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B.C. gaming investigators repeatedly warned bosses of ‘horrendous’ money laundering

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When former RCMP deputy commissioner Peter German brought down his Dirty Money report in June, he guessed the amount of suspicious cash laundered through B.C. casinos “exceeded $100 million” over approximately seven years.

Now, previously secret internal reports obtained by CBC News through a freedom of information request show the dollar figure is at least seven times higher: more than $700 million between 2010 and 2017.

And the co-author of the confidential reports — who was one of the province’s top gaming investigators — believes the actual figure is $1 billion.

“I crunched the numbers and added them all up,” said Joe Schalk, former senior director of investigations with the province’s Gaming Policy Enforcement Branch (GPEB). “The numbers would have exceeded $1 billion for sure in suspicious currency transactions. It was a staggering amount of money.”

Shortly after warning of a “massive escalation” of suspected dirty money flowing virtually unimpeded into B.C. casinos, Schalk and his boss were fired in late 2014.

Joe Schalk, a former director of investigations with B.C.’s Gaming Policy and Enforcement Branch, says ‘at times we were even told we should not be talking about money laundering.’ (Joe Schalk)

‘Horrendous amounts of unexplained cash’

The Gaming Policy Enforcement Branch Investigation Division reports were for the eyes of casino overseers in the province — including senior bureaucrats and the assistant deputy minister in charge of GPEB under the former B.C. Liberal government.

Schalk’s October 2013 report was an urgent call to action. 

It warned none of the anti-money laundering measures introduced by the province in 2011 — including an attempt to move away from cash to electronic transfer of funds at casinos— had “slowed the dramatic and on-going increase in suspicious cash.”

“The alarm continues to ring, even louder,” stated the report, noting “horrendous amounts of unexplained cash …continues to flood” into B.C. casinos.

It predicted the total amount of suspicious cash transactions at B.C. casinos was “coming very close to $100 million a year.”

Casino patrons arrive with thousands of dollars in unsourced cash in this security video. (B.C. Ministry of Attorney General)

B.C. Lottery Corp pushed to ease restrictions: Report

In the midst of these serious concerns, the 2013 report noted the B.C Lottery Corporation was pushing to ease restrictions on suspicious transactions, “requesting that casino cheques be issued to patrons that had entered with large amounts of currency, put their money at risk and then left the casino.”

The GPEB investigators expressed their opposition, stating BCLC’s request would pose a “huge risk.”

As for the casinos themselves, the report urged they be required to refuse suspicious cash.

“[Casinos] simply follow the BCLC guideline of ‘know your customer’ …  however never asks about or questions the origin of the money,” even though patrons brought in “up to $500,000 in cash” — often in $20 bills, the currency of street drugs, according to the 2013 report.

The report authors, Schalk and Larry Vander Graaf, executive director of GPEB, called for regulations to force casinos to do their “due diligence.”

But no such action was taken at that time by the B.C. Liberal government or the B.C. Lottery Corporation.

BCLC says it has no law enforcement or investigative powers, but took action to increase controls.

‘Massive escalation’ in 2014

A year later, the follow-up October 2014 report declared the money laundering crisis was even worse.

“The [new] numbers clearly show a massive escalation of suspicious currency entering casinos,” stated Vander Graaf.

It estimated suspicious currency transactions would exceed $185 million in 2014-2015 alone.

Former British Columbia Finance Minister Mike de Jong says ‘steps were taken’ to address the massive growth of money laundering in B.C. casinos. (Chad Hipolito/Canadian Press)

“It is my and others unchallenged opinion that … casinos have an obligation to deter money laundering and not facilitate or be wilfully blind,” wrote Vander Graaf.

He called for GPEB to be given enforcement powers, including the ability to impose penalties on non-compliant casinos. He called such powers “critical”  — but they weren’t granted to the agency at the time. 

Vander Graaf could not be reached for comment, but Schalk blames the B.C. Lottery Corporation and the B.C. government for failing to act.

“It was demoralizing. It astounded us that nobody was doing anything and appeared not to want to do anything,” said Schalk.

“At times, we were even told we should not be talking about money laundering.”

Report authors fired

On Dec. 4, 2014 —  five weeks after the October 2014 report was submitted —  both Vander Graaf and Schalk were fired from their jobs.

