Lax Anti-Money Laundering Control Costs Caesars Entertainment $9.5 Million

Gambling operator Caesars Entertainment Corp. suffered yet another blow as it was fined by the US government and the state of Nevada a total of $9.5 million over poor anti-money laundering monitoring at its emblematic casino Caesars Palace in Las Vegas.

According to a Tuesday statement released by the Financial Crimes Enforcement Network, an agency of the US Department of the Treasury, the above-mentioned casino acknowledged that the anti-money laundering controls at its VIP rooms were “severely deficient.” The said rooms are predominantly frequented by Chinese high rollers. The gambling company said that it had received such wealthy customers and had allowed them to play anonymously at Caesars Palace.

In addition to this, Caesars Entertainment had been particularly lax in the monitoring of international transactions at the special offices that brought those well-to-do gambling customers. FinCEN said in its Tuesday filing that the casino giant had permitted the existence of a blind spot in its anti-money laundering compliance program. Thus, it made it possible for “the most lucrative, and riskiest, financial transactions” to escape Caesars’ scrutiny.

The International Revenue Service also reviewed the anti-money laundering measures, or those being not adequate enough, to be more precise. The agency investigated a certain period in 2012 when Caesars appeared not to have filed more than a hundred reports on a number of suspicious activities within the premises of its flagship gaming property.

Commenting on the latest announcements, Jennifer Shasky Calvery, Director of FinCEN, said that the gaming company knew its patrons well enough to draw them to Caesars Palace and cater to their whims. However, it is quite apparent that the operator “allowed a blind spot” in its monitoring of anti-money laundering and related suspicious activities.

The FinCEN Director further noted that she is well aware of the fact that it is of the utmost importance to every casino company to impress its patrons, but this should not come at the cost of illicit money being introduced into the federal financial system.

Caesars Entertainment will now have to pay an $8-million fine to federal authorities for its numerous violations of the so-called Bank Secrecy Act of the US. The company also promised that periodic audits of the anti-money laundering measures it takes would be carried out by independent investigators. Caesars Entertainment would also have to inform FinCEN about mandatory improvements of its compliance program.

The company said in a statement that since the period of investigation, it has considerably improved the said program in order to comply with the Bank Secrecy Act. It also noted that it is determined to take further “effective risk-based” measures for the detection and prevention of money laundering and other related illicit activities, particularly at its VIP saloons, where customers tend to wager huge amounts of money.

Having settled to the $8-million penalty, Caesars Entertainment and FinCEN put an end to a two-year investigation over the gaming company’s operations. The operator also agreed on a $1.5-million fine imposed by the Nevada Gaming Control Board for having admitted to the allegations posed by the federal government. This second agreement will have to be approved by the Nevada Gaming Commission.

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