Former British Columbia gaming minister Rich Coleman and senior RCMP officers caused a 'tsunami' of casino money laundering, said the province's former solicit-general, according to a. BC Liberal minister blocked money laundering probes, ex-Mountie says B.C. Lottery corp could have controlled flow of dirty money in casinos: ex-regulator Bruce Wallace, manager of strategic policy and reviews for the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), told the Cullen Commission his agency is not focused on.
A 'decade of dirty money'. That's what an explosive new report is calling British Columbia's years under BC Liberal rule.
According to Peter German's report, the BC Liberals allowed millions upon millions in dirty money from illegal activity to be laundered through BC casinos on their watch. This money powered the fentanyl epidemic and contributed to the housing affordability crisis — and it happened largely because regulators refused to act and chose to look the other way.
Not once. Not twice. But time and time and time again.
So what happened when — and who knew what? We've done our best to break it down for you, going all the way back to 2002.
2002: The BC Liberal government passes a new Gaming Control Act, creating a new regulator called the Gaming Policy and Enforcement Branch.
2004: The BC Liberal government and the RCMP create the Integrated Illegal Gaming Enforcement team (also known as IIGET) with a mandate to investigate crimes surrounding 'common gaming' houses, animal fighting, and bookmaking. Is the casino in livingston texas open. It falls under the purview of Solicitor General Rich Coleman.
December 2007: The Integrated Illegal Gaming Enforcement Team prepares a report on its future; warning that high-level illegal gambling targets would conduct their operations with 'impunity' if the unit were disbanded.
- A former British Columbia gaming official says concerns were raised as larger amounts of suspicious cash with possible links to money laundering began showing up at casinos while the province prepared to host the 2010 Winter Olympics.
- Government report has found widespread evidence of money laundering in which organized criminals, notably in the drug trade, use a web of underground banks, loan sharking and gamblers to.
November 2008: Reporter Sean Holman reveals that the BC Liberal party accepted more than $250,000 in donations from private bingo hall and community gaming centre interests between 2002 and 2007. This is despite an internal BC Liberal party bylaw banning donations from gaming.
Note: By the end of 2017 when corporate donations are banned, the BC Liberals accepted more than $500,000 in political donations from gaming companies.
January 2009: IIGET prepares a 'Threat Assessment' report warning that BC casinos are extremely vulnerable to money laundering. They ask for an expanded role including BC casinos.
April 2009: Then-Housing Minister Rich Coleman eliminates funding for IIGET, disbanding the unit. He suggests the unit was not cost-effective and had failed to produce a business plan. Journalist Sean Holman later publishes a leaked copy of IIGET's business plan.
October 2009: IIGET's former commander Fred Pinnock speaks to journalists, stating that his team should have been expanded, not shut down. He comments 'I'm not sure how motivated the provincial government was to have high-profile enforcement of illegal gaming in the province.'
January 2011: Inspector Barry Baxter from the RCMP's Integrated Proceeds of Crime Section speaks to media about suspicions of dirty money in BC casinos and 'sophisticated money-laundering activities by organized crime.'
He highlights a period of three months in 2010 where employees at 2 lower mainland casinos reported a combined total of $8 million in 90 large cash transactions, an average of one a day.
Rich Coleman criticizes Insp. Baxter, saying 'Yeah, I know what he said, and I don't agree with him, neither do all the superiors of his in the RCMP.'
August 2011: Following a request by Solicitor General Rich Coleman, the BC Office of Civil Forfeiture prepares a report on money laundering at BC casinos. The report recommends that BC Gaming update its approach to tackling money laundering.
November 2012: The head of the Gaming Policy and Enforcement Branch identifies 543 suspicious transactions, totalling $39.5M between 2010 and 2011. According to the German report, most occurred at Richmond's River Rock Casino.
March 2013: Over email, the investigator leading gaming enforcement warns that money laundering is taking place at BC casinos. He suggests that illegal sources are supplying loan sharks with dirty money, who are then supplying gamblers.
Less than a year later, Finance Minister Mike de Jong fires the investigator. No other action is taken.
July 2015: The money-laundering crisis reaches historic levels with one casino accepting $13.5 million in twenty-dollar bills in a single month.
