B.C. Lottery Corp., too slow on dirty money at casinos, says former regulator

VANCOUVER — British Columbia’s Lottery Corporation should have moved faster to protect the integrity of gaming more than a decade ago when it was under attack from organized crime, the public inquiry into money laundering heard Friday.

Larry Vander Graaf, the former executive director of the B.C. Gaming Policy Branch, testified that placing restrictions on cash buy-ins at casinos as early as 2009 could have deterred money launderers.

Vander Graaf, who was fired in 2014 as one of B.C.’s top gaming regulators, said his call for $3,000 casino buy-in limits for those using $20 bills was never implemented because it could not be proven beyond a reasonable doubt the money was illegal.

“We’re protecting the integrity of gaming,” he said under cross-examination by lottery corporation lawyer Bill Smart. “The lottery corporation had sufficient resources and knowledgeable people to deal with that. They should have orchestrated something to prevent that money from coming in or at least say, ‘where did you get the money.’ “

Vander Graaf said large amounts of suspicious cash started appearing at casinos in 2007 and by 2010 loan sharks were circling nearby parking lots with bags of money believed to be from proceeds of crime.

The B.C. government launched the public inquiry after reports outlined hundreds of millions of dollars in illegal cash impacted the real estate, luxury vehicle and gaming sectors in the province.

B.C. Supreme Court Justice Austin Cullen was appointed in May 2019 to head the public inquiry.

Vander Graaf, a 30-year RCMP veteran investigator in drug trafficking and money laundering cases, said his early calls for limits on cash buy-ins with large amounts of $20 bills were also rejected by the government’s gaming policy enforcement branch.

He did not know if his recommendations to stem the flow of suspicious cash in casinos reached the top levels of the government ministry responsible for gaming, Vander Graaf said.

He said he believed the lottery corporation and the gaming policy and enforcement branch general manager would have had to put his suggestions through to government for the changes to occur.

Smart asked if Vander Graaf was just before his time, noting that casinos in Las Vegas hadn’t started limiting suspicious cash until 2014.

“I don’t agree with that,” said Vander Graaf, who added money was flowing in unchecked.

“I mean organized crime is attacking the legalized gaming venues.”

Vander Graaf also testified earlier this week the increase in suspicious cash at casinos coincided with the RCMP’s plans to mount the largest security effort in Canadian history for the 2010 Winter Olympics in Vancouver and Whistler.

Former B.C. cabinet minister Kash Heed has also been granted limited participant status at the inquiry to cross-examine a former RCMP officer.

Last week, Fred Pinnock, a former Mountie in charge of the now disbanded illegal gaming enforcement team, testified Heed told him in 2009 the province’s gaming minister was focused on revenues generated at casinos, not organized crime.

_ By Dirk Meissner in Victoria.

This report by The Canadian Press was first published Nov. 13, 2020.

The Canadian Press