The Treasury Department’s Financial Crimes Enforcement Network said Tuesday that the owner of Caesars Palace casino in Las Vegas will pay an $8 million civil penalty for “willful and repeated violations” of the anti money-laundering provisions of the Bank Secrecy Act.
The casino owner — Desert Palace, Inc. — also agreed to conduct periodic external audits and independent testing of its anti-money laundering (AML) compliance program.
The casino will report to FinCEN on improvements to its compliance program, and adopt “a rigorous training regime.”
Caesars Las Vegas is a 3,960-room hotel and casino located on the strip. The casino includes 1,371 slot machines, 141 table games, a race & sports book, and private gaming salons.
“The casino allowed a blind spot to exist in its compliance program — private gaming salons — which are reserved for Caesars’ wealthiest clientele who may gamble millions of dollars in a single visit, and which openly allowed patrons to gamble anonymously,” FinCEN said.
Caesars marketed the salons through branch offices in the U.S. and overseas, particularly in Asia. But it didn’t “adequately monitor transactions, such as large wire transfers, conducted through these offices for suspicious activity.”
Despite the elevated money laundering risks present in these salons, Caesars failed to impose appropriate
AML scrutiny, which allowed some of the most lucrative and riskiest financial transactions to go unreported.
The failures compromised Caesars, FinCEN said, and exposed the casino and the U.S. financial system to illicit activity.
“Caesars knew its customers well enough to entice them to cross the world to gamble and to cater to their every need,” FinCEN director Jennifer Shasky Calvery said. “But, when it came to watching out for illicit activity, it allowed a blind spot in its compliance program.”
The blind spot “caused systemic and severe AML compliance deficiencies,” FinCEN said.
Caesars petitioned for bankruptcy in January 2015. The bankruptcy remains pending.
The casino’s agreement with FinCEN needs approval from the bankruptcy court.
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The FinCEN consent order In the Matter of: Desert Palace, Inc. d/b/a Caesars Palace, Las Vegas, Nevada dated September 8, 2015 is here (pdf).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.