Cullen Commission Sheds Light on Money-Laundering Protocols

The Cullen Commission has continued its hearings into money laundering activities taking place in British Columbia, with particular emphasis on underdeveloped money-laundering protocols.

In one of the latest testimonies heard at the Cullen Commission of Enquiry, John Karlovec, a former British Columbia Lottery Corporation (BCLC) assistant manager of casino surveillance, shared his experiences within the local gambling industry and suspicious activities that he noticed.

According to Karlovec, the lax regulations in the market segment opened the doors for many individuals to underhandedly benefit from dealings within the industry.  The latest testimony has further placed the spotlight on the River Rock Casino and Resort in Richmond as a hotspot of fraudulent activities in the province.      

River Rock Casino in the Spotlight

Karlovec noted that, when he commenced his reporting back in 2012, the existing anti-money laundering activities in the province were in the process of development and were relatively ineffective.  However, even eight years after the opening of River Rock Casino, the policies left a lot to be desired.

Karlovec was able to provide in-depth analyses of the province’s money-laundering activities.  He also noted his frustration at his attempt to reign in cash laundering at the River Rock Casino in Richmond.  According to Karlovec, high rollers were regularly arriving at the casino with duffel bags full of cash ready to gamble these proceeds away.

Nonetheless, Karlovec said that, even though he had initial concerns, he did not believe that casino employees were actively assisting money-laundering operations.  Back in 2011, non-cash buy-ins took place rarely since there was a limited number of platforms.  Furthermore, both the British Columbia Lottery Corporation and the provincial government were, at the time, proactively investigating cashless gaming approaches.     

Lack of Transactional Reporting

According to the statistics possessed by the Great Canadian Gaming Corporation, the operator that oversees the River Rock Casino and Resort, casino’s profits over an eight-year period saw an unnatural trajectory.  Further evidence points out to casino employees not reporting back on suspicious cash transactions, especially during 2011. 

In a further revelation, Gord Friesen, a former British Columbia Lottery Corporation investigations manager, discussed the apparent lack of reporting on transactions amounting to less than CA$50,000.  An investigation by the Crown corporation revealed that some casino patrons were making repeated transactions of just under CA$50,000, using CA$20 bills.