Two of the B.C. casino company executives, including Great Canadian Gaming CEO Rod Baker, complained to executives of BC Lottery Corporation in 2015 that their income was hit because investigators of Lottery Corp. had questioned high rollers at Richmond’s River Rock Casino who was linked to a Chinese transnational gang, the money laundering investigation of the province has heard.
Lottery Corp. Chief Operating Officer Brad Desmarais was questioned on Monday by lawyers for the Cullen Commission about Baker and Vancouver Edgewater Casino executive Michael Graydon’s allegations. In September 2015, Graydon contacted Desmarais to complain about the business effects of high-roller interviews, the enquiry heard. And he called Baker the Lottery Corp. Jim Lightbody, CEO.
In July 2015, the Crown corporation learned from the RCMP that a number of high rollers from River Rock were allegedly funded by a transnational drug trafficking network with connections to terrorist financing, the investigation heard. This caused the Lottery Corp. to query high rollers about their source of funds who were connected by police to the suspect of organized crime, Paul King Jin. But the executives of the casino felt that lucrative patrons were being scared away.
“We are acutely aware of the revenue implications for both of us,” Desmarais emailed to Graydon, the inquiry heard.
Desmarais said he was “pressing” B.C.’s casino regulator to disrupt illegal casinos where the high rollers may have taken their business.
The inquiry also heard about a September 2015 email from Lottery Corp. CEO Jim Lightbody to Desmarais. Lightbody had previously testified that Baker complained to him about driving away River Rock high rollers with source-of-funds interviews.
Lightbody’s email to Desmarais said that “I called Rod today … reiterated (Lottery Corp. compliance executives Desmarais and Robert Kroeker would work with Great Canadian staff). He seemed to calm down.”
Desmarais was probed Monday about a series of emails between him and Lottery Corp. investigator Daryl Tottenham in December 2014.
In only seven days, a River Rock patron made $1.8 million in transactions with small bills, the investigation heard, and some of the suspicious transactions of the high roller were not reported by casino employees. Tottenham alerted Desmarais about the alarming transactions in the middle of the spree and that the patron was likely to return to the casino the next night.
Desmarais replied, asking if the VIP could be questioned by River Rock about his source of funds. The patron, however, continued with suspicious cash transactions and he was not questioned by River Rock workers, the inquiry heard.
Tottenham said in the email Desmarais, adding that it might be best for Lottery Corp. investigators to interview the patron instead that “I recognize we do not want to jeopardize revenue.”
Last week, the investigation found that Graydon, who was CEO of Lottery Corp. until 2014, had forced executives to meet their revenue goals or have their bonuses withheld.
The revenue pressures occurred during B.C. Employees of the Gaming Policy Enforcement Branch urged Lottery Corp. management to crackdown on hundreds of millions in $20 bills flooding into B.C. Casinos were funded by Asian gangs through the bets of Chinese high rollers that the branch thought were.
An email from Graydon to his Lottery Corp. executives said the inquiry heard that “I want to stress to this group that it is critical that we come in on budget from a net revenue perspective. I expect everyone to achieve that.”
He pushed back on the enforcement branch’s alert when Desmarais was hired in 2013 that organized crime was flooding B.C. Chinese casinos with drug cash, the inquiry heard.
In one case, he wrote an internal report that indicated that the source of funds for foreign high rollers was legal underground banking, the investigation heard, and that big amounts of cash in B.C. casinos were “often erroneously associated to organized crime.”
The investigation also heard that a “technical briefing” on B.C. was given by Desmarais in December 2014. Casinos to Cheryl Wenezenki-Yolland, the deputy minister responsible for gaming, and that there was also Lightbody and a staffer for Mike de Jong, then minister of gaming.
Commission lawyer Alison Latimer asked Desmarais why he told Wenezenki-Yolland that the high rollers’ source of cash could be clarified by ways of international underground banking.
Desmarais had already met with B.C. anti-gang units to discuss investigations into a suspected Asian organized crime loan-sharking ring at River Rock Casino, Latimer said, and that he had communicated repeatedly with Lottery Corp. investigator Mike Hiller, who told him that most Chinese high rollers at the casino got their cash from loan sharks and arranged to pay back loans in China.
Latimer asked that “Did you tell (Wenezenki-Yolland that the suspicious cash used by high rollers) could be attributed to underground banking?”
Desmarais said that “I never said it was entirely attributable.”
Latimer noted that Wenezenki-Yolland expressed concern that underground banking transactions could violate the “banking act” of Canada.
Desmarais told Latimer that he had agreed with Wenezenki-Yolland, but he did not take any action with regard to the issue she had raised.
And Desmarais maintained that he still believes that most high-rollers of River Rock were legitimate business people who were “unwitting” of being funded by transnational drug trafficking and money laundering schemes, which is what the RCMP said.
This week, his cross-examination was scheduled to begin.
In January, Rod Baker stepped down as president of Great Canadian Gaming after he and his wife were investigated for misrepresenting themselves in order to get an early dose of the COVID-19 vaccine.
It’s still possible to summon Baker to testify at the inquiry, reported to Global News by a spokeswoman for the tribunal.
Source: https://globalnews.ca/news/7612942/bc-casino-executives-complaints-cullen-commission/
