The Financial Crimes Enforcement Network (FinCEN) fined a Northern Mariana Islands casino $75 million Wednesday “for willful and egregious violations of the Bank Secrecy Act (BSA).”
Hong Kong Entertainment (Overseas) Investments, Ltd., doing business as the Tinian Dynasty Hotel & Casino, had no anti-money laundering program.
“No member of Tinian Dynasty staff was delegated responsibility for day-to-day compliance with the BSA,” FinCEN said.
The casino also had no procedures designed to detect suspicious transactions or any system to independently test compliance.
“Further, casino personnel were not trained in BSA recordkeeping requirements or in identifying, monitoring, and reporting suspicious activity,” according to FinCEN.
The Northern Mariana Islands in the north-west Pacific Ocean are part of a territory of the United States that includes Guam.
Tinian Dynasty opened in 1998. It offers blackjack, Baccarat, roulette, poker, and slots, among other games.
During a 2013 search of the casino, law enforcement agents discovered a stack of more than 2,000 unfiled Currency Transaction Reports.
“When asked about these CTRs,” FinCEN said, “the casino’s chief auditor said that he assumed that filing them was a low priority because nobody ever noticed that they were not being filed.”
FinCEN is part of the U.S. Treasury Department. In March, it fined the Trump Taj Mahal Casino Resort $10 million for lapses in anti-money laundering, recordkeeping, and reporting requirements. That $10 million fine was the biggest levied by FinCEN against a casino until Wednesday’s action.
“Tinian Dynasty didn’t just fail to file a few reports,” FinCEN director Jennifer Shasky Calvery said. “The casino operated for years without an AML program in place.”
During a criminal investigation, undercover agents posed as customers. They told casino staff they planned to gamble large amounts of money and requested that the casino not report their transactions to the government.
FinCEN said in its civil order,
On March 4, 2013, the undercover agents exchanged chips and voucher for cash. Tinian Dynasty provided UCA-1 with $148,150 in U.S. currency and provided UCA-2 with $80,480 in U.S. currency. Tinian Dynasty did not file a CTR for either transaction.
The casino’s VIP Manager told an undercover agent posing as a representative of a Russian businessman that the Russian “could bring large amounts of currency and the casino would not file reports relating to these transactions,” FinCEN said.
A CTR is generally required when cash debit or credit totals exceed $10,000 in a business day.
FinCEN’s June 3, 2015 civil assessment order In the Matter of Hong Kong Entertainment (Overseas) Investments, Ltd. d/b/a Tinian Dynasty Hotel & Casino (Number 2015-07) is here (pdf).
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.