“I think that was an answer to us ringing the bell for so long and they weren‘t going to listen anymore,” said Schalk.

He believes BCLC bears most of the responsibility.

“I think [the reports] clearly indicate that in our opinion BCLC was wilfully blind to what was happening,” said Schalk. “They were well, well, well aware of exactly the extent and the severity of the suspicious currency that was coming in.”

‘Claims are categorically false’: B.C. Lottery Corporation

The B.C. Lottery Corporation denies the accusation.

“These claims are categorically false,” said spokesperson Lara Gerrits. “BCLC and its employees recognize the risk that money laundering poses to casinos.”

In an email to CBC News, Gerrits writes the lottery corporation repeatedly “took action” including flagging concerns to police and GPEB in numerous meetings.

The man who was the minister responsible for gaming when the GPEB reports were filed, said he’s not sure he saw them — but takes issue with the claim he didn’t act.

‘Steps were taken’: Ex-finance minister

“Could more have been done, should more have been done? I guess you can always do more,” said former Finance Minister Mike de Jong.

“There is I think a tendency on some people’s part to want to portray this as a problem that was ignored. It was not. And steps were taken.”

In 2016, one year before the B.C. Liberals lost power, de Jong held a news conference to announce the creation of a joint illegal gaming investigation team.

B.C. government officials in power during the period covered by the internal reports said they did not ignore money laundering at casinos. (B.C. Ministry of Attorney General)

The NDP announced it was cracking down on money laundering in B.C. casinos shortly after taking office in 2017.

Attorney General David Eby tightened gaming regulations following an interim report by Peter German, requiring gamblers with more than $10,000 cash to complete a “source of funds” declaration, and placed government regulators in large casinos.

The flow of suspicious currency dropped to $2.1 million in the first six months of 2018, according to the B.C. Lottery Corporation.

Even with the changes, Schalk said he’s just glad his formerly confidential reports have now been released.

“For somebody to now say, ‘look at these numbers, isn’t it horrific?’ I’d say … we should have looked at this a long time ago and been much more serious about stopping it.

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Canadian Tech Calling: Moon and Mars and Mobile Phones

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Canadian technological know-how is helping develop reliable mobile communications for next-generation space missions, including manned missions to the Moon, Mars and beyond.

With many eyes here on Earth now focused on Mars, following the successful journey of ‘Percy’, the roving space exploration vehicle more formally known as Perseverance that is now cruising the Martian landscape, the continued role of Canadian researchers and technologists in space exploration has also drawn more attention.

A team of researchers at Simon Fraser University is working to make LTE/4G and Wi-Fi communications systems on the Moon a reality, along with others in the U.S. and Canada, under the umbrella of the Artemis Program at NASA.

That project will see the return of human beings to the Moon by 2024, and then to the surface of Mars after that.

As part of those efforts, NASA selected Nokia Bell Labs to build a test network and communications infrastructure to build interoperability standards among future cellular and Wi-Fi networks, so that all types of devices can be connected and support Artemis.

The network must provide critical communication capabilities for many different data transmission applications, including command and control functions; real-time navigation and remote control of surface rovers; as well as the streaming of high definition video, applications that are all vital to long-term human presence on a lunar or planetary surface.

“It sounds like far-out stuff, building networks on the Moon, Mars and even further out in our solar system,” says Stephen Braham, the director of the PolyLAB for Advanced Collaborative Networking at SFU. “But we’re actually testing Nokia’s technology right now.”

SFU’s PolyLAB for Advanced Collaborative Networking is doing some of that work at its Exploration Wireless Communications testbed at Vancouver’s Harbour Centre, in collaboration with the Canadian Space Agency (CSA).

“(This is) what will allow us to build the ladder of technology standards needed to get cellular networks off Earth and into the solar system,” Braham said in a statement.

NASA and the CSA handed that critical testing to Braham and the scientists at PolyLAB, the Canadian component of what’s called the Exploration Wireless Communications (ExWC).

“Before space agencies can adopt these technologies, we need to prove we can operate between multiple vendors and different agencies, which is why NASA and CSA supports the ExWC testbed,” he continued.

