One of California’s oldest and largest cardrooms, the Normandie Casino in Gardena, last week pleaded guilty to assisting money laundering by failing to report large transactions of cash to federal authorities in 2013. The casino failed to submit Currency Transaction Reports to the federal government in 2013 for some of its highest rollers.
Under the plea agreement the casino will pay $1 million in fines and forfeit another $1.4 million that it collected in 2013.
Federal law requires that casinos gather personal tax data, such as address and Social Security number from customers who cash out more than $10,000. Casino employees helped some “whales” break up their transactions into smaller bundles of less than $10,000 and also, in some cases, didn’t report their names at all.
According to court documents obtained by the Los Angeles Times, one of the Bank Secrecy Act violations included helping a single player who won in excess of $1 million over a six-week period.
The casino was also accused of assisting money laundering by not looking closer at transactions that should have set off red flags.
An attorney for the casino pointed out that the Normandie cooperated fully with investigators to help the case’s quick resolution. This allowed the casino to continue running during the investigation.
No owners or managers are being charged.
Last December the Oaks Card Club was forced to pay a $650,000 fine for similar violations by the Department of Financial Crimes Enforcement Network.
The casino dates back to the 1940s.
Three years ago the U.S. Treasury Department called out the gaming industry, warning it that it needed to clean up its monitoring of money laundering. This came following the example of Caesars Entertainment, which in 2012 paid $8 in fines to federal prosecutors over money laundering violations.
In the main U.S. casinos have followed that advice.
According to the American Gaming Association U.S. companies have “significantly” increased the money they spend on complying with federal law and fighting money laundering. Two years ago the Association prepared a white paper to assist casinos in adopting “best practices” to comply with federal law.
According to Ernst & Young partner Tom Roche, head of the firm’s Global Gaming Services: “Most regulators and officials we spoke with noted that casinos have improved the overall quality of regulatory filings pertaining to (anti-money laundering) and continue to aid law enforcement investigation efforts.”
Association CEO Geoff Freeman commented last week: “The casino industry has had some successes in the past several years,” and cited increased investment in anti-money laundering programs. He added, “Our industry had a choice. We could have said ‘leave us alone,’ but we embraced responsibility. I think we’re in a mutually agreeable place.”
The industry has increased the number of Currency Transaction Reports and Suspicious Activity Reports filed with the Treasury Department, says the association and increased how much it spends on enforcement by 74 percent.
Freeman concluded, “People continue to have misconceptions about our industry that we’ve worked hard to change. But we have become a model for FinCen’s reforms. Our industry has a good story to tell.”
