Criminals target B.C. casinos and other cash businesses, police say
B.C.'s organized criminals are using casinos and other cash-based businesses to hide their profits, according to a police expert.
Insp. Mike Ryan of the Organized Crime Agency of B.C. told CBC News criminals are constantly looking for ways to convert their dirty cash into what looks like legitimate earnings, or winnings.
The Organized Crime Agency of British Columbia is an independent police force established by the provincial government to disrupt and suppress organized crime in B.C.
Criminals launder money in order to avoid raising suspicion about the origins of substantial sums of money with no apparent legitimate source of income.
"Any quantities of cash generated from illegal activities has to be placed into the financial system somehow," said Ryan.
"For example, the marijuana-grow industry, there are literally millions to tens of millions of dollars generated as a result of that activity," he said.
Criminals target a range of business that handle large amounts of cash in order to hide their illegal profits, including casinos, used-car dealers and banks, said Ryan.
"A casino is no different than any other cash-based business or industry … Being a venue where you can go in and exchange cash, there is a potential that casinos can be used in money laundering," said Ryan.
Reporters turn cash into cheques
An undercover investigation by the CBC revealed how easy it may be for criminals to launder money in B.C.'s casinos.
To test the process, CBC reporters openly fed thousands of dollars in $20 and $100 bills into slot machines at two large Metro Vancouver casinos.
After playing the slot machines only a short while, they took their credits to the cashier and were given cheques in return. In four instances, CBC employees were able to turn a total of about $24,000 of cash into cheques.
But one time, staff at the Gateway Casino in Burnaby refused to issue a cheque to the CBC journalist because there was no proof the credit voucher was for prize money, and it could have been money laundering. The journalist was given cash instead of a cheque.
Documents obtained by the CBC show that in February 2004 at Gateway, someone bought chips worth more than $40,000 in just 45 minutes. Six days later, someone bought $40,000 more in just 35 minutes.
The documents showed the customers left the casino without cashing out the chips.
Similarly, at the Great Canadian in Coquitlam, a customer bought more than $15,000 worth of casino chips in just three minutes. The documents showed that customer also left without turning in his chips.
The customer would then be able to return to cash out the chips in smaller amounts at different times without raising suspicion and receive a receipt saying the cash was prize money from the casino.
Hiding cash is problem for organized crime
"What money laundering is, is an inventory problem. Whether you're a low-level or a senior criminal or group, it really is an inventory problem in finding mechanisms to place what is really cash from an illegal activity into the financial systems," Ryan told CBC News.
"It's not simply a one-off event, but rather systemic systems that are moving phenomenal volumes of money," said Ryan.
Documents obtained by CBC News using a freedom of information request showed B.C. casino workers routinely observe dozens of suspicious transactions and large cash transactions each year, but only a fraction are reported to the federal agency that tracks money laundering.
The B.C. Lottery Corporation, which runs the casinos with a variety of private contractors, is supposed to report all possible money laundering to a federal agency, but it has one of the lowest reporting records in the country.
In 2006, Ontario casinos reported possible cases worth more than $15.5 million, while in B.C.'s casinos, only $60,000 in suspicious transactions were reported.
From 2004 to 2007, only one person was charged with money laundering in B.C.