A report on money laundering in Canadian casinos by drug-trafficking gangs exposes more than just gamblers showing up with bundles of $20 bills. Here’s a lesson for fraud examiners whose blinders might force them to focus on just one type of fraud.
Fraud schemes seldom are geographically localized, but here’s an exception: transnational drug-trafficking gangs laundering cash through casinos in British Columbia, Canada. The so-called “Vancouver model” operation — primarily involving the River Rock
Casino in Vancouver’s suburb of Richmond — exposed Canadian fraud vulnerabilities and potentially worsened drug abuse and housing affordability in the region.
In September 2017, British Columbia Attorney General David Eby appointed Peter M. German, QC, a former Royal Canadian Mounted Police (RCMP) deputy commissioner for western and northern Canada, and principal of his consulting firm, to conduct an independent
review of the Vancouver model. The report, released to the public on June 27, 2018, prompted regulatory reforms and a further inquiry into the purchase of Vancouver-area real estate with laundered money. (See German’s commissioned report, “Dirty Money: An Independent Review of Money Laundering in Lower Mainland Casinos conducted for the Attorney General of British Columbia,”
March 31, 2018.)
German, a lawyer and the author of the textbook, “Proceeds of Crime and Money Laundering,” says during a recent Fraud Magazine interview that his review follows a string of previous reports and investigations into casino money laundering dating
back to 2011 that failed to end the growing problem.
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