Tag Archives: RCMP

FOR IMMEDIATE RELEASE: Vancouver Not Vegas Calls for Reinstatement of Specialized Casino Police Unit

Photo via CBC
The Vancouver Not Vegas coalition calls for Premier Clark to reinstate the Integrated Illegal Gaming Enforcement Team (IIGET), following revelations that suspicious transactions have more than doubled in casinos since 2011.

In 2009 the specialized casino police unit IIGET was disbanded weeks after it warned then Solicitor-General Rich Coleman that organized crime had infiltrated the gambling industry and was actively laundering money and loan sharking in casinos (see Appendix A).

By 2011 cash monitoring had deteriorated so severely that the BC Lottery Corporation was fined almost $700,000 by the federal agency FINTRAC for failure to control suspicious transactions at casinos.

“This is a complete systemic collapse of governance,” says Sandy Garossino, spokesperson for Vancouver Not Vegas. “There’s been no specialized policing presence in casinos for 5 years and organized crime has been brazenly active the whole time. BCLC has completely failed to control casino criminal activity.”

Vancouver Not Vegas renews its calls for former BCLC CEO Michael Graydon to be deemed unsuitable for employment with Paragon Gaming.  “Did Graydon know about this report when he jumped without warning from BCLC?” asks Garossino. “For at least 5 years Graydon knew organized crime was active in BC casinos, and completely failed to rein them in. Now he’s going to head a casino of his own?”

During the casino fight in 2011, 18 senior organized crime policing specialists submitted a letter which warned Vancouver City Council about rampant criminal activity of gangs and organized crime in casinos.
_______

Text media requests to:
Sandy Garossino 778-231-5230

See also:
Former Commander IIGET comments on casino oversight:
http://www.publiceyeonline.com/archives/004373.html
http://www.publiceyeonline.com/archives/004427.html
http://www.publiceyeonline.com/archives/004907.html

Appendix A:

Excerpted quotes from 2009 IIGET report on criminal activity in casinos (p 22):

“Canadian casinos are extremely vulnerable to money-laundering because they deal in cash and handle tens of millions of dollars every day.

Many investigations… have shown that members of organized crime use casinos for criminal purposes (e.g. loan sharking and money laundering) and that some of these criminal elements have successfully infiltrated the industry.

Since 2003 FINTRAC has sent several disclosure reports to the RCMP on suspicious transactions involving casinos… Anecdotally, police managers have suggested… nothing is being done to investigate these situations.”

(emphasis added)

Police Veterans Oppose Casino Expansion

Mayor and Council,
City of Vancouver
453 West 12th Avenue
Vancouver BC V5Y 1V4
Via E-mail

April 7, 2011

Dear Mayor and Council,

Re: Proposed Relocation and Expansion of Edgewater Casino

We, the undersigned, are members or retired members of the VPD, RCMP and other law enforcement agencies operating in BC, Canada, and internationally. We all have decades of experience in law enforcement, and many of us have particular experience or undercover expertise with organized crime, gangs, and money-laundering. Organized crime and gang activity have become deeply entrenched in the Metro Vancouver environment and represent an ongoing threat to public safety.

We urge this Council not to approve the proposed expansion and relocation of the Edgewater Casino. Casinos and racetracks are well known for their vulnerability to the activities of gangs and organized crime–money-laundering, loan-sharking, extortion, and prostitution, as well as for the vulnerability to public corruption which they engender.

That organized criminals and gang members frequent BC casinos, and easily use them to launder money, or use them as sites for the operation of loan-sharking and prostitution, is well known. Policing in casinos and racetracks requires a robust commitment to real enforcement of the law–a commitment that is plainly lacking at the present time.

Further, we are very concerned about the impact of increased gambling on our addict population, or those at risk of entering it. We note the 2009 report of the B.C. Medical Association, Stepping Forward, which found that the incidence of severe gambling addiction has more than doubled between 2002-2009, and that BC now has nearly as many severe gambling addicts as it does drug addicts. Additionally, the Centre for Addiction and Mental Health has recently released a study showing that 29,000 Ontario teens in grades 7-12 now show signs of problem gambling.

It is no coincidence that these youths are also significantly more likely than their peers to engage in gang violence, carry a handgun, and deal drugs other than cannabis. Tragically, they are also 18 times more likely than their peers to have attempted suicide in the past year.

Locating a major casino in a major regional sporting complex sends a poor message to our youth.

Addiction is a blight on society. It has a close and mutually reinforcing relationship with crime. It promotes additional offenses such as property crimes and drug-dealing, as victims seek the money to feed their habits–whatever those may be. There is no way to measure the social cost of this suffering on victims and their families, but the health, policing, criminal justice, social services and corrections systems as well as charitable service agencies all bear the brunt of the increased pressures brought about by this public problem.

