CBC tests system by visiting casinos, cashing out large amounts

As part of an investigation into suspected money laundering at casinos in Ontario, CBC News discovered it isn't difficult to leave a casino with an official cheque, even after behaving in what security officials consider to be a suspicious manner.

CBC News carried out the experiment after learning the RCMP in Ontario fear criminals are using a loophole within the casino system to launder the proceeds of crime. The Mounties suspected a convicted Toronto-area drug kingpin fed cash into slot machines, cashed out and got casinos to issue a cheque for the amount. Most of the cash transactions involved amounts below the $10,000 limit. That amount is supposed to alert gaming regulators that something may be amiss.

To test the system, CBC News visited two Ontario gambling establishments — Casino Rama, outside of Orillia, Ont., on Dec. 1, 2005, and Mohawk Racetrack, west of Toronto, on March 25, 2008.

At each casino, three members of a CBC News team fed $15,000 into slot machines in full view of casino staff, patrols and overhead surveillance cameras. No one inquired as the team — one of whom was wired with a hidden camera — spent an hour pumping $20 bills into the machines.

After the machines were loaded with the money, CBC News cashed out, took the vouchers from the slot machines and asked the casino cashier for official casino cheques. For the first test, CBC was issued two separate cheques for $4,951 and $9,502 — each below the $10,000 threshold. For the second test, CBC received a single cheque for $14,640.

Staff at both casinos did ask for official identification — as required by law — before presenting a cheque each time.

Activity noticed, say officials

When informed of the CBC experiment, OLG officials said casino staff had noted the suspicious behaviour during both visits and reported it to police at the casinos.

OLG chief executive officer Kelly McDougald says the law prevents her from confirming whether the casinos had filed suspicious transaction reports to FINTRAC, the federal agency that monitors suspicious movement of money.

"If there was suspicious behaviour — feeding multiple money into a machine — then I would expect a suspicious incident report would be filed," she added.

Ontario Provincial Police Det.-Chief Supt. David Crane, who heads the enforcement arm of the province's Alcohol and Gaming Commission, confirmed OLG did "report as required" following the CBC visits. The OPP and AGCO were involved, he said, but didn't provide further details.

The activity should have triggered concern in the casinos, said Crane. "You shouldn't be able to feed in $15,000 in $100 bills, twenties or whatever. No, it's not going to happen. That should set off alarms," said Crane.

CBC News has not been contacted by any lottery staff, police or FINTRAC officials about the cash.

FINTRAC said it cannot legally disclose whether OLG filed a report about the CBC experiment.

McDougald said her staff are always on the lookout for such activity.

"All of our people within all our facilities are trained in terms of looking for suspicious behaviour, whether that's the slot attendant on the floor, the cage and coin operator or … the surveillance that's in the sky in those facilities," she said.

Fewer suspicious activity reports

Ontario casinos at one time filed hundreds of suspicious transaction reports per year, according to data from FINTRAC. In 2002-2003, Ontario casinos filed 330 such reports. That number dropped to 84 last year.

An expert on criminal behaviour says even though casino player data is subject to many protocols and reporting procedures, it isn't being heavily scrutinized.

"A major danger of the enforcement bodies that work inside the casinos is how very quickly they come to identify with the needs of the casino," said York University criminologist Margaret Beare. "And those needs very clearly become profit over enforcement."

Crane said gaming officials are in a difficult situation because high-rollers who spend tens of thousands of dollars are a daily fixture in some casinos. Some players can afford to spend $15,000 or more per visit on machines, he said, and they don't want to be accused of illegal activity.

"If you were an individual that has significant income and you enjoy playing … and the police then come to you and said … 'Come into our office please, we think maybe something isn't right,' you probably would not be very happy," he said.