Money laundering facilitates terrorist activities, public corruption, tax avoidance and a whole raft of social ills. It enables organized crime and drug dealing and is a method through which bad people can conceal the proceeds of crime. When people think of the great money laundering centers of the world, they probably think of certain offshore islands or countries outside of the United States. I would argue that the unquestionable leader for the title of money laundering capital of the world is the city of Hawaiian Gardens, California.
The city of Hawaiian Gardens has a population of 14,450 and has been, since 1997, the home to the Hawaiian Gardens Casino, now known as Gardens Casino. The Gardens is the second-largest card club in the state and relies on Los Angeles as its feeder market. It is somewhat difficult to separate the city of Hawaiian Gardens from its casino in that the city government generates approximately 80 percent of its revenue from payments from the casino. Think about that—the city of Hawaiian Gardens generates over 80 percent of its revenue from this one casino. It is this reality that appears to have made the Gardens Casino not only too big to fail, but apparently too big to jail.
While the city has a wonderful mission statement, what it does not seem to acknowledge on its website is its main funding source has paid a total of $5.95 million for violating laws directed at stopping money laundering and the financing of terrorist activities. In per capita terms, this means these fines equal $412 for every person living in the city. I dare you to find a city or country that has a higher per capita money laundering monetization—therein earning the honor of being the Money Laundering Capital of the World.
If one likes to read legal documents, I would suggest they check out the Financial Crimes Enforcement Network’s (FinCEN) website and read about Hawaiian Gardens. The reader will be immediately aware that Hawaiian Gardens would be a perfect candidate as the poster child for a firm possessing absolute disdain for any effort to stop the laundering of money within its four walls, year after year after year.
According to FinCEN, the activities at Hawaiian Gardens were first identified as starting in 2011, and it went on and on from there. Moreover, not only did the feds think Hawaiian Gardens Casino was way over the line in attempting to qualify as a casebook study of what not to do, the card room doubled down with the state of California. Apparently, this casino had such a total lack of respect for the state’s regulators that it thought it could conceal their money laundering reality from them and so decided not to mention their issues with the feds to the state regulators. This act of deception resulted in an additional payment being demanded by the state of $3.15 million on top of a payment to FinCEN of $2.8 million. It appears Gardens Casino understands it is too big to fail and too big to jail.
The card room industry also was not silent on this issue for the president of the California Gaming Association, Kyle Kirkland, noted to the press this was all old news happening several years ago and besides, there was no evidence of actual money laundering. Maybe Mr. Kirkland can explain at the next FinCEN annual conference how there was no actual money laundering when the complaint dealt at length with the large number of Suspicious Activity Reports (SARs) that were not filed or completed. Apparently, ignorance is bliss, and Mr. Kirkland seems to be suggesting that maybe the card rooms should resort to keeping their records on flash paper, as the mob did with its old bookie joints. Then no one could conclude money laundering took place. What you don’t know can’t hurt you appears to be Mr. Kirkland’s model.
One must appreciate that Mr. Kirkland has a tough job, for there have been numerous raids on California card rooms by federal agents involving Homeland Security, Treasury, the FBI, FinCEN and the like, and it is hard to try and constantly downplay something that facilitates terrorist activities, criminal enterprises, tax evasion, political corruption, hiding the proceeds of criminal activity, and organized crime. But spin he must, and after all, while possibly financing terrorist activities, government corruption, drug gangs, and the like, it is all okay, for he will quickly tell you, it is really all about the jobs.
In March 2011, I was in the governor’s office in Sacramento interviewing for a position on the California Gambling Control Commission. The interview took place right after it was announced more than 160 agents had raided two California card rooms. There were some fascinating details about these raids, including that the feds did not alert local law enforcement they were raiding a business in their backyard. Imagine that. Why would the feds want to keep such a thing secret from local law enforcement? Since that time the feds have been involved in raid after raid after raid after raid of California card rooms and Kyle Kirkland continues to make his meaningless statements, and the beat goes on. The politicians, who fight to get on the legislative gambling committees so they may secure contributions, do nothing, and all of the enablers suggest it is all about jobs.
A terribly important concept to assist in understanding the criminal world is “follow the money.” In order to eliminate political corruption, organized crime, the financing of terrorism, drug dealing, and the like, there must be an honest effort to curtail opportunities to launder money. It appears many California card rooms, many of the municipal governments in the state, many of the state’s law enforcement entities, and many of the state’s politicians could care less, for the beat goes on with raid after raid after raid and yet nothing changes. I guess that system of too big to fail, too big to jail is working for them. After all, it is all about the jobs.