A Canadian man is accused of money laundering amounting to $4 million (US $2.9 million) at multiple Ontario casinos. According to court documents, Branavan Kanapahipillai made a series of buy-ins and withdrawals over the past few years without recording any significant gambling activity. His attempt to buy $100,000 in chips at a Niagara Fallsview casino last fall resulted in authorities’ seizure of the funds. Kanapathipillai then allegedly fled the country.
Critics say that the saga highlights flaws in recording and casino security. Suspicious transactions at retail casinos have increased since they reopened following the COVID-19 pandemic.
An Extensive History of Suspicious Transactions
Police have not yet charged Kanapathipillai with any crimes related to the transactions. However, CTV News reports that he did not show up at a Newmarket court hearing to try to reclaim the money seized by Ontario Provincial Police (OPP) in Niagara Falls.
One of the casino cashiers flagged had flagged that transaction. Kanapathipillai claimed the money was from proceeds from his third mortgage.
The OPP say they believe Kanapathipillai’s alleged money laundering is connected to a loan sharking operation. As additional evidence, police point to his possession of multiple driver’s licenses, bank accounts, and aliases, plus a history of fraud and other convictions.
A court affidavit suggests that the seized $100,000 could be just a tiny part of suspicious transactions totaling $11 million (US $8.1 million) over the past 12 years. That includes bank transactions as well as the $4 million he allegedly laundered through casinos.
Casinos owned by One Toronto Gaming (OTG) appear to have been his most frequent targets. The company documented 120 transactions with Kanapathipillai totaling over $3 million (US $2.2 million) in 2021 and 2022.
Pickering Casino – one of OTG’s properties – reported ten transactions totaling $824,000 (US $606,300). Representatives for the casino stated the source of cash was unclear and “not related to significant gaming activity,” just chip purchases and redemptions.
According to the court affidavit, most of the accused’s transactions follow a similar pattern.
System Is Vulnerable, Prompting Calls For Change
While casinos are recording suspicious transactions, proven by the rise of reported transactions, experts suggest that more needs to be done. Retired Royal Canadian Mounted Police (RCMP) money laundering specialist Garry Clement told CTV News that casinos have not acted quickly enough.
It’s a terrible thing to say, but it’s open season for individuals like this. These seem pretty obvious. There’s more to this than just gambling.
Ontario Auditor General Bonnie Lysyk has also said that casinos must improve their security against money laundering. Last year, she sent undercover agents into casinos to test the security, with mixed results. Some agents were able to leave with checks for their laundered money, while other casinos flagged the transactions. The operation drew criticism from the gambling industry and Ontario Premier Doug Ford, who said Lysyk had overstepped her authority.
The case involving Kanapathipillai also recalls a similar scenario that recently played out in British Columbia. Paul King Jin allegedly used casino chips and other methods to launder money. The case never resulted in charges, but it prompted British Columbia Premier David Eby to call for a change in legislation to fix the issue.
Suspicious Transactions Are On The Rise
The annual volume of suspicious transactions fell when casinos shut down in 2020 due to the COVID-19 pandemic. However, it has now rebounded higher than pre-pandemic levels.
Ontario casinos flagged $334 million (US $246 million) in suspicious transactions in 2019, before the pandemic. That number fell to $134 million (US $99 million) in 2020 and even further to $116 million (US $85 million) in 2021.
In 2022, with operations returning to normal, suspicious transactions shot up to $372 million (US $274 million).
New rules went into effect in 2022. These included a requirement for casino operators to confirm their patrons’ source of funds. That did not stop some, like Kanapathillai, from continuing their suspicious transactions.
Clement says Ontario needs to look at British Columbia’s situation to see the consequences of money laundering and the need to improve countermeasures. It isn’t a new problem for Ontario, however. A 2017 investigation revealed that Toronto and Niagara casinos had been used to launder $3 million (US $2.2 million) in proceeds from illegal cannabis sales.