Mob launders money at Ontario casinos
Loophole in rules lets drug profits filter through

HAMILTON -- Experts on criminal profiteering say Ontario's
casinos are being used by the Mob to launder profits from drugs and
other large-scale crimes.

While gamblers are enjoying fast-paced card games and noisy slot
machines, organized crime groups are circulating ``dirty money''into
the pot and taking out legitimate cheques that can then easily be
invested.

"There is evidence every organized crime group launders money this
way in Niagara,''says Antonio Nicaso, an internationally recognized
expert on organized crime. "They have already infiltrated the
casinos.''

Lee Lamothe, editor of the Report on Crime and Profiteering, a
Toronto-based newsletter, agrees casinos are being used by the
underworld.

"Casinos are hot. I don't know why casinos in Ontario would be the
only casinos in the world where it isn't happening. There really is
no way to stop it,''says Mr. Lamothe.

But Supt. Tim Killam, head of the RCMP's Proceeds of Crime Branch,
says money crimes at Ontario's casinos are only theoretical.

Says Supt. Killam: "There is the threat that casinos can be used
as a vehicle for laundering illicit proceeds. I'm not so sure it is
happening. We don't have any evidence of large-scale money
laundering through our casinos.''

John Palumbo, spokesman for Casino Niagara, says strict regulations
are in place to deter significant laundering operations. Similar to
banks, the casino demands photo identification before doing a
transaction of $1,000 or more, and requires paperwork on anything
over $10,000, he said.

"Once you go above $1,000, we have precautions in place we think
deter that type of activity. Is it totally foolproof? I don't know.
But if you don't conform to what we put in place with regards to
cash transactions we won't give you the money.''

Mr. Nicaso and Mr. Lamothe say the casino scheme is fairly simple,
requiring little sophistication and little risk. The goal is to turn
loads of small denomination bank notes into respectable cheques.

A mobster will give an accomplice $10,000 in cash from an illicit
deal. The accomplice keeps $1,000 for his services and buys casino
chips with the remaining $9,000. Later, the chips are returned to
the casino cashier and a cheque is received in return, which is then
passed along to the mobster.

The mobster can then deposit the cheque into a regular bank under
the guise of a "big win'' at the casino, without raising
suspicions.

"Do 10 of these deals a day and see the money that can be
laundered through a casino,''says Mr. Nicaso.

Making straight cash deposits into a bank without laundering it
first will not only require lots of identification and registration,
but also could prompt a "suspicious transaction''report.

Canada's money laws, although weak by comparison to other
industrialized countries, have been strengthened in recent years and
the government has promised even tighter controls.

But when money-laundering regulations were finally introduced in
1993, casinos were left out.

So while banks, trust companies and money exchange houses have to
keep records and determine the identity of account holders, casinos
have a relatively free ride.

And as the casino industry grew, that loophole burned brightly in
the greedy minds of money-laundering crooks on both sides of the
Canada-U.S. border.

The provincial government is aware of the problem, and last summer
announced plans to bring casinos into the regulated fold. But it
will be months before the process is complete.

In the meantime, there are plenty of otherwise legitimate gamblers
and tourists willing to earn a quick buck with seemingly little
risk.

And certainly there is no shortage of dirty money in the hands of
mobsters anxious to get it into a form that allows them to reap the
rewards of their considerable criminal efforts.
June 4, 1998