The former owners of the Normandie Casino in Gardena, California are struggling after being nailed with a .4 million penalty for violating the Bank Secrecy Act when they allegedly helped high rollers avoid reporting their winnings.
They must now pay the $1.4 million, which they did not report to the feds and pay a $1 million fine.
The owners sold the casino in July to porn king Larry Flynt, who shortly thereafter rebranded it as the Lucky Lady. They were forced to do so after pleading guilty to the federal violations. They admitted to not reporting several large transactions in 2013 and to not adopting a program to prevent money laundering at the casino. This included not reporting an incident where a patron won $1 million from another patron.
Employees also protected some customers by breaking down their transactions into smaller amounts to try to avoid reporting rules.
Federal law requires casinos to collect proof of identity, social security numbers, addresses and tax ID information from customers who collect more than $10,000.
The Normandie was the oldest card club in California, having operated since the 1940s under the same ownership.
In a statement U.S. Attorney Eileen M. Decker stated, “The United States has an array of anti-money laundering statutes designed to prevent criminals from using the American financial system to launder the large sums of cash generated by illegal activity such as organized crime, drug trafficking, and human trafficking. Casinos and card rooms such as Normandie are cash-intensive businesses that are particularly attractive for use by criminals seeking to launder their ill-gotten gains, so they must be vigilant in meeting their obligations under those laws.”
Anthony J. Orlando, acting special agent in charge of the investigations for the IRS, added, “This sentence demonstrates the government’s ability to enforce the anti-money laundering laws used to ensure that certain high-rollers do not remain below the radar. In partnership with the U.S. Attorney’s Office, [the agency] will continue to protect the United States financial system through the investigation and prosecution of individuals and organizations that attempt to launder their criminally derived proceeds.”
