Casinos in British Columbia have become notorious. Not for offering exceptionally hot gambling action or spectacular shows, but because quite a few were identified as being involved in major money-laundering rackets, either actively or passively, over the past several years. Not only was the activity, in some instances, flowing as freely as the alcohol, but there are still reports that no one has been able to completely put a lid on it. The most successful form of casino money laundering has become referred to as the Vancouver model, named after the provinces biggest city, and nomenclature the province would prefer not to see. The U.S. has now successfully prosecuted the first two individuals in the country who used the Vancouver model for their money-laundering schemes in Las Vegas casinos.
The Vancouver model, a name first attributed to Professor John Langdale of Macquarie University in Australia, refers to a way in which criminals can take advantage of both ends of the money laundering scheme. It enables Chinese high rollers looking to move money from China to somewhere outside the country, with the enablers facilitating the activity with Chinese banks willing to bend the rules and taking a cut of the action. The lender then also takes a cut to clean the money and present it to the client.
That appears to be what Bing Han and Lei Zhang had been doing for an unspecified amount of time around Sin City. The Vancouver model was the most prevalent form of money laundering seen in Canada’s casinos, and Han and Zhang adopted it for use in the U.S. before being busted. When caught, they were arrested and charged in federal court with operating an unlicensed money transmittal business, using nothing more than a smartphone with access to a Chinese bank account in order to expedite the transfers.
The U.S. Attorney’s Office for the Southern District of California, which prosecuted the case, made a plea agreement with the two wayward entrepreneurs so everyone could avoid a long, drawn-out trial and, as a result, the pair could be sentenced to up to five years in prison. The office points out that this is most likely the first time that anyone in the U.S. has been trapped for facilitating illegal money transfers between the U.S. and China in an effort to circumvent financial regulations, with a legal cap of $50,000 placed on outbound transfers coming from China. Han and Zhang had reportedly facilitated transfers into the multimillion-dollar range.
Even some casino hosts were reportedly involved, helping to facilitate the delivery of funds in the casinos in exchange for a cut of the fee paid to the fraudsters. It isn’t clear if any particular casino employee has yet been prosecuted for alleged involvement.
