The provincial agency regulating gaming in Ontario has fined the owner of Fallsview Casino and Resort in Niagara Falls, Ont., for allegedly failing to minimize the risk of money laundering.
The registrar of the Alcohol and Gaming Commission of Ontario (AGCO) issued a penalty of $70,000 to MGE Niagara Entertainment Inc., which owns the casino, it said in a statement Wednesday.
The regulator says that in April, a casino patron brought in $80,000 in strapped $100 bills from a reusable grocery bag. “Surveillance showed that once the money was counted and confirmed, the patron left the table with casino chips without playing at that time.”
The AGCO alleges that although Fallsview had identified the player as “high risk,” it did not notify the regulator and on-site police as required. As well, the regulator says, Fallsview “failed to take any meaningful steps to ascertain and corroborate the patron’s source of funds” — thereby failing to follow anti-money-laundering rules.
The company said it “respectfully” disagrees with the AGCO’s decision and will be appealing it, it said in an emailed statement to media.
“As a responsible gaming operator, Fallsview Casino Resort is dedicated to identifying and preventing unlawful activities,” the statement reads.
Former RCMP officer says money laundering cases are complex
It’s not unusual to see differences of opinion around enforcement measures and due diligence in a case like this, Calvin Chrustie, a former senior RCMP officer working on transnational organized crime told CBC Hamilton.
“The complexity of the threats and threat actors are continuing to not only confuse people in the corporate risk, security and intelligence business, but, in fairness … possibly prosecutors,” he said.
“It’s really hard to come up with definitive indicators of bad actors and bad activities.”
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Chrustie, who is also a Vancouver-based senior partner with consulting firm Critical Risk Team, did not speak directly to the Fallsview case, noting he does not have direct knowledge of it.
However, he said, a situation in which someone brings $80,000 in cash into a casino raises red flags.
That said, such an occurrence doesn’t mean a casino has done something wrong or not done their due diligence, he added.
There are several considerations, he said. “But when you do see cash, it should be a big flag because, as we used to say in the world of money laundering, cash is king and it is the preferred methodology in terms of criminal networks.”
Canada has a long way to go to prevent money laundering, Chrustie says
In 2022, the Royal Canadian Mounted Police announced charges related to an investigation that began in 2017 “about a potential money laundering scheme that was operating through casinos in the GTA and Niagara regions.”
Five people were charged as a result of the investigation in 2022 after the RCMP said money was laundered from the illegal sale of cannabis. The RCMP told CBC Hamilton this week that investigation ended with those charges in 2022.
In British Columbia, where Chrustie is based, there has been a lot of attention on money laundering in recent years, including a public inquiry in 2022.
Since then, that province has made improvements to identify and curb the activity, Chrustie said, but he suspects other provinces, including Ontario, may need to up their game.
Best practices to prevent money laundering include ensuring teams are properly trained and better monitoring the geopolitical landscape, Chrustie said, adding conflicts in other countries can have ripple effects on organized crime in other parts of the world including Canada.
“Our system isn’t designed to counter it,” he said.