Watchdog to review how Ontario casinos accepted suspicious cash

A provincial government watchdog will review the actions of Ontario casinos that accepted cash from a man who went to several locations, where documents say he singlehandedly deposited and withdrew more than $4 million in suspicious transactions.

The review comes after a CTV News Toronto investigation documented how Branavan Kanapathipillai’s huge cash buy-ins sparked some casino staff to write suspicious cash transactions reports and alert law enforcement — while still taking money whose source they determined was “unclear.”

“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 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.

As of 2022, casinos were subjected to new standards, including a requirement to “ascertain and reasonably corroborate a patron’s source of funds,” as a way to stop money laundering — something that can turn cash-based proceeds of crime into what appears to be regular money in bank accounts.

But in an application in a Newmarket Superior Court, officers outline the history of taking cash from Kanapathipillai, in some cases accepting it without clearly outlining where it came from.

On Dec. 19, 2016, Kanapathipillai presented $80,000 in cash at Casino Rama, the documents say.

“The cash was separated into eight bundles worth $10,000 each. Each bundle was bound with elastics and handed to the cashier in shipping envelopes. He claimed the money was presented that way when he received it from Fallsview Casino,” an officer wrote in the affidavit.

Fallsview Casino reported Kanapathipillai deposited cash and then withdrew funds from his account there, something that was “inconsistent” with his gaming activity.

In September 2022, at One Toronto Gaming, he generated $1,529,700 in large transactions and $1,348,115 in disbursements — something the report said that “he may be gaming with a third party’s source of funds.”

At Pickering Casino in July, he made 10 transactions ranging from $50,000 to $100,000, totalling $824,700. The casino noted “the source of cash was unclear, and it was atypical for an individual to possess such a large amount of cash. The report notes that unsourced cash is an indicator of possible money laundering.” More than 100 of his transactions were not related to gambling activity, the report says.

In November, Kanapathipillai presented roughly $100,000 at Fallsview Casino, which was flagged by casino staff. He said he was gambling with the proceeds of a third mortgage, but officers seized the money. He didn’t show up at a hearing about whether that seizure would be permanent.

Kanapathipillai was not charged with a crime in this case, though officers documented a two-decade history of fraud charges and convictions.

The AGCO regulates gambling locations in Ontario to ensure they carry out gambling "in the public interest." Its registrar introduced new rules in January 2022.

Despite those new rules, the volume of suspicious cash transactions reported in Ontario casinos increased to $372 million that year.