The Auditor General of Ontario has sent undercover agents to test safeguards against money laundering in casinos. Here is what happened

Three “mystery shoppers” – hired by the provincial auditor and given thousands of dollars in cash to try to launder casinos – have been caught in the act, the Star has learned.

The undercover officers were part of an undercover operation to test anti-money laundering measures in place at casinos in the Greater Toronto Area and Niagara Falls.

But the bet was a failure, leading to a complaint to the Ontario Provincial Police and the three officers were slapped with « trespassing orders », barring them from all 30 provincial casinos.

Auditor General Bonnie Lysyk takes a look at the Ontario Lottery and Gaming Corporation, which oversees casinos, as part of her annual « value for money » report to the Legislative Assembly on Wednesday.

In a brief interview Tuesday, Lysyk said she was unable to discuss anything related to her audit until it was dropped off at the house.

« We can’t answer anything today, » she said politely.

Earlier in the day, the star asked his office for the names of the three agents, how much they were paid and the exact amount they were given for the gambling trick.

“Take a look at the report tomorrow and then I can answer any questions you have,” said Lysyk, a legislature officer who must first publicly share her findings with lawmakers.

The independent watchdog sometimes sends people undercover for its audits of departments and Crown agencies.

No charges were laid after the Ontario Provincial Police investigated the case.

The caper has irritated those in the gaming industry, where it has become a hot topic of discussion.

“They have been clearly instructed to engage in activities consistent with money laundering,” an industry source said, speaking confidentially to discuss the matter.

Undercover agents would buy thousands of dollars in chips, gamble a little, then cash casino checks.

These casino checks could then be cashed at a bank for new bills that cannot be traced back to the original funds.

While not technically illegal, it is a violation of Ontario casino policies designed to combat money laundering.

Criminals have long used gambling as a way to launder money from ill-gotten gains.

Dirty money can be « washed » by buying and then cashing in gambling chips, disguising the proceeds of crime as winnings.

But such occurrences are rare in Canada, where casinos are heavily regulated by the government.

“This is unethical behavior,” said a second industry source, adding that monitoring and compliance officers at casinos in the Greater Toronto and Niagara Falls area had noticed the suspicious activity. for the first time in August.

Although OLG’s Tony Bitonti could not comment on the specifics of the case, he said « fighting money laundering is a top priority » for the company.

“That’s why we invest in continuous improvement in partnership with federal, state and local regulatory and enforcement agencies,” said Bitonti.

« In circumstances where a customer is deemed to be at risk of using proceeds of crime, they face restrictions and potential intrusion from Ontario’s 30 casinos, » he said. .

“Where there is an indication, including notification from law enforcement, that an individual poses a money laundering risk, the transaction is declined and law enforcement is notified.”

Bitonti noted that « when an individual violates an trespass order, they can be arrested. »

Security officials who use « eye in the sky » video cameras to search for people trying to cheat at table games, such as blackjack and roulette, spotted one of the potential players.

The player had a stack of newly purchased chips, which were immediately cashed out after a few small wagers at a gaming table.

In another case in September, the auditor’s agent apparently stuffed thousands of $20 and $50 bills into a slot machine, then cashed them out after one or two draws.

The agents thought they were cautious enough to avoid arousing the authorities’ suspicions by keeping their bets below $10,000.

« If it’s $10,000 or more, we automatically have to file an anti-money laundering report to FINTRAC, » the second industry insider said, referring to the Financial Transactions and Reports Analysis Center of the Canada.

It is the federal government unit responsible for detecting and preventing money laundering and terrorist activity financing.

A press release touting Lysyk’s report says it will review « the state corporation responsible for running casinos, charitable gaming, and Internet gaming and lotteries. »

Robert Benzie is the bureau chief at Star’s Queen’s Park and a reporter covering Ontario politics. Follow him on Twitter: @robertbenzie


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