Cashier cages at Ontario casinos have reported a surge in suspicious activity

The unprecedented volume of questionable monetary transactions at casinos has sparked demands for the province to enhance investigations into the origins of these suspicious funds.

Just as the US has the Bank Secrecy Act, which obligates financial institutions and cash-intensive businesses to file a suspicious activity report (SAR) when they suspect customers are attempting to evade reporting requirements through structuring, Canada also has regulations in place to combat money laundering.

Under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), businesses classified as reporting entities are required to submit a suspicious transaction report “if there are reasonable grounds to suspect that a financial transaction is related to a PCMLTFA offense.”

Despite recent law enforcement efforts in Ontario to combat suspicious financial activities, the province’s 30 casinos witnessed an increase in reported suspicious transactions last year.

The Ontario Premier remains unperturbed

Ontario Premier Doug Ford maintains a sense of reassurance despite the ongoing rise in suspicious activity reported at the province’s casinos. When questioned about this concerning trend, Ford expressed that the increased reporting indicates the effectiveness of the system.

During a recent media conference, Ford highlighted the collaborative efforts between the Ontario Lottery and Gaming Corporation (OLG) and the Ontario Provincial Police (OPP). He emphasized that whenever any suspicious activity is detected, the OLG promptly contacts the OPP, who conduct thorough investigations just like they would in any other case.

Ford further conveyed his unwavering trust in the capabilities of the OPP, stating, “I have full confidence in the OPP.”

However, not everyone shares the same level of confidence. In an interview with CTV News Toronto, two former Royal Canadian Mounted Police (RCMP) officers expressed their concerns regarding the increasing amount of suspicious activity, suggesting that the government should take more decisive action.

Cal Chrustie, a former RCMP investigator experienced in handling money laundering and transnational crime, speculated that many of these cases involving substantial sums of money likely involve illicit funds.

Peter German, a former RCMP deputy commissioner, echoed Chrustie’s sentiment, emphasizing the need for financial regulators to thoroughly scrutinize the suspicious activity and determine if further investigations are necessary.

German emphasized the importance of careful examination of the numbers, as both over-reporting and under-reporting can occur. He stressed the significance of evaluating the quality of the transactions, and called for diligent follow-up by the regulatory body responsible for overseeing the OLG.

Although investigating over $372 million in transactions presents a formidable challenge, the OLG possesses a workforce of over 15,000 employees. In addition to regulating casinos, the OLG also oversees the province’s lottery operations, iGaming, and sports betting enterprises.

Refined Procedure for Reporting

When Canadian businesses are obligated to submit suspicious transaction reports, these filings are directed to two entities: the OLG’s Anti-Money Laundering Team and FINTRAC, which stands for the Financial Transaction and Reports Analysis Center of Canada.

Upon receiving the reports, FINTRAC thoroughly examines each one and compiles a comprehensive transactional history for the individuals involved. Collaborating with the OLG, FINTRAC determines whether it is necessary to initiate further investigations into the origin of the funds.

Ontario Auditor General Bonnie Lysyk has emphasized the need for stronger measures to combat money laundering. In her 2022 evaluation of the OLG, Lysyk recommended that provincial legislators mandate casinos to verify the source of funds for cash and cash-equivalent transactions of CA$10,000 (US$7,450) or more at the point of purchase. This requirement aims to enhance scrutiny and accountability in detecting potential instances of money laundering.