Later that month, the BC Lottery Corp sends the ‘Section 86' report to the BC Gaming Enforcement Branch (an arm of the BC Ministry of Finance). It details the discovery of a massive underground banking network allowing organized crime to use illegal money transfer businesses in Richmond to lend cash to gamblers for chips at the River Rock Casino.
The 600 account holders in the underground banking network include known drug dealers in Mexico and Peru, and terrorist financiers in Iran.
July 2016: The BC Liberal government receives a report from accounting firm MNP LLP recommending changes to anti-money laundering practices.
They fail to implement the recommendations and withhold the report from the public.
May 2017: Rich Coleman accepts a $390 donation from Gateway Casinos to his personal re-election campaign. One year later in July 2018, he will tell CKNW's Lynda Steele that he never accepted donations from gaming.
September 28, 2017: BC NDP Attorney General David Eby hires Peter German to investigate money laundering at BC casinos.
October 4, 2017: The ‘Section 86' report is leaked to the Vancouver Sun. Mike de Jong refuses to comment.
October 19, 2017: Andrew Wilkinson cashes a cheque for $5,000 from Gateway Casinos for his leadership campaign. Other BC Liberal leadership contenders receive another $20,000.
June 27, 2018: Peter German releases his report, confirming the prevalence of money laundering in BC casinos. His report suggests that money laundering impacts both the fast-growing fentanyl crisis and affordability in BC's real estate market.
German highlights the BC Liberal decision to disband IIGET as making matters worse.
Former BC Liberal cabinet ministers go into hiding. Instead, Andrew Wilkinson puts forward new MLA Jas Johal. He fails to accept any responsibility and blames the RCMP.
The RCMP issues a statement correcting the record, saying 'At times, government is briefed on sensitive information concerning police investigations that cannot be released. However, it was the decision of government to disband [the] Integrated Illegal Gaming Enforcement Team (IIGET).'
June 28, 2018: Speaking to the CBC, BC Liberal leader Andrew Wilkinson refuses to accept responsibility, saying that asking politicians to do so is a 'sad exercise.'
July 3, 2018: Former BC Liberal Attorney General Suzanne Anton (2013-2017) is asked by a CBC reporter whether her government's response to money laundering took too long. She agrees, saying 'That's correct. And it was slow.'
July 5, 2018: Calling into the Lynda Steele show on CKNW, Rich Coleman finally speaks to the issue. He calls the suggestion that his government did little to staunch money laundering ‘a load of garbage'. Like Johal and Wilkinson, he blames the RCMP for disbanding IIGET.
When asked if he'd act sooner knowing what he does now, replies 'I think it's difficult to say you would do anything differently.'
July 10, 2018:In an explosive interview with Global BC, former IIGET commander Fred Pinnock lays into the BC Liberals for their complicity in allowing money laundering to flourish in BC casinos.
'Fault lies at the feet of the BC Liberals while they were in government..They all knew what was going on in those casinos and racetracks. Primarily casinos, in particular, the big ones. It was wild west in those large casinos where organized criminal activity was running amok. It was no secret to government. At all.' - Fred Pinnock
Fall 2018:A sprawling, three-part investigation by Global News estimates that fentanyl drug traffickers laundered between 1 and 6 billion in metro Vancouver's white-hot housing market, between 2012 and 2016.
'Fentanyl killed so many Canadians last year that it caused the average life expectancy in B.C. to drop for the first time in decades. But for crime kingpins, it has become a source of such astonishing wealth that it has disrupted the Vancouver-area real estate market.' - ‘Fentanyl: Making a Killing'
Meanwhile, Andrew Wilkinson and the BC Liberals refuse to waive cabinet confidentiality that would allow RCMP investigators access to records of high-level government discussions around what they knew about the money laundering at BC casinos, and when.
January 2019: A new freedom of information request from the CBC reveals that the estimated '$100 million' laundered through BC casinos is at least $700 million — and potentially as high as 1 billion in dirty money.
'The numbers would have exceeded $1 billion for sure in suspicious currency transactions. It was a staggering amount of money.' - Joe Schalk, former senior director of investigations with the Gaming Policy Enforcement Branch
Years later, the alarm keeps ringing — and the BC Liberals still won't say anything about it.
