KEY POINTS:
A casino is the perfect place to 'clean' ill-gotten gains - the money is swapped for chips, then gambled, won (hopefully) and the winner walks out with a casino cheque.
Casinos are widely suspected as New Zealand's prime money laundering machine, but neither police nor the Department of
Internal Affairs can list one directly related prosecution in the past five years.
A Weekend Herald investigation has found Auckland's SkyCity casino alone reports up to 35 "suspicious transactions" to police a year.
And frontline police, legal, gambling and criminal sources all describe casinos as the prime place to launder money, with a SkyCity casino staff member telling the Weekend Herald dubious transactions happen "every day". This is despite police and Internal Affairs officially only acknowledging that casinos were a "target" for money laundering when asked a fortnight ago.
The investigation has found a combined total of 477 charges of money-laundering have been brought before the courts since 2003, with just under a quarter - 110 - resulting in convictions. Asked how many of these related directly to casinos, both agencies were unable to name any.
The SkyCity staff member said money laundering was the most obvious alleged crime at the casino.
The staff member said large amounts of money - sometimes in bundles of all different denominations pulled out of plastic supermarket bags - was often changed into chips.
The laundering process is simple: the money is "cleaned" by changing it into chips, gambling it, then changing it back again. The alleged money launderer then leaves with a cheque noted as casino winnings.
The staff member said drug dealing also occurred.
The staff member - who is not named to protect their job - said the casino did not "look too hard" at money laundering. The staff member believed that, like loan sharks, cutbacks to casino staffing - especially security - meant alleged money-laundering and drug dealing would become further embedded and harder to detect. Court reports also show criminals with large amounts of cash obtained through drugs or fraud gamble at casinos.
Casinos are required by law to report suspicious financial transactions.
Alistair Ryan, SkyCity's general manager corporate, said it worked in one of the most highly regulated industries in New Zealand, it did not condone money laundering or any other illegal behaviour, and "of course SkyCity reports suspicious activity as it occurs".
The Police Financial Intelligence Unit said releasing information about prosecutions of money laundering at casinos could "compromise operations".
Asked if police could be confident that commercially-driven casinos reported all incidents of possible money-laundering, unit head Detective Sergeant Ashley Kai-Fong said police "can never know" if all crimes are reported.
Casinos are also required to notify Internal Affairs when there is "undesirable activity that could compromise the honesty or integrity of the casino". A department spokesman said SkyCity had never reported alleged money-laundering to it.
John Stansfield, of the Problem Gambling Foundation, said microchip technology could effectively track each player and their play in real time - and would be open to Internal Affairs to use as well.
"This technology is inevitable but SkyCity is playing the Telecom game and seeing how long they can get away without paying the money to introduce it."