Securing new sources of government funds from addicts to pay for their increased demand on government services is not wise public policy.

Without significant changes in the policing protocol, and the adoption of rigorous crime control standards for casinos such as those employed by the Ontario Provincial Police, we are in no position to deal with the increased criminal activity that will necessarily attend the development of a massive casino on the scale proposed here.

As citizens and public servants, we owe a duty of care to society’s weakest and most vulnerable, to our youth and seniors, and to the public at large. As police officers, we have seen the ravages of addiction and of gang and organized crime first-hand. The connection is closer than most members of the public may imagine.

We urge Vancouver City Council to vote against the expansion and relocation of the Edgewater Casino.

Yours truly,

Assistant Commissioner Earl Moulton – RCMP Commanding Officer Saskatchewan
(Ret’d)  Chair of Vision Quest Recovery Society (Addiction recovery services, BC)
Deputy Chief Constable Peter Ditchfield, Organized Crime Agency of BC (Ret’d)
Detective Ian Pope, Organized Crime Agency of B.C., formerly VPD, (Ret’d)
Sergeant Bob Cooper, VPD Asian Organized Crime Section, (Ret’d)
Sergeant Ivan Chu, New Westminster Police Service (Ret’d)
Superintendent GlennWoods, Officer in Charge of Behavioural Sciences, RCMP (Ret’d)
Staff Sergeant Otto Bertagnolli, RCMP Drug Section (Ret’d)
Staff Sergeant Scot Filer, RCMP Major Crime Section (Ret’d)
Staff Sergeant Peter Montague, RCMP Commercial Crime Section (Ret’d)
Corporal Howard Parks, RCMP Money Laundering Expert (Ret’d)
Corporal Chris Mathers, RCMP Money Laundering Expert (Ret’d)
Sergeant Pat Powell, RCMP Threat Assessment Expert (Ret’d)
Inspector Keith Davidson, RCMP Major Crime Section (Ret’d)
Staff Sergeant Bob Hartl, RCMP Security Engineering Expert (Ret’d)
Dr Teal Maedel, RCMP Operational Psychologist (Major Crime Section)
Staff Sergeant Robert Stenhouse, RCMP Drug Section (Ret’d)
Staff Sergeant Sid Slater, RCMP Major Crime Section (Ret’d)
Staff Sergeant Tibi Roman, RCMP Border Integrity (serving)

Edgewater mega-casino fact sheet

THE RAW FACTS ABOUT PARAGON GAMING’S PROPOSED EDGEWATER CASINO EXPANSION AT B.C. PLACE

ABOUT THE PROJECT

Connection with B.C. Place Stadium: direct link to stadium attendees, with a separated walkway directly to the casino from corporate suites.

Size of gambling space in the expanded Edgewater Casino: 2 football fields

Size of this casino compared to all casinos in western Canada: #1

Number of electronic slot machines in current Edgewater Casino: 520

Number of electronic slot machines in expanded Edgewater Casino: 1,500

Percentage of electronic slot revenues estimate to come from problem gamblers: 35%

Number of studies done in B.C. to determine the social, crime and financial costs of problem gamblers in this province: none

Cost of policing, addictions, suicides, fraud, courts related to problem gamblers using this casino: unknown

Estimated annual cost of a problem gambler from missed work, fraud, bankruptcies, receiverships, embezzlements: $13,200

ABOUT THE PROCESS

Date that B.C. Lottery Corporation chair Richard Turner buys shares in Paragon’s Alberta business: 2003

Date that Turner discloses that interest: 2005

Date that Turner resigns from BCLC board: late 2005

Date that Paragon Gaming purchases Edgewater Casino out of bankruptcy and installs Turner on the board of Paragon: summer 2006

Amount of donation by Richard Turner to B.C. Liberals while Paragon’s bid is awaiting a decision by Pavco in 2009: $50,000

Time between Pavco’s invitation to two short-listed companies responding to a request for expressions of interest in this $450-million project and its announcement of Paragon as the preferred proponent: less than 11 weeks

Normal time for big government projects to determine the best proponent, according to Partnerships B.C.: 12-16 months.

Number of minutes spent debating Edgewater’s expanded casino by Vancouver City Council: 0

ABOUT BROKEN PROMISES TO THE CITY OF VANCOUVER

Projected return of expanded Edgewater casino to City of Vancouver: $10 million in new revenue from gambling

Projected revenue to City of Vancouver from Edgewater’s original casino in 2004: $10-12-million in new revenues

Actual annual return of Edgewater Casino to City of Vancouver over the past two years: $6.3 million

Promise to arts groups and charities in 2004: increased funding
What charities got in 2010: 14% less than they got in 1995
What BC Lottery Corporation got in 2010: about three times as much revenue as 1995.

