BC Money Laundering Scheme Dubbed ‘Vancouver Model’

By Ben Hamill - October 18 2018

Money laundering

An extensive scheme has been using British Columbia’s land-based casinos to launder money for the past 10 years. Now the province’s Attorney General, David Eby, is taking steps to curb the operations, which have been dubbed the ‘Vancouver Model’.

David Eby’s Rude Awakening

Eby had only been Attorney General for a few days in 2017 when he found out the extent of the fraud, and it was something of a baptism by fire. Casino regulators showed him footage of individuals carrying hockey bags or wheeling suitcases stuffed with $20 bills, and then exchanging them for gaming chips.

The Attorney General’s government soon introduced measures to deal with the laundering, by demanding that regulators constantly monitor high-risk establishments, and that proof of legitimate sources be provided for casino payments over CAD 10,000. By and large they have been successful, and government estimates say suspicious casino transactions are 100 times lower than they were in 2015.

Peter German’s Investigations

Earlier in 2018, Eby’s office enlisted Peter German, a former police officer and an expert on money laundering, to discover how the Vancouver Model worked. His first report was made public in June, and explains how criminals in China duped wealthy individuals who were looking for a way to circumvent the country’s currency controls.

These private citizens would travel to Canada, on the pretense of going on a gambling holiday. Before they left, they would transfer whatever they were planning to spend in the casino into the launderers’ accounts. Then, when they arrived to play in Vancouver and surrounding regions, they would be given bags of money that could be exchanged for chips. Losses went back to the province, and wins appeared to be clean.

The money that the wealthy citizens are given is the profit from criminal activities, although Eby says his office is not sure what those are at this stage. The scheme is believed to have started in 2009, when policing casinos became the responsibility of local rather than provincial authorities, and to have peaked in 2015.

Part of the reason for its success is that no one seemed to question arriving to gamble with hundreds of $20 notes. As well as this, any background checks into those that were buying the chips would not show criminal activity.

Far-Reaching Effects

Although Eby’s efforts have been successful, there is more that needs to be done. Some laundering is still happening, and the Vancouver Model is believed to have considerably contributed to British Columbia’s current opioid crisis. The impact that it had on the province’s housing crisis is also being examined by the Attorney General’s office.

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