Canada’s federal anti-money laundering agency has notified casinos to be wary of customers paying with bank drafts, highlighting this as a new laundering method. The warnings come after the agency analyzed a number of suspicious casino transactions and found that criminals were increasingly favoring these forms of payments.
Fintrac, Canada’s anti-money laundering agency, will outline new methods that international criminals are using to launder funds through casinos in a forum hosted in Ottawa (pictured). ©Albert Dezetter/Pixabay
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The Financial Transactions and Reports Analysis Centre of Canada, or Fintrac, issued an operational alert outlining how cash has been taken over by bank drafts as the favored method for illicit casino transactions due to heavy media coverage in British Columbia. Criminals are also using low-roller mules as opposed to high-rollers with cash, the organization reports. River casino schenectady ny poker rules.
A bank draft is a payment method that ensures that funds are guaranteed by a financial institution. Similar to a cheque, it’s difference lies in the fact that the payer is listed as the bank as opposed to the individual supplying the funds.
It’s believed that bank drafts are preferred due to their relative anonymity and liquidity. However, the new method is one of a number of ways that Fintrac has found that criminals are laundering dirty money according to Fintrac director Nada Seeman.
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“They will always be looking at different ways to do it, and our job is to be a step ahead of them and figure that out,” she said. “We can’t stop everybody, but we are working extremely hard on this and we are committed to doing more.”
It was also reported that often these laundering players will be accompanied to a casino by someone with a gaming ban. The first kind of mule often listed their occupations as “student” or “unemployed” and may live in areas with currency control restrictions.
Their bank activity was often quite suspicious, with rapid withdrawals of deposited funds and a high volume of deposits from mysterious sources. These withdrawals were then used to purchase bank drafts payable to third parties or casinos.
The second type of money mule reported their occupation as “homemaker.” Their bank accounts also had a lot of deposits from unknown sources, wire transfers from third parties or trading companies. It is believed that in some of the scenarios, the mules may be acting unwittingly to the nature of the crime.
The Fintrac alert was released as part of Project Athena, a police-led initiative with the aim to disrupt money-laundering activity in Canada. The organization’s main aim is to track cash linked to criminal activity by analyzing hordes of information from various financial institutions or industries with high cash flow, like casinos.
Project Athena is using similar tactics as other anti-criminal efforts such as those used to disrupt the fentanyl epidemic and human trafficking. Last year alone, Fintrac shared over 2,000 intelligence pieces to authorities relating to suspicious financial activity. Of these, 30 were related to Project Athena.
The Investigation
British Columbia launched the investigation into money laundering in May after numerous reports found that the district was being used to launder billions of dollars of criminal funds. The reports found that in addition to casinos, criminals were targeting the real estate market and other sectors.
In fact, according to an independent report commissioned by Attorney General David Eby, by 2016, the province had become a “laundromat for organized crime.” The release of the information was accompanied by leaked casino security camera footage that showed launderers carrying cash into casinos in plastic bags.
The cash was found to be largely sourced from the illegal sale of drugs shipped to Canada from South America and from China’s fentanyl factories. Often, this cash was brought in by Chinese high-rollers. The casinos came under intense scrutiny when it was discovered they consciously overlooked anti-laundering measures like investigating the source of the cash.
The governmental and public outcry from the revelations prompted an inquiry into money laundering in the region and thus Project Athena was created to investigate criminal activities at casinos in the Lower Mainland region. Over the course of six months, the investigation has grown to include the nation and the real estate and luxury items sectors.
“Most British Columbians are concerned about the state of federal law enforcement in our province, as it relates to money laundering and trans-national crime. If they’re not, then they haven’t been hearing the stories about the lack of police officers dedicated to that issue.”– David Eby, Attorney General, British Columbia
Since Fintrac’s findings on the use of bank drafts, some financial institutions and casinos have already added identifying information on the drafts which require patrons to provide a source-of-funds receipt for gaming buy-ins over $10,000.
Fintrac director Nada Semaan will continue to outline further tactics in an upcoming Fintrac forum in Ottawa, which is intended to boost ties between the gaming sector and anti-money laundering authorities.
There are several key methods that criminals deploy when money laundering. Many groups rely on breaking up the deposits into small tranches to avoid flagging in a practice known as structuring. Others simply buy chips with cash, spend some time on the casino floor and attempt to cash them out as winnings. There are many methods that involve the use of shell companies to conceal transactions, bank accounts and individuals involved. It is an incredibly complex area of finance and one that the authorities are fighting tirelessly to stamp out in all forms.
