The ownership of Las Vegas casino Caesars Palace has agreed to pay an $8 million civil money penalty for “willful and repeated violations of the Bank Secrecy Act,” the Treasury Department’s Financial Crimes Enforcement Network announced on Monday. The casino also agreed to conduct periodic external audits and independent testing of its anti-money laundering compliance program, report on mandated improvements, adopt a rigorous training regime, and engage in a “look-back” for suspicious transactions.
According to FinCEN, Caesars “allowed a blind spot to exist in its compliance program” with private gaming salons that allowed wealthy clientele to anonymously gamble millions of dollars in a single visit. These patrons were allowed to conceal their identity and play using front money instead of their own, frustrating recordkeeping and reporting requirements.
Caesars also failed to provide adequate BSA training for its employees, resulting in fundamental misunderstandings of what transactions should be considered suspicious, FinCEN says. For example, some Caesars employees mistakenly believed that the requirement to report suspicious activity related to cash transactions only. There was also a common and erroneous belief that filing a Transaction Report relieves a casino from filing a Suspicious Activity Report.
As uncovered during an examination by the Internal Revenue Service, Caesars failed to file more than 100 SARs on questionable activities that included “team play” among unidentified guests in Caesars’ private gaming salons, suspicious transactions at branch offices, and third-party payments from unrelated individuals and businesses. Caesars also failed to consistently detect and report potential minimal gaming, a money laundering technique where a patron buys chips then cashes out after little or no play. For example, it did not file a SAR when one patron took out $35,000 in cage markers and then risked only 1 percent. The casino also failed to file SARs on patrons who structured their gaming transactions between $9,000 and $10,000.
Caesars petitioned for bankruptcy in January 2015. That bankruptcy remains pending, and the consent agreement must be approved by the bankruptcy court.