TRAFFICKERS LAUNDERING MONEY THROUGH CASINOS: U.S.

OTTAWA - Canadian drug traffickers are laundering illicit cash through
casinos and clandestinely shipping shady money to the Caribbean and
South America, says a U.S. intelligence report.

Drug proceeds are also being moved quietly into Canada and deposited
in banks, adds the stark assessment by the Drug Enforcement
Administration, which is leading the U.S. government's fight against
illegal substances.

There is growing concern among police and security officials about the
persistent efforts of drug syndicates, terrorists and other criminals
to hide the source of ill-gotten money by making large purchases or
conducting transactions with legitimate institutions.

The August DEA report, Money Laundering in Canada, says Canadian drug
traffickers intent on using casinos to launder their proceeds begin by
purchasing chips or opening an account at the gambling
establishment.

The trafficker gambles, but is careful to lose only a relatively small
sum of money, the report notes. "The trafficker, or an associate, will
then cash in the chips or withdraw the funds, which appear to be
legitimate winnings from the account."

The report, which relies on DEA intelligence, does not refer to
specific Canadian casinos.

Rusty Payne, a spokesman for the agency, said providing additional
details would compromise intelligence-gathering.

"We don't have a lot more specific information that we can put out on
that brief, other than to say we know the situation exists. We know
the methods that are being used."

The new Canadian agency responsible for collecting and analysing
reports about suspected illicit transactions from businesses that
handle large sums says some recent dealings have been flagged by casinos.

"We are getting suspicious transaction reports in from casinos, and
those are of great interest," said Peter Lamey, a spokesman for the
Financial Transactions and Reports Analysis Centre of Canada.

Lamey said it was premature to elaborate, noting a fuller picture
likely would emerge in coming months.

Ab Campion, a spokesman for the Alcohol and Gaming Commission of
Ontario, which regulates the province's nine commercial and charity
casinos, was unaware of the DEA claims. "We have a very tight system
in place at all of our casinos."

The DEA report also says "bulk drug money" is shipped into Canada for
deposit in banks.

Currency hidden in automobiles is being moved from Canada to the
Caribbean and South American countries, the report adds.

Some legitimate businesses, operating money transfer operations as
sidelines, are also being used to launder traffickers' funds, the DEA
says. "These businesses include jewelry stores, travel agencies, video
rental stores and courier services."

The report concedes Canada appears to be "steadily increasing the
emphasis" it places on combating money laundering through stronger
legislation.

The moves should enhance the ability of authorities to investigate and
prosecute groups "that were attracted to Canada early on, because of
its previously ineffective anti-money laundering laws and enforcement
effort," the DEA report says.