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Closing submissions in B.C. money laundering inquiry include call to work together

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VANCOUVER — The commissioner of British Columbia's public inquiry into money laundering was urged to look to future efforts to combat the crime rather than point blame at how hundreds of millions of dollars in illegal cash poured into provincial casinos.

The way forward in the fight against money laundering is through continued collaboration between governments, law enforcement agencies and regulatory bodies, lawyers for the B.C. and federal governments said during closing submissions Friday at the Commission of Inquiry into Money Laundering. 

"We note that of course while the commission's mandate does include the potential to make findings of misconduct, the province submits that should not be the principal focus of the inquiry," B.C. government lawyer Jacqueline Hughes told Commissioner Austin Cullen. 

"This commission's most important work will be the recommendations it makes towards a path forward," she said.

Hughes said the provincial gaming regulator and Crown-owned B.C. Lottery Corporation held differing views about addressing illegal cash at casinos for years, but their working relationship has improved.

Steps taken by the province's Gaming Policy and Enforcement Branch and the lottery corporation since the summer of 2015 have been effective in limiting suspicious cash at casinos, she said.

"With the benefit of hindsight, of course, all stakeholders could have done things differently, but the important point is they are now aligned in their willingness to work collaboratively to address and combat money laundering," said Hughes.

Cullen, who's also a B.C. Supreme Court judge, was appointed by the provincial government in 2019 to lead the inquiry after several reports said the flow of hundreds of millions of dollars in illegal cash linked to organized crime affected the province's real estate, luxury vehicle and gaming sectors.

The inquiry's mandate includes making findings of fact on the extent, growth and methods of money laundering in B.C., and whether the acts or omissions of responsible regulatory agencies and individuals "contributed to money laundering in the province or amount to corruption," the commission's website says. 

Testimony at the inquiry concluded last month after hearing from about 200 witnesses, including former premier Christy Clark, cabinet ministers, police officers, gaming officials, financial crime experts and academics.

It heard testimony that investigators had raised concerns with gaming and government officials more than a decade ago that increasing amounts of suspicious cash was being used at Vancouver-area casinos.

Bill Smart, a lawyer for the B.C. Lottery Corp., told the inquiry on Friday that knowledge about money laundering and strategies to detect and prevent illegal activities have evolved over the years, which the inquiry should take into consideration.

"We respectfully submit to you that in assessing (the B.C. Lottery Corp.'s) anti-money laundering efforts in any given time, caution should be exercised to avoid hindsight bias, as risks and solutions always seem much more obvious in hindsight," said Smart.

He said prior to 2015, it was not uncommon for people to arrive at Vancouver-area casinos with bags filled with large amounts of cash. Those gamblers appeared willing to lose their money because they would return the next evening with more cash, he said.

"The cash may have been suspicious, but the patrons and their wealth generally were not, and there were plausible, potential legitimate sources of cash for these large amounts."

Smart said no one in government, the lottery corporation or the casino industry knowingly allowed illegal cash into the gaming venues. 

"Viewed from the lens of what we now know, everyone could and should have responded more quickly to those large cash transactions," he said.

Federal government lawyer BJ Wray said the inquiry has raised public awareness and understanding about the threats posed by money laundering.

"Undoubtedly, the commission's final report will identify lessons that all governments can learn from as well as areas for further collaboration and co-operation between governments," she said.

The commission will hear further final submissions Monday and Tuesday.

- By Dirk Meissner in Victoria

This report by The Canadian Press was first published Oct. 15, 2021.

The Canadian Press