March 2019: In late March Global TV's investigative reporter Sam Cooper revealed a new twist in the money laundering saga — implicating the office of former BC Liberal Finance Minister Mike de Jong.
According to Cooper's research, officials from de Jong's office intervened to allow the BC Lottery Corporation to raise casino betting limits to $100,000 in early 2014 — against the recommendations of BC's gaming regulator.
'Since late 2010, the regulator — GPEB — had warned the Lottery Corp. (BCLC) to limit massive cash transactions involving Chinese VIPs at private baccarat tables, documents show. But instead, Lottery Corp. managers did the opposite. They repeatedly raised baccarat limits, from $5,000 per hand to $100,000. And they refused to implement the regulator's suggested 'remedy' of capping VIP buy-ins with $20 bills — the denomination associated most with drug trafficking — to under $10,000.' - Sam Cooper, Global TV
When questioned about his decision by Global TV, Mike de Jong said he didn't recall.
On May 15, 2019, the BC NDP government announced a public inquiry into money laundering led by BC Supreme Court Justice Austin Cullen. Here's what John Horgan had to say during the announcement:
'Criminal activity [from money laundering] has had a material impact on people: whether it be the rise of opioid addictions, the rise of opioid deaths as a result of overdoses, whether it was the extraordinary increase in housing costs, people were being affected by criminal activity in British Columbia.' - Premier John Horgan
In the last week of February 2020, the Cullen Inquiry opened public hearings into money laundering in BC. As the hearings opened, Andrew Wilkinson was still refusing to release cabinet-level documents detailing what he and the BC Liberals knew about money laundering, and when.
After 19 months of BC Liberal delay tactics, there's still so much we don't know — and what British Columbians deserve to know.
John Horgan and the BC NDP are committed to ending dirty money and holding people accountable. If you're with us, too, please add your name.
The British Columbia government has launched a public inquiry into money laundering that is required to make its final report a few months ahead of the next scheduled provincial election.
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'The timing of it is the timing of it,' said Premier John Horgan. 'We felt that the best way forward was to collect information and ensure there was accountability.'
Over the past two years the government has commissioned three independent reports on money laundering and its effects on the province's casinos, real estate sector, luxury car market and horse racing.
A report released last week estimated that $7.4 billion was laundered in B.C. last year, including about $5 billion that went into the housing market. That means money from illegal activities made up about two per cent of the provincial economy.
'That criminal activity has had a material impact on people, whether it be the rise of opioid addictions, the rise of opioid deaths as the result of overdoses, whether it was the extraordinary increase in housing costs, people were being affected by criminal activity in British Columbia,' Horgan said. 'I believe British Columbians want to know how this was allowed to happen in British Columbia.'
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Join us and grow independent media in CanadaCabinet appointed Austin F. Cullen, a B.C. Supreme Court justice, to head the inquiry. Tournoi poker saint amand les eaux. The terms of reference require him to make an interim report within 18 months and a final report by May 15, 2021. The next provincial election is scheduled for October that year.
'We have given him all the powers to compel testimony and gather evidence that his new office as commissioner allows under the Public Inquiry Act,' said Attorney General David Eby.
Some people refused to participate in the independent reviews conducted by Peter German and Maureen Maloney, Eby said. Cullen will have the power to seize records, obtain warrants and order testimony under oath.
Eby said he spoke with Bill Blair, the federal minister of border security and organized crime reduction, who has assured him that the federal government will fully cooperate with the inquiry. He noted federal agencies such as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, that's supposed to protect against money laundering failed to do so.
Horgan said he received the same assurance from Prime Minister Justin Trudeau that the federal government would cooperate. 'This is a national problem with an extraordinary focus here in British Columbia,' Horgan said.
'The inquiry will look at the broad scope of the problem, give us answers about who knew what and when,' Eby said.
The British Columbia government has launched a public inquiry into money laundering that is required to make its final report a few months ahead of the next scheduled provincial election.
Announcements, Events & more from Tyee and select partners- Win a Set of Masks from the Kindness Factory
Each mask is made with love in Victoria, BC. Enter to win!
