundering watchdog, show that while the dollar value of suspicious transactions at casinos in other provinces has stayed the same or gone down in the past year, they have tripled in B.C.