Money Launderers Change Tack, Using Low-Profile ‘Mules’ vs. VIP Players

Posted on: December 10, 2019, 06:25h. 

Last updated on: December 11, 2019, 08:36h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Casino money launderers have changed their methods in Canada, where the media’s spotlight on British Columbia’s dirty-cash scandal has forced criminals to adopt new strategies.

Casino money laundering
Cash used to be brought into British Columbia casinos in plastic bags. Now criminals are employing more subtle methods. (Image: CBC.ca)

That’s according to the federal Financial Transactions and Reports Analysis Centre of Canada, aka Fintrac, which this week alerted casino operators to pay close attention, not to high-stakes players, but to low rollers who fund their gambling via bank drafts.

The plastic bags filled with banknotes that were swapped for chips to fund VIP gamblers have been ditched in favor of something altogether less conspicuous – low-fi “money mules” who are washing cash, wittingly or unwittingly, for the benefit of criminal enterprises.

Draft Dodgers

In an “operational alert” released this week, Fintrac is asking casinos to pay particular scrutiny to customers who regularly use back drafts to buy chips or fund a gaming account.

These players may also be accompanied to a casino by someone who is subject to a gaming ban. Or they may live in a jurisdiction with “currency control restrictions,” such as China.

Fintrac said mules commonly listed their occupations as “student,” “housewife,” or “unemployed,” and their bank accounts demonstrated “in-and-out activity, with a high volume of cash deposits from various unknown sources, which were then used to purchase bank drafts payable to third parties or casinos.”

Bank drafts are favored because of their liquidity and “quasi-anonymity,” the agency said.

Laundry Cycle

British Columbians are still reeling from the revelation that, by 2016, the province had become a “laundromat for organized crime,” in the words of an independent report commissioned by Attorney General David Eby and published in May 2019.

Leaked security footage from Vancouver-area casinos showed images of banknotes being carried into casinos in plastic bags. The cash was largely supplied by underground banks intent on laundering money from the sale of drugs shipped to Canada from South America, and the fentanyl factories of China’s Guangdong province.

In thrall to the spending habits of Chinese high rollers, the casinos were prepared to turn a blind eye to anti-money laundering controls, and adopted a culture of accepting large volumes of cash without enquiring about the source.

The province launched a public inquiry into money laundering following the publication of the report, which suggested that billions was being washed through its casino sector and housing market each year. That was driving up housing prices and contributing to the opioid crisis.

The criminals may be adapting, but so are authorities. Fintrac’s alert is based on the latest findings of Project ATHENA, which initially began as a BC probe into money laundering at casinos in the Lower Mainland area.

Project ATHENA has since expanded to a national focus, and has increased its scope to include real estate, luxury vehicles, and high-value goods.