Byrne: “Significant amount of money laundering” linked to gambling Loop Cayman Islands

The content originally appeared on: Cayman Compass

During a Select Committee hearing last week, Derek Byrne, the Commissioner of Police of the Cayman Islands, made a startling revelation that “illicit proceeds of illegal gambling in the Cayman Islands are somewhere between thirty million and fifty million Cayman dollars per annum” and that “illegal gambling is an organized criminal activity by criminal enterprise” with international links.

Describing the structure of the criminal enterprise, he said that “we have people that are organizing these events,” “we have sellers,” and “people that collect.”

He then explained “how this money then moves throughout the community,” which he sees “in little corner shops, happening in barber shops” and “associated with illegal immigration.”

According to the Commissioner, the money also crosses international borders and involves “money mules” who “take money from the country, going through our airports.”

To make matters worse, the Commissioner said that the money is further disguised through money laundering, where these bad actors use illegal gambling proceeds to purchase property, vehicles, and small business investments, activities that initially seem legitimate but are procured by criminal proceeds.

Describing the challenge in dealing with these issues, the Commissioner said:

A general comment from me [is] that the current laws provide little or no deterrent and obviously the attempts by government to bring forward new legislation provide stronger deterrents to deal with all of the associated criminal activity associated with illegal gambling in the Cayman Islands.

My concern is that we do nothing and we allow people to break the rule of law in the Cayman Islands.”

Minister Kenneth Bryan took the Commissioner to task on these claims, however, and asked the Commissioner whether he would agree that the Bill to amend the Gambling Act would not change the authority that the police currently have. As Minister Bryan put it, without any amendments to the current legislation, the police could still make arrests for illegal gambling.

Explaining his views on this, the Commissioner said:

The penalty… the punishment would meet the crime, would be commensurate, would be proportionate… up to date crimes and up to date penalties for what we understand of illegal gambling now as to what was understood many many years ago. There is an evolution taking place or has taken place.

While this response did not fully answer Minister Bryan’s question, one could glean from the Commissioner’s statement that there are changes that the Commissioner might like to see beyond the fines proposed in the Bill to amend the Gambling Act.

This inference was somewhat confirmed when the Commissioner proceeded to discuss the powers of the police under the current legislation.

Concerning this, the Commissioner said:

It is correct that we have limited powers. Very limited powers in terms of what we can do. They are outdated. I think if you went back and you saw… I think it’s 1964 legislation that we were actually dealing with when we first started dealing with illegal gambling. We haven’t actually moved our legislation in line with what’s happening and with the risks that I have mentioned, in terms of money laundering, criminal enterprise, organized crime, drugs, firearms, assaults.

I don’t think it’s recognized that all of these associated crimes are connected with illegal gambling. It’s seen as a small, isolated… something that’s happening in an ecosystem in the Cayman Islands.

Keeping the Commissioner on track, Minister Bryan reminded the Commissioner that “this bill that is being presented has nothing to do with the powers,” but instead, “It has to do with the amounts of the deterrent,” i.e., the increased fines applicable to illegal gambling.

Clarifying his position, the Commissioner said: “I think they are interconnected. If there’s more powers and more of a deterrent, then there should be greater enforcement.”

However, the interconnection mentioned by the Commissioner was not the emphasis of the Bill to amend the Gambling Act, as Minister Bryan repeatedly noted.

In fact, Minister Bryan highlighted that the main focus of the Bill is the implementation of fines and penalties for illegal gambling, not an increase of powers to arrest illegal gamblers.

Speaking of arrests, though, Minister Bryan asked the Commissioner whether he could say how many arrests the Commissioner had seen over the last year with respect to numbers.

Responding, the Commissioner said: “There are very few. I can come back with numbers. I hadn’t put together, in fact, statistics in terms of numbers of arrests.”

The idea of the Commissioner coming before the Select Committee with assertions about the extent of illegal gambling and its links to drugs, firearms, extortion, and assaults but with no evidence to present to the Select Committee to support his statements tends to support the belief aired by Minister Bryan before the start of the Select Committee hearing that a proper assessment was not done in connection with the Bill to amend the Gambling Act.

Suppose the Select Committee continues to move forward without hard facts being presented. In that case, it will not only cause Minister Bryan to raise further questions, but members of the public will also query the approach being taken by the Select Committee.

This approach is, of course, relevant since the Select Committee was already under heavy public scrutiny following Minister Juliana O’Connor-Conolly’s question whether the Parliament Standing Orders had been complied with in the first place in calling the Commissioner before the Select Committee as a witness.

The other reason to be concerned about the process is that, ultimately, if any changes to the Gambling Act are not properly thought out and implemented, the changes may have unintended effects.

Such unintended consequences were inferred by Sir Alden McLaughlin when he noted that his former government had “almost the same exact proposals.”

Regarding this, he said:

We took a policy decision that we would not proceed with them because we felt that the only real consequence was going to be the persecution of our people, particularly our older people who like to buy a number.

If Sir Alden McLaughlin is correct, then it is even more important for the Select Committee to get the process right and have its conclusions supported by proper evidence.

Otherwise, the sorts of people that Sir Alden McLaughlin mentioned may become inadvertent targets of heightened police enforcement, not just for illegal gambling as an isolated offence but for suspicion of money laundering linked to the proceeds of illegal gambling.