The ExWC testbed launched back in 2018, testing high-speed wireless communications systems for space use, including 5G-forward LTE solutions and advanced Wi-Fi.

The SFU radio transmission systems, in the lab and on masts in the mountains in B.C. and the Yukon, are tested with various vendors and leading telecom providers, such including Vancouver-based Star Solutions and Sierra Wireless, another local company, as well as international telecommunications firms like Nokia.

Braham and associate professor Peter Anderson, who directs the SFU Telematics Research Laboratory that includes PolyLAB, both have extensive track records working on communication systems for NASA and the Canadian Space Agency (CSA).

It includes extensive research on very early cellular and Wi-Fi networks in the Canadian High Arctic, where advanced field communications systems were set up to support the SETI Institute and Mars Institute-lead NASA Haughton-Mars Project (HMP) up on Devon Island. 

That’s where Braham and his team tested the technology (developed in Canada) that became a big part of modern Wi-Fi, LTE, and now 5G technology, in order to meet up-front needs on human lunar missions if not all manned space flights.

From those early beginnings, the SFU team has now worked with other collaborators for the ongoing design and development of Canada’s prototype lunar/Mars surface communication networking systems, specifically the ExoMars rover, including Canadian space technology company MDA and the Canadian Communications Research Centre.

Braham is also an Associate Member on the Consultative Committee for Space Data Systems (CCSDS), supporting CSA during discussions and development of international standards for computing, networking, and communications in space. He also worked for many years as a member of the CSA’s nine-member Space Exploration Advisory Committee (SEAC), providing community leadership and representation in aspects of human space exploration in Canada.

But, when space agency officials announced recently that a Canadian will be aboard when NASA returns to the Moon in 2023, well, Braham was not named as that astronaut.

Nevertheless, with his and his team’s help, that astronaut will make Canada the second country in history to have someone travel into deep space and fly around the Moon.

And maybe use a mobile phone to call us and tell us all about it.

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Canadian Consumer Coalition Calls for Affordable Internet on National Day of Action

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Tomorrow, Tuesday, March 16, a national day of action will be staged by Canadian consumer advocates, social justice groups, telecom policy experts, digital activists, and independent ISPs, or Internet Service Providers.

In a series of scheduled virtual events, there will be calls for the federal government and telecom regulators to take action and ensure affordable Internet and wireless services are available to all Canadians.

The free online event is open to the public, and planners and scheduled participants in the Day of Action for Affordable Internet hope consumers themselves will them in urging a range of actions be taken by the federal government, the CRTC and the country’s Competition Bureau.

Advocating for a more affordable Internet will be: ACORN Canada; Brookfield Institute for Innovation + Entrepreneurship; activist and author Cory Doctorow; Canada Research Chair in Internet and E-Commerce Law Michael Geist; The Internet Society Canada Chapter; OpenMedia; Public Interest Advocacy Centre; Ryerson Leadership Lab; Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic; and TekSavvy Solutions.

And while a lack of competition has long been cited as a reason for high prices in Canada, the fact that a majority of subscribers stick with the ‘Big Three’ is also a stumbling block to leveling the playing field, at  least price-wise.

Canada’s Competitive Network Operators, a trade organization made up of Internet and telecommunications service providers that own/operate telecommunications networks across the country, is also fighting for a fair Internet pricing and accessibility structure.

Pandemic Pressures

Affordable Internet activists point out that, throughout the current COVID-19 crisis, reliable and affordable connectivity became even more essential. So did many things, in fact: many we had never deemed as so important, relevant or even as noteworthy as high speed Internet.

“The affordability and accessibility of the [I]nternet has never been more critical,” says Franca Palazzo, one of the event participants and the executive director of the Internet Society, Canada Chapter. “More than ever, we are being asked to work, learn and connect online.”

While it is true that many of our fellow Canadians are struggling to make ends meet during this pandemic, and they struggle, the coalition says, to pay some of the highest telecom bills in the world (while others can’t even get high-quality reliable connections), it is also true that many of us are using our high-speed connections more than ever with no increase in cost or decrease in service as a result of our pandemic-related stay-at-home, work-at-home or school-at-home activities.

