The Financial Crimes Enforcement Network this week fined Hong Kong Entertainment (Overseas) Investments, doing business as Tinian Dynasty Hotel & Casino, $75 million for “willful and egregious” violations of the Bank Secrecy Act.
According to FinCEN, Tinian Dynasty failed to develop and implement policies and procedures designed to ensure anti-money laundering (AML) compliance, or to detect suspicious transactions. It also never conducted an independent test of its systems to ensure compliance. Further, casino personnel were not trained in BSA recordkeeping requirements or in identifying, monitoring, and reporting suspicious activity.
Tinian Dynasty accommodated patrons who desired to conduct financial transactions with large amounts of cash without the casino reporting the transactions. During a criminal investigation, undercover agents, posing as customers, told casino staff that they planned to gamble large amounts of money and requested that the casino not report their transactions to the government, FinCEN stated.
In another interaction, the casino’s VIP manager assured an undercover agent posing as a representative of a Russian businessman that his client could bring large amounts of currency, and the casino would not file reports relating to these transactions. Instead of reporting the transactions as suspicious, Tinian Dynasty accommodated these requests. In some instances, casino employees provided detailed instructions on how these patrons could conduct transactions without being reported or attracting law enforcement scrutiny.
Tinian Dynasty also willfully violated the requirement to file other currency transaction reports (CTRs) and suspicious activity reports. During the undercover investigation, agents conducted several currency transactions well above the CTR threshold, yet the casino failed to file required reports.
During a 2013 search of Tinian Dynasty, law enforcement agents discovered a stack of more than 2,000 unfiled CTRs. When asked about these CTRs, the casino’s chief auditor said that he assumed that filing them was a low priority because nobody ever noticed that they were not being filed.