The Mounties, facing damning allegations in British Columbia’s Cullen Commission of failing to investigate massive Chinese money laundering into government casinos, launched a project called “Neutralize” according to documents obtained by The Bureau.

But instead of neutralizing money laundering, the project’s objective was to negate damaging findings against Canada’s federal police, RCMP records say.

The Bureau’s review of “Project Neutralize” records comes amid Ottawa’s recent admission that despite the Cullen Commission — which made recommendations in June 2022 to address damage caused by many billions of narco-dollars laundered into B.C.‘s real estate and casinos — Canada’s dirty money issues are only increasing.

Of the Commission’s 101 recommendations, B.C. Premier David Eby’s government has reportedly only acted on three.

Furthermore, Eby’s government hasn’t implemented the highest priority recommendation that Commissioner Austin Cullen felt was the “only way” to turn the tide against British Columbia’s dirty money crisis.

“Commissioner Cullen believes the only way to reverse the state of affairs is to vest with one office the responsibility to support, oversee, and monitor the provincial response to money laundering,” RCMP’s “Neutralize” documents say.

“Cullen recommended the establishment of a Provincial AML Commissioner. The [Anti-Money Laundering] Commissioner will be an independent office of the Legislature that will provide strategic oversight of the provincial response to money laundering.”

The recommendation for an independent AML office not beholden to political leadership apparently addresses concerns that Canadian governments may ignore transnational money laundering because it seems to pump up domestic economies.

The stakes of Canadian inaction on Cullen Commission findings extend far beyond Vancouver, B.C., which along with Toronto, Ontario, is an epicentre of Chinese underground banking networks in North America that intertwine with Mexican cartels and Iranian criminal financiers.

A growing field of experts argue failed political leadership is the reason Canada’s law enforcement agencies are allowing money laundering, which ultimately undermines the nation’s security and standing with allies that are now facing serious harms from transnational drug trafficking gangs that use Canadian infrastructure for production, shipping, financing and money cleaning.

“Either we sensibly combat financial crime with robust consequences for illicit activity or we slide into failed nation status. It boils down to political leadership,” Kim Manchester, a Toronto-based financial compliance consultant, wrote in response to recent reporting. “At present, money laundering forms a fundamental component of the Canadian economy. If we don’t act, we will permanently lose the confidence of our NATO and Five Eyes allies.”

While the provincial Cullen Commission had a broad mandate to investigate and suggest remedies Canada’s government was ready with legal arguments to neutralize any serious misconduct findings, RCMP documents suggest.

“The Department of Justice submitted a reply submission to the Cullen Commission which consisted of significant input from the RCMP and Public Safety,” the documents say. “DOJ asserted numerous facts refuting the allegations and reminded the Commission that they were a provincial inquiry and as such, it did not have constitutional jurisdiction to make such findings.”

Although Cullen found no evidence of corruption among Canadian officials, casino managers and regulators, he said the federal government had no real understanding or response to money laundering.

“Overall, the Commissioner noted a lack of strategic vision at the federal level. No comprehensive economic crime strategy, no real understanding of the Money Laundering threats facing the country,”Project Neutralize documents say, “and no meaningful evaluation of the effectiveness of the anti-money laundering measures put in place by the federal government.”

However, in contrast to Cullen’s finding that no corruption had enabled it, the sheer scale of Chinese transnational money laundering revealed in B.C.‘s two-year inquiry seems to undercut the Commissioner’s finding on that crucial point.

One particular set of data from the Commission’s final report illustrates how integral Chinese underground banks were to B.C. casino operations, and how easily gangsters accessed government-regulated financial sites.

“In 2014 alone, British Columbia casinos accepted nearly $1.2 Billion in cash transactions of $10,000 or more, including 1,881 individual cash-buy ins of $100,000 or more,” Cullen’s report says.

That means that in 2014, almost 2,000 times, a gambler was allowed to walk into a B.C. government casino carrying at least $100,000 in cash, and buy casino chips. In almost all cases these were gamblers that traveled from China or gangsters that facilitated them.

“In addition to the extraordinary amounts, the cash used in many of these transactions exhibited well-known characteristics of cash derived from crime,” Cullen’s June 2022 report adds.

“It often consisted predominantly of $20 bills, oriented in a non-uniform fashion, bundled in ‘bricks’ of specific values, bound with elastic bands, and carried in shopping bags, knapsacks, suitcases, gym bags, cardboard boxes, and all manner of other receptacles. The vast quantities of cash were frequently delivered to casinos patrons at or near casinos, very late at night or early in the morning, by unmarked luxury vehicles.”

In “General Comments” Project Neutralize documents note that Commissioner Cullen discounted testimony from a former RCMP officer that alleged his superiors and B.C. officials turned a blind eye to casino money laundering.

“Commissioner Cullen found the testimony of retired S/Sgt Fred Pinnock pertaining to senior RCMP members was not credible,” the RCMP documents say. “[In response] Fred Pinnock criticized the Commission and said there should be a criminal investigation (of elected officials).”

Meanwhile, documents explain that Project Neutralize processed 51,000 records — constituting 611,058 pages of evidence — relevant to the Cullen Commission’s mandate, which included finding whether “acts or omissions of responsible regulatory agencies and individuals have contributed to money laundering in the Province or amount to corruption.”

The Bureau has learned Canada’s government in fact does have police documents that identify serious corruption involving Chinese transnational crime in B.C. that should have been relevant to the Cullen Commission, according to a general description of a specific intelligence record from a federal source that asked not to be identified due to sensitivity of the matter.

The source specified this document from B.C.’s anti-illegal gaming unit (JIGIT) is dated April 16, 2019, and was provided for B.C.’s then Attorney General, David Eby.

The sensitive report is classified “Protected B” the federal source said. The classification means if some of JIGIT’s intelligence became public it could cause “serious injury to an individual, organization or government.”

The Bureau’s legal efforts to obtain a redacted version or some official response regarding this alleged April 2019 document from the RCMP and British Columbia’s government have so far been unsuccessful.

Meanwhile, the RCMP’s “Project Neutralize” review notes JIGIT, the illegal gaming unit, did not agree with Commissioner Cullen’s choice to believe controversial testimony from some B.C. government casino officials.

“Unfortunately, Commissioner Cullen failed to mention the testimony of then S/Sgt Joel Hussey of JIGIT that law enforcement needs to investigate money laundering at casinos outside of casinos as that is where the predicate offence occurs,” RCMP documents say. “Disappointingly, Commissioner Cullen further notes that ‘Based on the evidence of multiple senior BCLC corporate security and compliance staff from the time, the source of this reluctance was, in large part, that law enforcement had not confirmed to BCLC a link between suspicious cash and criminal activity.’”

sam@thebureau.news