The saga continues of money laundering in British Columbia. The Cullen Commission has been hearing testimony of the practice by Chinese nationals. Their large cash buy-ins are said to be a cultural practice by senior staff at the B.C.
Mike Hiller, a former BCLC investigator, has spoken before the Commission. He saw high rollers routinely bring bags of $20 bills to the casino. This raised a red flag for him. His time as an investigator goes back to 2009. Previously, he was with the Royal Canadian Mounted Police. He was on an Asian crime unit investigation heroin trafficking. He had a theory about the VIP players.
“VIP players were provided cash by organized crime and they were simply being used as a vehicle to get rid of this money…the higher level VIP players who were borrowing hundreds of thousands of dollars were repaying it to the organization in China.”
Of note, per Hiller, casino management said investigators were only there to observe and report. No wonder he did not get much of a response to his concerns. In fact, BCLC newsletters repeatedly downplayed money laundering in 2014.
Hiller apparently had a “confident source” that loan sharks were operating in Metro Vancouver to service wealthy Chinese nationals. Why? They could not get their money out of the country. As a result, illegal money service businesses (MSB) would bundle up the drug cash and provide it to gamblers, who repaid their loans to a connected MSB in Asia.
But Brad Demarais, BCLC’s then Vice-President of Corporate Security and Compliance (now COO) posted a newsletter in 2013, titled “Money Laundering? Not Really.” It countered money laundering accusations by offering a cultural explanation.
Hiller responded after another newsletter in 2014 with similar overtones/ he wrote a report to his bosses, raising the matter of underground banks, or MSBs.
“Considering that we should suspect that most high-level Asian cash buy-ins are
coming from the underground economy, does it not make the VIP players a vehicle
for laundering money? It is a likely scenario that the underground economy includes
the criminal element…most Asian players likely have an agreement in Asia…”
Supplying VIP players with cash works to the benefit of the underground economy because they can launder bundles of cash and move cash offshore.
Using drug cash from underground banks connected to China to buy assets and/or gamble is known in academic circles as the Vancouver Model. Some money from China might be legitimate while some may be sourced from crime.