U.S. Regulatory Regime Favorably Cited in Report for B.C. Attorney General
First Part in a Two-Part Series on Gaming Industry and AML
British Columbia’s (“B.C.”) Attorney General David Eby recently released an independent and very detailed report examining money laundering in B.C.’s gaming industry and providing 48 recommendations to combat the problem. Eby appointed Peter German, a former deputy police commissioner and leading expert on money laundering, to conduct a six-month investigation into allegations of money laundering in the Lower Mainland casinos after reports emerged that one Vancouver-based casino accepted $13.5 million in $20 bills over the course of one month in 2015. See Peter M. German, QC, Dirty Money: An Independent Review of Money Laundering in Lower Mainland Casinos Conducted for the Attorney General of British Columbia (Mar. 31, 2018) (“German Report”).
Following German’s investigation, which included over 150 interviews with industry and government insiders in B.C., Ontario, and the United States, German issued the German Report to detail his findings and recommendations. The report reveals that a multitude of alleged criminal syndicates, tied primarily to China, have used Vancouver-area casinos to launder money. It highlights the anti-money laundering (“AML”) challenges faced by a predominantly cashed-based industry, and also underscores the systemic issues that have made B.C.’s gaming industry an alleged breeding ground for money laundering: a dysfunctional, fragmented regulatory regime that lacks independence. To streamline and strengthen B.C.’s regulatory framework, the German Report recommends creating an independent gaming regulator analogous to the regulatory regime in the United States. The German Report focuses on the Nevada Gaming Commission and Nevada Gaming Control Board, whose Enforcement Division “acts as a first line of defence against organized crime and bulk cash buy-ins[,]” whereas the federal Financial Crimes Enforcement Network, “[i]n partnership with Internal Revenue Service, acts as the enforcement arm for most money laundering issues.”
In announcing the German Report, Eby blamed the former Liberal government for “turn[ing] a blind eye to the escalating money laundering in B.C. casinos.” He also stated his acceptance of all 48 of these recommendations.
In this post, we will describe the findings and recommendations of the German Report. In the next post, we will contrast the B.C. regulatory regime described in the German Report with the AML regulatory regime in the United States involving the gaming industry, and the recent enforcement actions which it has produced.