'The timing of it is the timing of it,' said Premier John Horgan. 'We felt that the best way forward was to collect information and ensure there was accountability.'
Over the past two years the government has commissioned three independent reports on money laundering and its effects on the province's casinos, real estate sector, luxury car market and horse racing.
A report released last week estimated that $7.4 billion was laundered in B.C. last year, including about $5 billion that went into the housing market. That means money from illegal activities made up about two per cent of the provincial economy.
'That criminal activity has had a material impact on people, whether it be the rise of opioid addictions, the rise of opioid deaths as the result of overdoses, whether it was the extraordinary increase in housing costs, people were being affected by criminal activity in British Columbia,' Horgan said. 'I believe British Columbians want to know how this was allowed to happen in British Columbia.'
The Tyee is supported by readers like you
Join us and grow independent media in CanadaCabinet appointed Austin F. Cullen, a B.C. Supreme Court justice, to head the inquiry. Tournoi poker saint amand les eaux. The terms of reference require him to make an interim report within 18 months and a final report by May 15, 2021. The next provincial election is scheduled for October that year.
'We have given him all the powers to compel testimony and gather evidence that his new office as commissioner allows under the Public Inquiry Act,' said Attorney General David Eby.
Some people refused to participate in the independent reviews conducted by Peter German and Maureen Maloney, Eby said. Cullen will have the power to seize records, obtain warrants and order testimony under oath.
Eby said he spoke with Bill Blair, the federal minister of border security and organized crime reduction, who has assured him that the federal government will fully cooperate with the inquiry. He noted federal agencies such as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, that's supposed to protect against money laundering failed to do so.
Horgan said he received the same assurance from Prime Minister Justin Trudeau that the federal government would cooperate. 'This is a national problem with an extraordinary focus here in British Columbia,' Horgan said.
'The inquiry will look at the broad scope of the problem, give us answers about who knew what and when,' Eby said.
Horgan said there have been many calls for a public inquiry into money laundering over the past two years. 'We resisted that initially as we collected information because we wanted to make sure we were doing everything we could for the people of B.C. to demonstrate consequences for the actions of criminals in our economy.'
After doing that work, it was clear the problem was larger than they had thought, Horgan said. 'These are profound problems for our system, to be sure, but they are profound problems for the people of British Columbia as well.'
Finance Minister Carole James said that money laundering had caused the price of housing across the province to be five per cent higher on average than it otherwise would have been, but that the impact was even greater in Vancouver where it may have added as much as 20 per cent to the price of housing.
'That could mean all the difference in someone's down payment or ability to get a mortgage,' James said. 'It's unacceptable to have a housing market that's distorted and inflated by the proceeds of crime while ordinary British Columbians are struggling to find secure, affordable housing.'
Michael Lee, the BC Liberal critic for the attorney general, said it will be up to Cullen who to call as witnesses and what evidence to seek. 'Now that the government has made the decision to put in place a public inquiry, BC Liberals will clearly cooperate with that inquiry,' he said.
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'I know British Columbians are very concerned about money laundering and this inquiry from the government's point of view addresses this concern. This is going to be a necessary process to go through at this time.'
Former minister of public safety and solicitor general Rich Coleman had responsibility for both gambling and law enforcement for many of the BC Liberal government's 16 years in office.
'I'll be totally honest with them with anything I can give them that I'm allowed to disclose publicly,' he said. 'I'm quite happy there's an inquiry. We'll finally get past this innuendo and let's get down some facts.'
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The BC Green caucus released a statement saying it had been calling for a public inquiry and supports the government's announcement.
'A public inquiry into money laundering in B.C. removes the investigation from partisan influence, protects the public interest and restores public trust,' said Green Leader Andrew Weaver. 'This process must be transparent whenever possible throughout the proceedings, and the findings and recommendations must be released in a timely manner.'
Casino Money Laundering Methods
People deserve a full and complete account of how the problem went on for so long at such a large scale, as well as accountability for decisions that individuals and regulatory agencies made, Weaver said.
The B.C. government has already taken various steps to deter future money laundering, including introducing a new public registry to show who owns real estate in the province.
Read more: Rights + Justice, Politics, BC Politics, Housing