Promise to bingo players and their funding recipients in 2004: New Planet Bingo hall at Edgewater
Status of promise in 2011: Never delivered

ABOUT PARAGON GAMING

Number of slot machines in Paragon’s only Las Vegas operation, a sports bar: 15

Source of Paragon’s financing for Vancouver: unknown

Number of jobs promised by Paragon in 2010 bid for a casino in Missouri: 573

Number of jobs calculated by the Missouri Department of Economic Development for the same project: 280

Estimated annual revenue by Paragon in Missouri bid: $103.4 million

Estimated real new annual revenue calculated by the Missouri independent review of the same project: $21.7 million

Status of Paragon bids to build casinos in Sugar Creek, Missouri; Moncton, New Brunswick; Oxnard, California; and Ventura County, California: all failed

Answer of Unite Here, a union of 100,000 gaming workers across North America, to the question: “Is Paragon really the right company to take on this project?”: “no”

Disturbing event that occurred at Paragon’s Cree River Casino outside Edmonton in August 2010: customer murdered after a fight in a lounge that spilled outside.

ABOUT CRIME AND GAMBLING IN B.C.

The two best places to meet gangsters in B.C., according to Fred Pinnock, former Commander, Integrated Illegal Gambling Enforcement Team: in jails and in casinos

Hours of shifts of loan sharks at River Rock Casino revealed in Oct. 2006 murder trial of loan shark Lily Li: 24/7

Percentage increase in gambling-related crime reported by Richmond RCMP after River Rock’s establishment: 400%

Percentage of money-laundering and terrorism financing cases discovered in 2008-9 that took place in casinos, according to FINTRAC: 20%

Date that RCMP’s Integrated Illegal Gaming Enforcement Team issued a report to the provincial government warning of “extreme vulnerability” of casino industry to organized crime–money laundering, infiltration, loan sharking: January, 2009

Date that B.C.’s Integrated Illegal Gambling Enforcement Team was disbanded by the provincial government: February, 2009

Date that BC Lottery Corporation was fined $670,000 by FINTRAC for repeated failure to monitor suspicious transactions, the first fine of its kind in Canada: Summer, 2010

Number of dollars involved in suspicious cash transactions at 2 casinos in Metro Vancouver, including $460k in 20’s in plastic bags, and a suitcase with $1.2 million in casino chips, revealed by CBC in 2010: $8 million.

Reaction of Insp. Baxter, head of RCMP Proceeds of Crime Unit, to these transactions: “suspicious”

Reaction to these transactions of Rich Coleman, Minister of Public Safety and Solicitor-General, also in charge of raising revenues through gambling in B.C.: “not suspicious”

Number of sentences in Vancouver city staff’s 55-page report on the B.C. Place rezoning mentioning organized crime or money-laundering: 1

ABOUT THE ECONOMIC CASE

Amount listed in Deloitte report on this project as an annual capital payback from B.C. Lottery Corporation to Paragon: $16.9 million

Estimated increase in business over Edgewater’s current revenues: 180%

Percentage of North American casino customers who live within 45 minutes of the casino: 90%

Paragon’s estimate of the number of gamblers expected to come to Vancouver every day exclusively to gamble in the new casino and stay in its 648 new hotel rooms: 548.

Feb. 2011 comment by veteran hotel broker Angus Wilkinson on the demand for new hotels needed in the city: “This city doesn’t need another single hotel room.”

Amount that would have to be charged per night for a new hotel to survive financially in Vancouver, according to Wilkinson: $400/night

Average hotel room rate in Vancouver in 2010: $166/night

Summary of issues surrounding the Edgwater Casino expansion plan

UPDATE: here is a fuller summary of issues with the Edgewater Casino expansion (PDF with hyperlinks).

This post is for those interested in some of the more technical details surrounding the Edgewater Casino application. To read the full application, visit the City of Vancouver site.

Procedural Issues

1. No Adequate Notice to Public

The application before Council is described as a re-zoning application by PavCo (crown corporation BC Pavilion Co). Included, but not detailed in the public notice, is a second application by Edgewater Casino for a by-law amendment licensing approximately 1000 new slot machines and 75 new slot machines; Notices mailed only to residents within a 2 block radius of the project, etc.

