Two Las Vegas casinos agreed to pay penalties of nearly $7.5 million as part of separate non-prosecution agreements with the Department of Justice addressing violations of the Bank Secrecy Act (BSA) over alleged anti-money laundering (AML) compliance failings.
The MGM Grand agreed to pay a fine of more than $6.5 million, while its former President Scott Sibella pleaded guilty to federal charges of violating the BSA, the U.S. Attorney’s Office for the Central District of California announced in a press release Thursday.
The Cosmopolitan of Las Vegas, which is operated by MGM, agreed to pay nearly $1 million in fines.
Both casinos will forfeit $500,000 in illicit proceeds counted toward their fines, undergo external review, and enhance their AML compliance programs as part of their respective settlements.
The details: From at least August 2017 until February 2019, Sibella served as president of MGM Grand and knew casino patron Wayne Nix was running and operating an illegal bookmaking business, Sibella’s plea agreement stated.
Sibella failed to report Nix to MGM compliance personnel or file suspicious activity reports (SARs). He authorized Nix to receive complimentary benefits at the casino, including meals, room, board, and golf trips with senior executives and other high net-worth customers.
In 2022, Sibella admitted he believed Nix was involved in illegal gambling but “‘didn’t want to know because of my position.’”
Sibella pleaded guilty to one count of failure to file SARs required by casinos. He faces a maximum penalty of five years in prison, a $250,000 fine, and is scheduled to be sentenced May 8.
Nix pleaded guilty in April 2022 to one count each of conspiracy to operate an illegal gambling business and subscribing to a false tax return. He is scheduled to be sentenced March 6.
Compliance considerations: Both casinos agreed to enter into non-prosecution agreements that require them to enhance their joint compliance program. Remedial requirements include:
- Implementing additional review and reporting requirements to ensure future BSA compliance;
- Spending at least $750,000 over two years on an external compliance reviewer, who will report to the U.S. Attorney’s Office;
- Amending internal audit protocols; and
- Reviewing certain prior SARs, related customer files, and transactions.
MGM Grand accepted responsibility for failures by the casinos’ compliance department to use all available information when performing know your customer reviews of Nix.
The casinos admitted a combined total of more than $5 million in illicit proceeds was accepted at their establishments.
Vici Properties, the owner of MGM Grand, did not respond to a request for comment. Blackstone Group, which owns the real estate at Cosmopolitan, declined comment.