The big three providers in Canada – Bell, Rogers and Telus – are among those companies that lifted data caps on cable and fibre-based residential Internet services; it’s a corporate goodwill gesture made as a result of pandemic and public pressures. The caps have been lifted until the end of June, where and when possible. (The Liberal government has directed the country’s largest telecom providers to cut specific cellphone prices in general.)

Not everyone is eligible for the pandemic discounts, however: some folks still using cellular (where, for example, high speed networking is not available) for their Internet connections are unable to get discounts because, the telecoms say, bandwidth and capacity would be threatened if caps were removed from cellular service.

“The digital divide in Canada is sometimes portrayed as exclusively a rural-urban divide,” says Sam Andrey, the director of policy and research at Ryerson Leadership Lab, where research and analysis into Internet usage is conducted. “But even in Canada’s largest cities, there are persistent gaps in access to digital services, devices and affordable [I]nternet at sufficient speeds that map onto other socioeconomic inequities, including income, age, race and ability,” he adds.

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Brim Financial Raises $25M Series B to transform the way people bank and shop

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TORONTO, March 16, 2021 /PRNewswire/ – Brim Financial (Brim), a Canadian next-generation Fintech company and certified credit card issuer, today announced the close of a $25M Series B, co-led by Desjardins Group and US-based EPIC Ventures with strong participation from Canadian and US based investors including goeasy Ltd., White Owl and Impression Ventures.

Brim’s state-of-the-art technology stack and credit cards infrastructure leverages the company’s ability to directly access the payment rails as an issuer, enabling Brim to deliver a fundamentally transformative ecosystem of financial products for consumers and businesses.

The Series B financing will bolster Brim’s Platform as a Service (PaaS). Brim’s B2B2C strategy enables any bank, credit union, fintech or large commercial partner to seamlessly roll out Brim’s financial products platform, credit cards and integrated buy-now pay-later solutions, mobile and digital banking, and behavior-driven customer engagement, all embedded with a best-in-class globally open loyalty and rewards ecosystem available in real-time at all merchants worldwide. With Brim’s Platform as a Service, partners have the ability to customize every element of the platform and leverage Brim’s end-to-end services, on a modular and turnkey basis.

Our technology stack powers banking, loyalty and integrated e-commerce on a single platform, with the customer experience at the center of it all” said Rasha Katabi, CEO and Founder of Brim Financial. “Today’s digital environment has brought a new sense of urgency for institutions to assess how they will interact with their customers. We are well positioned to be at the forefront of this transformation that’s shaping the way we live, connect and engage for decades to come, and we’re excited to be working with investors who share the same vision.”

Brim has expanded beyond the direct-to-consumer space enabling large partners to leverage their digital first platform, suite of credit cards and financial products, and a globally open rewards and e-commerce ecosystem. Brim seamlessly integrates buy-now pay-later capabilities in all of its revolving consumer and business credit card products, providing ultimate flexibility for customers with a uniquely and strongly differentiated ecosystem.

“We’re thrilled to be part of Brim’s next chapter. There is tremendous potential in the industry, both in Canada and in the US, and Brim is uniquely positioned to deliver a significant and much needed transformation.” said Ryan Hemingway, Managing Director at EPIC Ventures. “Brim is combining banking and commerce like we haven’t seen in North America.”

Merged with its scalable technology platform, Brim has the largest open loyalty and rewards ecosystem as Brim’s technology stack directly leverages the global payment network. Brim’s Loyalty and Rewards are live at all points of sale globally, both in physical stores and online.  Any merchant can be live and part of the ecosystem in less than 3 minutes.

“Brim’s platform delivers industry-leading payments technology to their customers at an astonishing pace,” Martin Brunelle, Vice-President, Growth, Acquisitions and Development at Desjardins Group.  “Desjardins has earmarked $100 M to invest in technology companies and investment funds who can support our different business units in their digital transformation needs.  We’re very excited to be partnering with Brim.”

With its platform built entirely from the ground up and directly on the global payment network, Brim is positioned to transform the future of the credit card industry and digital banking products with the world’s largest open loyalty and rewards ecosystem. Brim has notably on-boarded hundreds of merchants to its rewards ecosystem since its launch, and rapid expansion will continue to be a key focus for the company going forward.

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