Northern California Casino Penalized by FinCEN for Ignoring Anti-Money Laundering Laws
Wherever there is money, there is the potential for trouble. And A LOT of money circulates at casinos every day. As such, casinos are required to hyper aware of what is happening on their premises and must have procedures in place to report anything suspicious. Apparently, the 100-plus year old Artichoke Joe’s Casino in San Bruno, Calfornia, has been extremely lax in this regard for about the past decade and was recently hit with an $8 million civil money penalty by the Financial Crimes Enforcement Network (FinCEN) for “willfully” violating anti-money laundering laws.
This is not to say that the casino, its ownership, or its management actually engaged in money laundering themselves – there would be much more trouble if that was the case – but rather allowed such activities to go on in the casino. And it was worse than just being negligent; according to FinCEN, management and staff saw financial crimes being committed on the casino floor and did nothing about it.
“For years, Artichoke Joe’s turned a blind eye to loan sharking, suspicious transfers of high-value gaming chips, and flagrant criminal activity that occurred in plain sight. FinCEN’s $8 million civil penalty results from the card club’s failure to establish adequate internal controls and its willful violations of the Bank Secrecy Act,” said Jamal El-Hindi, Acting Director of FinCEN, in a press release.
“Casinos, card clubs and others in the gaming industry should consider their risk of exploitation by criminal elements, and understand that they will be held accountable if they disregard anti-money laundering and illicit finance laws,” he continued. “This significant action highlights the need for all entities, including those in the gaming industry, to build a robust culture of compliance into their policies and procedures to ensure they are not facilitating illicit activities.”
The violation of anti-money laundering laws had been going on from October 2009 through November 2017. During that time, two customers were arrested and convicted for loan sharking and other crimes in the casino; they were apprehended in a raid on Artichoke Joe’s by both state and federal law enforcement.
“AJC senior-level employees knew that loan-sharks were conducting criminal activity through the card club and using AJC gaming chips to facilitate illegal transactions,” FinCEN stated in the press release. “Nonetheless, AJC failed to file any Suspicious Activity Reports (SARs) on this activity. For example, there were several instances in which loan-sharks provided AJC chips to customers on the gaming floor within plain sight of AJC employees.”
I mean, really?
And that was just one notable instance of Artichoke Joe’s not giving a shit about the law. The casino didn’t have procedures in place to keep track of players “co-mingling” their bets, a practice which aids in disguising the source of funds, i.e. money laundering.
There were also no reporting procedures in place for prop players or staff to report suspicious activity. Basically, nothing ever got reported, whether it was loan sharking on the casino floor, players pooling big bets, or people making massive cashouts when they never exchanged money chips originally or even gambled at all.