AGCO AML Unit to launch investigation into casino operators over ‘suspicious’ transactions

Operators will be reviewed on their obligations under the Registrar’s Standards

The Alcohol and Gaming Commission of Ontario (AGCO) is preparing to conduct a review into several casino operators to determine whether they breached the Registrar’s Standards.

The investigation is the consequence of a case built up since 2016 and involves alleged money launderer Branavan Kanapathipillai, who has been accused of depositing and withdrawing more than $4m in ‘suspicious’ transactions across a six-year period.

As revealed in an affidavit tied to an OPP investigation, and reported by CTV News Toronto, one casino accepted $824,700 in cash from Kanapathipillai in July 2022, despite staff writing suspicious cash transaction reports and alerting the authorities.

Kanapathipillai was reported on a number of other occasions, which gambling officials in Ontario say is a sign that the system put in place to monitor suspicious cash transactions is working and enabling law enforcement to follow the money.

A spokesperson for the AGCO said: “We can confirm that this matter was the result of an investigation conducted by the OPP Investigation and Enforcement Bureau embedded within the Alcohol and Gaming Commission of Ontario (AGCO).

“The presence of an embedded police bureau that specializes in money laundering and related investigations is unique to Ontario, compared to other jurisdictions. The IEB works closely with the OLG’s Anti-Money Laundering Team to ensure casino reporting is monitored and information about suspected money laundering is identified and investigated.”

The AGCO’s Registrar introduced new standards for casinos in January 2022, including a requirement to “ascertain and reasonably corroborate a patron’s source of funds,” as a way to stop money laundering.

But the volume of suspicious cash transactions reported in Ontario casinos increased to $372m last year – $38m higher than pre-pandemic levels.

“With the police investigation now complete, the Alcohol and Gaming Commission of Ontario’s Anti-Money Laundering Unit will be initiating a compliance review to assess whether casino operators met their regulatory obligations under the Registrar’s Standards,” the AGCO said in a further statement.

The review will include consideration of rules requiring casino operators to implement measures to identify and prevent suspected money laundering, including source of funds checks.

One of the most recent investigations into operators in the province led to the AGCO issuing fines to LeoVegas Gaming ($25,000), Bunchberry ($15,000), and Mobile Incorporated ($30,000) for breaching the Registrar’s Standards.

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