No notice to public of scale of expansion: gaming floor equivalent to two NFL football fields (114k sq. ft)

2. Due Diligence gaps

a) Calculation of expected revenues only, no calculation of expected costs–policing, counseling, housing homeless;
b) No report on mental health and addiction issues/social ills;
c) Policing report is one paragraph long. Only one sentence respecting organized crime, money laundering. No estimate of impact or cost to manage. No weapons policy or enforcement provisions in a casino/hotel/sports complex. No reference to the RCMP report cautioning about extreme vulnerability to organized crime and infiltration.
d) Background check of Paragon Gaming–corporate profile misrepresented in public materials. No assessment of suitability to operate a major project of this scale.

3. Key Information Relevant to Public Review

PavCo represents that there is no risk to the taxpayer in the corporate structure of the project; however:

The BC Lottery Corporation Facility Development Commissions (FDC) and Accelerated Facility Development Commissions (AFDC) cover roughly 42% of casino capital development expenses.

Do FDC’s and AFDC’s extend to ancillary buildings such as hotels, restaurants, theatres, and parkades?

Projections indicate the cost of the complex will be approximately $450 million. 42% is almost $190 million in public money. The BC Lottery Corporation has budgeted for capital expenditures of $346 million over the next 3 fiscal years. What percentage of that will go into the Edgewater development?

a) Public disclosure of all financial commitments
b) Public disclosure of the deal structure: Is there an incentive to overbuild? How are expenses calculated and netted out?

4. Irregularities in the BC Lottery Corporation and PavCo Bid Process

a) BC Lottery Corporation board chair Richard Turner purchases shares in Paragon Gaming (operating in Alberta) in 2003. Share purchase violates board code of conduct, and is not disclosed until 2005.
b) In late 2005 Turner resigns from BCLC board. Summer 2006 Paragon Gaming purchases Edgewater Casino out of bankruptcy and installs Turner on the board of Paragon.
c) Fall 2008, City plan for Northeast False Creek is amended to permit major casino at request of PavCo.
d) March 2009, PavCo puts out an RFEI (Expressions of Interest), with an 18 day window. Only two respondents, including Paragon, reply. While the Paragon bid is before PavCo during the RFP phase one month later, Turner issues a $50k cheque to the BC Liberal Party. Paragon Gaming is the successful bidder
e) Autumn 2009 Turner places a phone call to Minister Kevin Krueger advising that Paragon will withdraw if the roof is not built per plans.

What were all the communications between Richard Turner and PavCo in the period 2005-2009?

5. Criminal Concerns

2006: Richmond loan shark Lily Li is murdered. Evidence emerges at trial that loan sharks operate on shifts 24/7 inside River Rock Casino;
2009, January: RCMP special unit IIGET (Integrated Illegal Gaming Enforcement Team) issues a report to government warning of “extreme vulnerability” of casino industry to organized crime–money laundering, infiltration, loan sharking. No resources to investigate suspected money laundering. Concerns expressed about perception of conflict of interest and corruption. Most information redacted from report.
2009. February: IIGET disbanded
2010/ Summer: BC Lottery Corporation fined by FINTRAC for repeated failure to monitor suspicious transactions. First fine of its kind in Canada.
2010/August-October: CBC investigates over $8 million in suspicious transactions at 2 casinos in Metro Vancouver, including $460k in 20’s in plastic bags, and a suitcase with $1.2 million in casino chips.
Insp. Baxter, head of Proceeds of Crime Unit, calls transactions suspicious. Solicitor General Rich Coleman, also responsible for gaming, disagrees that transactions are suspicious and publicly disagrees with Baxter.

Conclusion: Weak BCLC enforcement of rules of conduct and poor compliance and oversight of casinos, leaving the industry vulnerable to uncontrolled criminal conduct and potentially to infiltration.

6. Paragon Gaming: Parent Co of Edgewater

All other projects and operations are on First Nations reserves in the US and Canada. All are small market. No international tourism expertise. No expertise with the Asian market.

BC’s model: Closed door bidding process with a single (geographically pre-selected) casino applicant, and no public input.

By contrast, Missouri recently awarded a casino license in an open, public, competitive bidding process, with multiple applicants and more than one physical location. The successful bidder demonstrated both strong community support via a referendum, and strong local roots in the community. Paragon Gaming was one of the bidders in this process, but was unable to garner a single vote of support from the Missouri Gaming Commission.

US small market casino operations have notoriety, particularly vis-à-vis political corruption. In more than one instance, individuals with some connection to Paragon Gaming or their advisors have been implicated, charged, or convicted on political corruption charges. A detailed background check on Paragon Gaming is recommended, including investigation of the relationship of Paragon principles with Milton McGregor and Robert Sigler (shareholder in Paragon Gaming Missouri) of Alabama.