What Makes Casinos the Perfect Target?
Casino gambling is a brilliant way to make money disappear, and reappear in separate bank accounts. Obviously, the casino industry takes measures to make this difficult which we will explain in more detail down the page. The casino does not necessarily need to be complicit in the money laundering activities for criminals to be successful, but many have known to be in the past. With so many underground markets operating throughout Asia, Europe and America – criminals have plenty of casinos and sports betting operators they can exploit to launder their dirty cash.
Without the compliance of the regulated casino industry, this is an uphill battle that the authorities cannot fight alone. There are many motivated, and well-funded criminal gangs that are persistent in their efforts to use casinos to launder money. Within the casinos, themselves exist many vulnerabilities that can be easily exploited. The staff in casinos represent one of the biggest risk factors for money laundering, as they are often low-paid administrative staff that can be easily bribed or threatened to assist the criminals laundering their money.
But what makes the casino money laundering so appealing rather than off-shore shell companies or other such methods.
The three biggest reasons for money laundering at casinos are:
- Casinos and sports betting operators have enormous cash flows that make it easy to bets intended for money laundering within the sea of transactions flowing in and out.
- It doesn’t matter who you are, whether you’ve been convicted of financial crimes or where your money comes from. The majority of casinos around the world are happy to accept wagers from anyone with hard cash to gamble.
- High-rollers are a major source of profit for many casinos – in order to maintain a strong a favorable relationship with the client, staff may ignore or turn a blind eye to any suspicious transaction.
As you can imagine from the above statements, revenue and profit are huge motivating factors for the casinos. It is difficult to deny that casinos are powerless to stop this activity, and certainly more needs to be done from industry regulators to enforce systematic checks on customers that set-off red flags with suspicious depositing activity.
Industry regulators certainly have a part to play, by scrutinizing large casino companies around the world they regularly audit and analyze financial statements looking for irregularities. The biggest operators make enough money from legal transactions, and it tends to be smaller casinos in less stringent jurisdictions that are complicit with money launderers. In Asia, there has been a long-term problem with this illegal activity – and a thriving underground gambling industry.
Anti Money Laundering Controls
Things are a little different online, especially if you are gambling in the UK or another strictly regulated market. Wizard of oz slot machine to buy. If you are worried about what might be going on at your favorite casino site, have a look at our guide to casino safety to see what reputable sites are doing to keep everything above board.
Fighting Against Money Laundering with Regulation
Within tightly regulated industries such as Europe and North America casino money laundering is a very low threat to operations. The regulators in these territories are very diligent, using a mixture of law enforcement integrations, technology, and correct procedures to mitigate the problems. Communities in Europe and North America are more resistant to the risks associated with exposing themselves to organized crime and are more active in their resistance to money launderers.
However, the Asian gambling industry is worth over $180bn annually. Before the market became such an enormous part of the local economy, a strong and thriving underground gambling scene was firmly established. Even now that big corporate casino interests have a firm hold on the market, the dark underbelly still remains.
Certain casinos within Asia are notorious for being connected to the criminal underworld – on a much larger scale than any European equivalent. It has been proven in the past that the Yakuza has a strong grip over many gambling operators in Japan, and in South-East Asia there have been several high-profile match-fixing and money laundering busts in the past decade.
The tide is turning though. Many of these casinos have begun enforcing identity checks on their new customers. More importantly, the range of payment options that was previously available has been refined to a select few, in this scenario payments are much more easily traced. The ability to use different accounts for deposits and withdrawals has enabled casino money laundering in the past, ending this practice will do a great deal for squashing the remnants of money laundering in this industry.
Is the Game Up for Money Launderers?
Casino Money Laundering Schemes
Obstructing the use of casinos as a vehicle for money laundering is a constant battle between law enforcement, criminals and casino operators. In the UK, customer check procedures are continuously improving, and in its current state, the system is highly impenetrable. The same rings true for much of Europe and North America. However, the lackluster approach to financial scrutiny in certain jurisdictions continues to allow the practice of money laundering to sneak under the radar. The amount of money involved is truly staggering, with that comes powerful and illicitly motivated groups who are determined for their business to go uninterrupted. The battle rages on between criminals and the authorities who are often left chasing shadows.
You can find out more info about how casinos stay safe from crime and how internet gambling is regulated in this section of our guide to real money casino gambling.