Noncompliance could mean hefty fines
U.S. gaming regulators are cracking down on money laundering and the global banks that may be allowing it to happen.
According to Reuters, pressure from the U.S. has resulted in “unprecedented scrutiny and collaboration” between the banking and casino industries, and led them to be more aware anonymous wire transfers and other risky transactions.
Some bank executives aren’t too happy with the new work load, or possible hefty penalties for noncompliance. “We are supposed to police that our counterparties and clients are not money laundering,” said Jaspal Bindra, CEO of Standard Chartered Plc of Asia. “And if when we are policing we have a lapse, we don’t get treated like a policeman who’s had a lapse, we are treated like a criminal.”
Adam Shapiro of Promontory Financial Group said the push for enhanced oversight amounts to “some catch-up in oversight of other institutions involved in transferring money,” including casinos. It’s been driven by high-profile cases like that of Zhenli Ye Gon, a Mexican pharmaceutical magnate who transferred around $45 million to Las Vegas Sands, mostly from accounts of Mexican currency-exchange companies. Ye Gon is now fighting extradition to Mexico, which has charged him with drug trafficking.
Kevin Rosenberg, a former federal prosecutor in Los Angeles, said banks that do business with casinos must heed the call, and casinos also must be less sanguine about the possibility of money laundering. “Banks are years ahead of casinos when it comes to anti-money laundering compliance. Now it’s the casinos’ turn to step up.”
But James Dowling of Dowling Advisory Group, a consulting firm specializing in regulatory compliance, said banks “don’t want to be casinos’ de facto regulators. I think you’ll get a lot of pushback from the banking industry if they have to do that.”
