Casinos roll the dice on AML compliance and lose

By Lisa M. Goolik

 

This week's $75 million fine assessed by the Financial Crimes Enforcement Network against Tinian Dynasty Hotel & Casino in the Northern Mariana Islands for willful and “egregious” violations of the Bank Secrecy Act is the second civil money penalty assessed by the agency against a casino this year. In March, the agency fined Trump Taj Mahal Casino Resort $10 million for willful and repeated BSA violations.

 

Tinian Dynasty. According to the assessment, the casino’s failure to develop and implement an anti-money laundering program contributed to its failure to file currency transaction reports (CTRs) at the request of undercover Internal Revenue Service agents posing as Russian businessmen.

 

“Tinian Dynasty didn’t just fail to file a few reports,” said FinCEN Director Jennifer Shasky Calvery. “The casino operated for years without an AML program in place. It failed to file thousands of CTRs and its management willfully facilitated suspicious transactions and even provided helpful hints for skirting and avoiding the laws in the U.S. and overseas. Tinian Dynasty’s actions presented a real threat to the financial integrity of the region and the U.S. financial system.”

 

Undercover operation. During a criminal investigation, undercover agents, posing as casino patrons, told Tinian Dynasty’s Casino Manager and its VIP Services Manager that they planned to gamble large amounts of money and expressly requested that the casino not report their gaming transactions to the government. The VIP Manager assured the undercover agents that they could bring large amounts of currency and that the casino would not file reports related to their activity at the casino. The Casino Manager also provided the agents with detailed advice on how to conduct transactions in a manner that would allow them to avoid having their transactions reported.

 

In addition, during a search conducted at the casino, law enforcement agents discovered more than 2,000 unfiled CTRs. When asked, the casino’s Chief Auditor stated that he assumed that filing them was a low priority because nobody ever noticed that they were not being filed.

 

Trump Taj Majal. Earlier this year, Trump Taj Mahal admitted that it failed to implement and maintain an effective AML program, failed to report suspicious transactions, failed to properly file required currency transaction reports, and failed to keep appropriate records. Trump Taj Mahal had a history of prior, repeated BSA violations, dating back to 2003. Additionally, in 1998, FinCEN assessed a $477,700 civil money penalty against Trump Taj Mahal for currency transaction reporting violations.

 

When the $10 million penalty was announced, Shasky Calvery stated, "Like all casinos in this country, Trump Taj Mahal has a duty to help protect our financial system from being exploited by criminals, terrorists, and other bad actors." FinCEN's latest action indicates that the duty extends to the U.S. territories as well.

 

AML compliance. For casinos interested in learning more about anti-money laundering programs, Wolters Kluwer has released Federal Money Laundering Regulation, a complete guide to understanding and complying with all U.S. statutes, regulations, and court decisions governing money laundering activity. Written by Steven Mark Levy, a noted authority on regulatory and compliance issues, the desk reference provides in-depth analysis and guidance on:

• recordkeeping and reporting requirements;
• anti-money laundering compliance programs;
• money laundering crimes;
• asset forfeitures;
• state and international measures against money laundering; and
• terrorist financing.

For ordering information, visit wklawbusiness.com/store or call 1-800-449-6435.