Money laundering in Ontario: Suspicious cash transactions spike after B.C. casino crackdown

Wednesday 29th January 2020

As British Colombia's government rolled out new laws aimed at cracking down on massive, questionable transactions flowing through casinos on Canada's West Coast, the number of suspicious cash investigations in Ontario's casinos more than doubled in 2018, a Global News investigation has found.

Experts fear the international drug cartels that targeted B.C. casinos to wash dirty money have now shifted their focus to Ontario.

"Money laundering is like a product of their crime, just like dead kids and corrupt politicians. So that dirty money will find the cracks and flow to more vulnerable systems in Canada," said Calvin Chrustie, a former senior RCMP officer who targeted transnational organized crime groups in Vancouver and internationally.

The Ontario Provincial Police (OPP) logged 945 suspicious transaction investigations at casinos in 2017. That more than doubled to 2,266 transactions in 2018 -- a roughly 140 per cent increase, according to data obtained exclusively by Global News.

The OPP data shows suspicious transaction investigations, which include investigations into potential money laundering, continued to trend higher in 2019, with 1,327 investigations in the first seven months of the year.

Each suspicious transaction investigation by the OPP can refer to multiple transactions in casinos across the province.

B.C. tightened restrictions on cash flowing into casinos in January 2018.

Two months later, B.C. Attorney General David Eby told a House of Commons committee that the value of suspicious transactions at B.C. casinos plummeted from a high of $20 million a month in July 2015 to just $200,000 a month in February 2018.

"We have reduced it by a factor of 100," Eby said. "I believe that money has moved elsewhere."

Experts say that as criminal networks sought out different regions in which to park their dirty cash, their focus may have turned to Ontario.

"The criminal networks involved haven't been touched, and they are still selling their drugs and making their money," Chrustie said.

In an interview with Global News, Chief Supt. Bill Price of the OPP's dedicated casino investigations unit acknowledged that due to an intense spotlight and new restrictions in B.C. casinos, money launderers likely have shifted focus to Ontario casinos.

But Price said the 140 per cent increase in suspicious transaction investigations is also due, in part, to more gambling in the Greater Toronto Area and the OPP's increased scrutiny of that gambling.

"If you turn a slot facility into a full-blown casino with table games, there's larger transactions that automatically occur that should generate suspicious transaction reports," Price said. "Woodbine (casino) itself went from a slot facility to a full-blown casino. That changes the dynamics.

"Are we concerned about people from other jurisdictions coming here to infiltrate our casinos? Absolutely. But we have a very good model in place to prevent that and disrupt that activity as much as possible."

The new data shows there is a "preponderance of money laundering" flowing through the province's casinos that requires immediate action from Doug Ford's Progressive Conservative government, said Garry Clement, former director of the RCMP proceeds of crime unit.

"The only way we're ever going to get a full understanding and get a handle on it, is really to do a deep dive and recognize that there is likely a substantial amount of money laundering occurring."

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Global News has previously reported that, in the past decade, just under $2 billion in suspicious cash could have flowed through B.C. Lottery Corp. casinos, with large amounts funded by loan sharks and criminal bank drafts.

B.C. is set to begin an inquiry on how money laundering has distorted the province's housing market and contributed to the ongoing opioid crisis.

Exactly how much dirty money is being laundered through Ontario casinos is unknown. But the same method of money laundering seen in B.C. -- known as bulk cash "refining" -- is being used, Price said.

"A very basic example of currency refining is you walk into the casino with $10,000... Very minimal gameplay, you go to the cashier's cage and cash out with $9,000. You've got a casino receipt, and you've just basically laundered $9,000," he said.

The method described by Price was used in several Ontario casinos by the Figliomeni crime family, according to York Regional Police.

Last July, a joint OPP investigation with Italian police -- dubbed Project Sindacato -- alleged Angelo Figliomeni and nearly two dozen others linked to the 'Ndrangheta organized crime syndicate may have laundered roughly $70 million through Ontario casinos.

Figliomeni was charged with directing a criminal organization and possessing proceeds of crime, and charges related to defrauding the government, willfully evading taxes and making false tax statements. The allegations have not been proven in court.

Details of the lengthy investigation alleged members of the Figliomeni crime family were given VIP treatment at Ontario casinos, including limo rides, meal vouchers, tickets to shows and free booze, according to police.

"They were treated very well," said York Regional Police Det. Sgt. Carl Mattinen.

The 'Ndrangheta originates from Calabria, Italy, and according to a 2013 Europol threat assessment, is one of the world's wealthiest and most powerful organized crime groups, with tentacles stretching around the world, including into Ontario.

High-ranking members of the Figliomeni crime family went to the casinos nightly with $30,000 to $50,000, according to Mattinen.

"They would gamble a lot, treat it almost like a tax. You lose a little bit of funds and you leave with clean cash," he said.

Mattinen wouldn't name the casinos favoured by the alleged gangsters -- targets of Project Sindacato -- because the case is still before the courts.

Ontario Lottery and Gaming Corporation refused to comment, as the matter is the subject of an ongoing criminal investigation.

"OLG does not disclose the specifics of a customer's play history in accordance with personal privacy rules," a spokesperson said.

Clement said that if one crime network was using casinos to launder the proceeds of drug dealing and illegal gaming, there are likely others.

"Criminals go to the lane of least resistance," he said. "If that group was doing $70 million, I can tell you there are other organized crime groups doing $70 million."

Great Canadian Gaming Corp., the operator of the expanded Woodbine casino, was asked to respond to the sharp increase in suspicious transactions investigations logged by the OPP at the casino since its new table-gaming operations were launched in 2018.

In 2017, there were eight suspicious transactions investigations recorded by the OPP, and in 2018, there were 58. From January to Aug. 1, 2019, there were 76 suspicious transactions investigations logged by OPP investigators working at the Woodbine casino.

"Like other gaming operators based in Canada, Great Canadian has a clearly delineated role in Anti Money Laundering (AML) protocol as set out in federal legislation," a prepared statement attributed to Great Canadian's chief compliance officer Terrance Doyle said.

"Fundamentally, our role is to identify and report unusual and large cash transactions. In undertaking this role in Ontario, our obligation is to adhere to all mandated rules and regulations, and even exceed those requirements to ensure a robust AML regime is followed."

Almost three-quarters of people accused of money laundering in Canada go free. From 2000 to 2016, 321 people were found guilty in money-laundering cases, resulting in a conviction rate of around 27 per cent.

Chrustie -- who runs a global risk consultancy service focused on organized crime threats -- believes Canada's inability to fight transnational organized crime is the root of the money-laundering problem. And even if police and prosecutors focus on money laundering, only changes to the legal system will put them in a stronger position to target international gangs, he says.

Canada's courts require police to reveal massive amounts of case evidence to defence attorneys under tight deadlines -- in comparison to American and Australian court systems -- which can lead to errors that hinder prosecutions.

"Transnational gangs are operating in an ocean, and Canadian police are operating in a fishbowl," Chrustie said.

Anti-money-laundering experts told Global News this issue was a factor in Canada's largest-ever money-laundering probe, the failed RCMP E-Pirate investigation, which targeted a mainland Chinese drug cartel allegedly laundering cash in B.C. Lottery casinos.

Another factor making Canada an attractive place to launder money is a lack of experienced investigators and prosecutors to take on these complex financial crimes, according to Clement.

Clement pointed to the shuttering of the RCMP's financial crime units in B.C. in 2009 and in Ontario just this past December.

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