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Why did Lottery Corp get fined $700,000? According to their appeal, for IT problems

March 2nd, 2011 · 4 Comments

B.C. Lottery got hit with a whack of bad publicity last year, some of because of reports that they had been fined close to $700,000 for reporting irregularities by FINTRAC, the Canadian agency that monitors suspicious or cash transactions in financial institutions, casinos, real estate and more. (No, suspicious and cash aren’t the same.)

As part of the counter-offensive this week, Lottery Corp. president Michael Graydon said that fine was for, essentially, problems with filing in ways that the FINTRAC computer would accept.

Here’s a link to the actual appeal the corporation has filed in federal court. FINTRAC spokesman Peter Lamey said the agency can’t say anything more about the case until a decision is make, so we don’t know what their counter-argument is at this point.

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  • S Garossino

    In 2006 Lily Lo was murdered, and her body was found buried on Jericho Beach. At the 2009 trial of her murderer, evidence was adduced that she had an employer who staffed a 24/7 loan shark operation inside the River Rock Casino, complete with floats to start each shift.

    May 2008, CBC report reveals suspected money laundering under-reported in BC casinos. A spokesperson for the BC Lottery Corp said the corporation does not believe it has done anything wrong.

    In January 2009 the RCMP Integrated Illegal Gambling Enforcement Team (IIGET) issued a report detailing the “extreme” vulnerability of BC casinos to money laundering, loan sharks and other organized crime activity.

    It was noted in the report that due to lack of resources, nothing was being done to investigate FINTRAC reports of suspected money laundering. This report, very heavily redacted, was obtained by Chad Skelton through an FOI.

    One heavily redacted portion of the report commented on the issue of perceived conflict of interest and corruption, but we know nothing further about that subject except that it was raised as an issue.

    In February 2009 the decision was made at the Gaming Policy and Enforcement Branch to disband IIGET.

    April 15, 2009, loan shark Betty “Big Sister” Yan is murdered in Richmond. Her children, attending a west side private school, are removed at the request of parents.

    Summer 2010 FINTRAC fines the BCLC for failing to report suspicious transactions.

    Over a three month period between May and August 2010, while the BCLC was dealing with FINTRAC over its failures to document and report cash transactions, over $8 million in suspicious cash transactions flowed through 2 BC casinos without being reported to FINTRAC.

    These cases included one report of $460,000 in small bills in plastic bags being processed by staff at the River Rock, and $1.2 million in casino chips exchanged at the Starlight.

    Inspector Barry Baxter, head of RCMP Proceeds of Crime Unit, calls the transactions “suspicious”.
    Solicitor General Rich Coleman, responsible for policing AND gaming, says the transactions are not suspicious, and Baxter is out of line for suggesting they are.

    Management at the River Rock describe them as ordinary for the casino clientele.

    Which raises the obvious question: Just what is the profile of the casino clientele who bring in hundreds of thousands of dollars in small bills?

    The Vancouver Not Vegas Coalition is pleased to have the support of former Insp. Peter Ditchfield, former Deputy Chief of the Organized Crime Agency of BC.

  • S Garossino

    ps:
    Clarification: Lily Lo was a loan shark who worked a regular shift at the River Rock. She was intercepted and murdered after leaving her shift at the casino.

  • The Fourth Horseman

    Which begs the question:

    Exactly how is BCLC going to mitigate the problems of money laundering and loan sharking, already so prevalent in BC casinos?

    I’m sure that the report from Rich Coleman, conducted from within the Government of BC, will cast much light on this siuation. *cough*

    Also, does anyone know about policy issues from the Gov of BC re; gambling as a legitimate source of revenue to the Province?

    Is there a policy? I would love to see that conversation on the upsides/downsides and how it defends our government’s involvement in such a sleazy enterprise.

  • Morven

    The ‘dog ate my homework’ argument is being advanced.

    Here we have a multimillion dollar BC operation with well defined legal and regulatory responsibilities. And the board of directors and senior officials are (seemingly) so oblivious to their duty of care that they are incapable of putting in place a seamless electronic transfer of data with FINTRAC.

    I would call it the ‘asleep at the helm’ argument.
    -30-