Big Chinese Cash Bets Put Vancouver Casino in Laundering ProbeBy and
Report cites risk of money laundering, underground banking
Asian high rollers placed C$500,000 cash buy-ins at tables
A casino south of Vancouver favored by wealthy Asian gamblers is under scrutiny for potential money laundering as large amounts of cash flow through the Pacific Coast city’s thriving real estate and gaming industries.
The British Columbia government released on Friday a previously confidential July 2016 report that had investigated the River Rock Casino Resort after it accepted C$13.5 million ($11 million) in C$20 bills in just one month in July 2015, capturing the attention of B.C.’s Gaming Policy and Enforcement Branch.
"I received a series of briefings that caused me to believe that our province could do more to combat money laundering at B.C. casinos," B.C.’s new Attorney General David Eby, whose New Democratic Party-led government took office in July, told reporters. "I am making that report public today."
The report, conducted by an independent investigator, examined cash transactions and play records over a two-year period starting September 2013 at the luxury resort overlooking the Fraser River, about 12 kilometers (7.5 miles) south of downtown Vancouver. High-limit rooms were staffed by employees whose first language was either Cantonese or Mandarin. At times, patrons would drop single cash buy-ins of more than C$500,000 at the gaming tables without disclosing the source of funds, according to the report.
"Reasonable grounds to suspect money laundering activity through the use of unsourced funds has been confirmed," the report said. "While the patron may be bona fide, the unsourced cash being accepted by the casino may be associated with criminal activity."
Most of the cash flowing through the casino was from clients referred to among staff as "high roller Asian VIPs," many of them non-residents or business people with interests in Vancouver and China, the report said. Cash believed to be connected to illicit activity would be delivered to patrons via late-night drop-offs at the casino or just outside the property.
The revelations come amid growing concerns that Vancouver -- a city that’s home to multi-million dollar mansions, glittering casinos and one of the nation’s worst opiod crises -- has become a haven for hot money.
The number of suspicious transaction reports involving Vancouver real estate have spiked lately, Gerald Cossette, director of Canada’s anti-money laundering watchdog, the Financial Transactions and Reporters Analysis Centre known as Fintrac, told reporters in Montreal this week.
The watchdog has been working with local realtors to identify red flags, he said. "For instance, how do you justify a student who buys a C$5 million mansion?," Cossette said. Last year, when Eby was still an opposition lawmaker, he identified C$57.1 million worth of residences bought by students reporting no income in Vancouver’s upper-crust district of Point Grey.
The report on the casino also noted the likelihood that Chinese patrons were using funds facilitated by underground banks in order to evade currency controls at home. Gamblers would call a local contact for cash delivery that would later be repaid through cash holdings in China, the report said. Chinese citizens have an annual foreign-exchange quota of $50,000 and in the past year Chinese officials have imposed a series of measures to crack down on capital outflows and violations.
The casino "fostered a culture accepting of large bulk cash transactions," the report said. Such venues are mandated to file reports on cash transactions of more than C$10,000, but following up with suspicious transactions reports or banning high-risk patrons is more discretionary. River Rock reported 54,187 large cash transactions during the two-year period but only filed 1,194 suspicious transaction reports and 1,209 prohibition bans, according to the report.
Eby pledged Friday to appoint an independent expert to review money laundering in the province in coming weeks.