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BCLC suppressed investigations of casino high rollers, investigator says

Great Canadian Gaming Corp. initially expressed opposition to interviewing high-rolling patrons, commission told
Gambling in B.C. casinos ramped up between 2010 and 2015, particularly at Richmond's River Rock Casino and Resort | Richmond News files

British Columbia Lottery Corp. casino investigator Steven Beeksma says he was once told by his boss to “cut that [expletive] out,” after questioning high rollers at Richmond’s River Rock Casino and Resort in 2012.

Taking the stand Monday at the Commission of Inquiry into Money Laundering in B.C., Beeksma told Justice Austin Cullen that then government lottery corporation (BCLC) vice-president Terry Towns told his investigators in 2012 to stop interviewing casino clients.

Beeksma said casino bosses from River Rock’s Great Canadian Gaming Corp. (GCGC) had expressed opposition to the interviews to BCLC managers, such as Towns.

The anecdote is part of a bigger picture Beeksma painted that indicates authorities had to play catch up on anti-money-laundering policies after the province went on a casino-building spree and significantly increased betting limits from the mid-2000s to today.

Beeksma said the relationship between BCLC and GCGC had its “ups and downs” as gambling in B.C. casinos ramped up between 2010 and 2015, particularly at River Rock where wealthy patrons, particularly Chinese nationals, were courted by the company with gifts, higher betting limits and VIP rooms.

Beeksma became a BCLC investigator in 2010, after first starting work as a surveillance shift manager for GCGC at Richmond’s old casino. Beeksma described the rapid growth in cash-based gambling and some of the struggles authorities at all ends faced in managing the risks involved as BCLC promoted industry growth.

For instance, Beeksma stated how an unusual buy-in at the old facility in north Richmond, around 2005, was $20,000 whereas after 2010 patrons were carrying in upwards of $800,000 in cash, usually sorted by $10,000 stacks of $20 dollar bills stuffed in bags. He told how one of the biggest players in the province at one point in time was a self-described real estate developer. Many players had successfully exchanged $20 bills for $100 bills after gambling for only short periods – a process known to Beeksma as “refining.”

Beeksma told of how River Rock went from having $500 chips to $5,000 chips and BCLC increased Chinese baccarat bets to $100,000.

Around 2014, Beeksma said investigators had been given no direction to ban certain patrons bringing in large sums of money. And if a player was gambling money (putting it at “risk”) it was not considered money laundering. With little direction, Beeksma said he was left to assume bags full of cash could be proceeds of crime.

The company’s lawyer, Mark Skwarok, cross-examined Beeksma, who agreed company officials had always done what was required of them under law, such as reporting large and suspicious cash transactions.

When it came to filing reports, “I think they did fine,” Beeksma said .

Beeksma agreed it was incumbent on BCLC, FINTRAC and law enforcement, including police and the Gaming Policy Enforcement Branch, to follow up on the casino’s transaction reports.

After all, “it is Great Canadian’s reporting that piqued the interests of BCLC,” said Skwarok.

It wasn’t until 2015 that all patrons – and not just select, targeted ones – were required to provide source-of-funds proof to the casino, said Beeksma, whose role was only to observe, record and report. That same year, BCLC investigators such as Beeksma were directed to interview certain patrons, the commission heard.

As a result of these interviews, Beeksma and others became aware of several money service businesses operating in Richmond. Initially, Beeksma said any direct link between drug money and these businesses was not apparent.

“It made sense to me if you’re coming from a foreign country you would use a money service business” as opposed to a local bank to obtain cash, he said.

As it turned out, the public became aware of at least one such business when money laundering charges were stayed in 2018 against Silver International Investments Ltd. principal operators, Caixuan Qin and her spouse Jian Jun Zhu, who was murdered last month at a sushi restaurant alongside associate and fellow alleged money launderer Paul King Jin, who was injured.

Jin also had charges dropped by the Crown, but the province’s Director of Civil Forfeitures is now attempting to take away his known assets in a civil proceeding. Jin was a client of Silver International, which was alleged to have been laundering up to $1.5 million per day.

From 2011 to now, the anti-money-laundering regulations are “night and day,” said Beeksma.

Lawyers for former BCLC executives Jim Lightbody and Robert Kroeker both highlighted the improvements made around 2015.

Lightbody became president and CEO in 2014 whereas Kroeker left GCGC as head of security to join BCLC in 2015, as its own head of security and compliance. Both men have special standing status to cross-examine witnesses answering questions brought up through the course of the inquiry. Lightbody is on leave; Kroeker left in 2019.

The hearing continues.