Casino Money Laundering Canada

1. Money Laundering Stages
2. Anti Money Laundering

'Between 2017 and 2019, the OPP laid 23 charges, of which three related to money laundering, and seized cash on four occasions,' the report states. The most serious cases of suspected money laundering took place at the Niagara Fallsview Casino Resort where 862 dubious transactions took place totaling $136 million in 2019. Beeksma, who works as an anti-money laundering specialist with the lottery corporation, said he did not intervene in the suspicious transactions at the direction of managers who ran the casino. The August DEA report, Money Laundering in Canada, says Canadian drug traffickers intent on using casinos to launder their proceeds begin by purchasing chips or opening an account at the gambling establishment. The trafficker gambles, but is careful to lose only a relatively small sum of money, the report notes. Not all gaming establishments are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in Canada – only those that fall within the definition of a “casino”. A casino is any entity that is licensed, registered, permitted or otherwise authorized to do business under §207(1)(a) to (g) of the Criminal Code of Canada and that conducts its business activities in a. The Canadian province of Quebec will launch an independent audit to gather information about possible money laundering and criminal activities in publicly owned casinos, the province's finance.

A saleswoman shows customers an Aston Martin at a luxury car dealership in Vancouver, British Columbia on October 10, 2015. Sales of expensive cars and export to China have jumped and is being tied to money laundering (Julie Gordon/Reuters)

Money laundering definition from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) : the process used to disguise the source of money or assets derived from criminal activity. There are generally three stages in the process:

• -Placement: involves placing the proceeds of crime in the financial system;
• -Layering: involves converting the proceeds of crime into another form and creating complex layers of financial transactions to disguise the audit trail and the source and ownership of funds (e.g., the buying and selling of stocks, commodities or property); and,
• -Integration: involves placing the laundered proceeds back in the economy under a veil of legitimacy. (FINTRAC)

Last year an international investigation led by Peter German, former deputy commissioner of the Royal Canadian Mounted Police, estimated that British Columbia’s casinos were being used to launder up to $1 billion annually. The report suggested the money was coming primarily from Asian crime groups who then invested in expensive Vancouver and area real estate.

B.C. Attorney General David Eby (background) and investigator Peter German at the release of German’s report, Dirty Money, in Vancouver, June 27, 2018, into money laundering at B.C casinos, German’s latest report looks at laundering through exotic car purchase and export. (Yvette Brend/CBC

Casinos- now luxury cars

Suddenly Vancouver has also become a North American hotbed for extremely expensive exotic cars.

Now investigator Peter German has found the loophole. While large scale transactions involving cash raise alarms, this has not been the case for vehicle sales, including super exotic cars where dealers are not required to report large transactions to FINTRAC.

B.C. Attorney General David Eby noted in a news conference about the findings said ,“In the luxury-car market, there is no financial reporting of large cash purchases, no oversight of international bank wire transfers and no apparent investigation or enforcement. The report also uncovered a complicated luxury-vehicle export scheme.”

Sales of exotic cars have skyrocketed in Vancouver and at other exotic dealerships elsewhere in the province. Provincial sates tax is returned to buyers if the car is not be licensed in B.C. such as if it is exported. Last year $28 million in tax was rebated to buyers who quickly exported the cars, mainly to China.(Christina Low)

Criminals use straw buyers who sometimes bring bags of cash for vehicle purchase or non-identifiable bank drafts, from small amounts of international wire transfers sent to multiple bank accounts., Perhaps surprisingly, a story in the Vancouver Sun noted that some of the so-called straw buyers were not able to speak English.

The vehicle then is turned over to the “real” buyer who may then resell to an exporter who ships it offshore, usually to China.

Money Laundering Stages

The Lamborghini Aventador SVJ on display at the Auto Exotica exhibit of the 2019 Canadian International AutoShow. Dealers at the show say sales have been kicked into overdrive in the last 3 years, from a few hundred to thousands, often to ‘well healed newcomers” (Philip Lee-Shanok/CBC

Adding insult to injury, once the car is sold abroad, the seller can apply for a rebate on the provincial sales tax. (PST) which on an expensive car can mean a huge sum is returned to the buyer.

Huge increase in exports and rebates given

German’s report notes that prior to 2014, PST rebates were fewer than 100. That jumped to over 700 in the following two years, then to over 3,600 in 2016. Last year the number of rebates give for luxury and exotic cars exported was over 4,400. The rebates total $85 million since 2013, with $28 million of that in 2018.

Anti Money Laundering

The report indicates several buyers have made multiple purchases and rebate requests.

The 300 page report is the second portion of investigator Peter German’s look into money laundering in British Columbia. Last June his “Dirty Money” report found substantial money laundering through the province’s casinos.

Video released by B.C’s attorney general shows casino customers bringing in bags of cash to one of B.C.’s casinos in an apparent act of money laundering. (B.C. attorney general)

British Columbia is now studying the report towards developing new rules, however coordination at the federal level would also be required

German’s full report will include money laundering and the real-estate market in the province.

Additional information-sources