The Financial Crimes Enforcement Network (FinCEN) recently slapped a $1 million civil money penalty on Sparks Nugget casino for willfully violated the anti-money laundering provisions of the Bank Secrecy Act.
Casinos are required to implement and maintain an effective AML program; to maintain records of certain transactions; and to file reports relating to transactions in currency and suspicious transactions. These reports are valuable to law enforcement investigators seeking to follow money trails in order to anticipate or solve crimes. Sparks Nugget egregiously and willfully violated AML program requirements, reporting obligations, and recordkeeping requirements, according to FinCEN.
“Sparks Nugget had a systemic breakdown in its compliance program,” FinCEN Director Jennifer Shasky Calvery said in a statement. “Despite the fact that it hosted convicted embezzlers and had been repeatedly alerted to suspicious transactions by its own BSA compliance manager, Sparks saw no need to re-think its AML defenses.”
Sparks disregarded its compliance manager by choosing not to file rightfully prepared Suspicious Activity Reports (SARs), and it instructed her to not interact with the Internal Revenue Service’s BSA auditors and prevented her from reviewing a copy of the completed exam report, FinCEN said.
Sparks Nugget also committed hundreds of record-keeping violations and failed to report several Currency Transaction Reports (CTRs) as well as SARs. The management committee that Sparks Nugget established to determine whether to file SARs never held a single meeting, and some committee members were unaware that they were even on the committee.
Furthermore, FinCEN said Sparks Nugget lacked any mechanism to document or otherwise account for decisions not to file SARs, and its day-to-day managers maintained that no suspicious activity ever transpired in the millions of dollars of transactions that occurred at the casino.
“As is typical for many modern casinos, Sparks Nugget was in an excellent position to make effective use of risk-based, information-driven compliance. Sparks Nugget harnessed its software systems and its own employees to gather large amounts of information about its customers,"” FinCEN said. “The casino used this information to improve profits, to provide more personalized customer service, and to minimize the casino’s business risk. Despite this, and despite the requirements of the BSA, Sparks Nugget willfully failed to use this same information to fulfill its AML obligations under the law.”