International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Wednesday, September 16, 2015

FinCEN Reaches $8 Million Settlement with Caesars Palace for Lax Anti-Money Laundering Controls on High Rollers

The Financial Crimes Enforcement Network (FinCEN) announced a settlement with Desert FINCEN 2
Palace, Inc. d/b/a Caesars Palace where Caesars agreed to pay an $8 million civil money penalty for its willful and repeated violations of the Bank Secrecy Act. In addition, the casino agreed to conduct periodic external audits and independent testing of its anti-money laundering compliance program, report to FinCEN on mandated improvements, adopt a rigorous training regime, and engage in a “look-back” for suspicious transactions.

 The Financial Crimes Enforcement Network (FinCEN) today announced a settlement with Desert Palace, Inc. d/b/a Caesars Palace where Caesars agreed to pay an $8 million civil money penalty for its willful and repeated violations of the Bank Secrecy Act (BSA).

In addition, the casino agreed to conduct periodic external audits and independent testing of its anti-money laundering (AML) compliance program, report to FinCEN on mandated improvements, adopt a rigorous training regime, and engage in a “look-back” for suspicious transactions. Several failures at Caesars caused systemic and severe AML compliance deficiencies.

The casino allowed a blind spot to exist in its compliance program―private gaming salons―which are reserved for Caesars’ wealthiest clientele who may gamble millions of dollars in a single visit, and which openly allowed patrons to gamble anonymously. Despite the elevated money laundering risks present in these salons, Caesars failed to impose appropriate AML scrutiny, which allowed some of the most lucrative and riskiest financial transactions to go unreported.

Caesars also marketed these salons through branch offices in the U.S. and abroad, particularly in Asia, but failed to adequately monitor transactions, such as large wire transfers, conducted through these offices for suspicious activity. These failures compromised Caesars, and exposed the casino and the U.S. financial system to illicit activity.

“Caesars knew its customers well enough to entice them to cross the world to gamble and to cater to their every need,” said FinCEN Director Jennifer Shasky Calvery. “But, when it came to watching out for illicit activity, it allowed a blind spot in its compliance program. Every business wants to impress its customers, but that cannot come at the risk of introducing illicit money into the U.S. financial system.”

Enforcement Action:  http://www.fincen.gov/news_room/ea/files/CaesarsConsent13Aug2015.pdf

https://lawprofessors.typepad.com/intfinlaw/2015/09/fincen-reaches-8-million-settlement-with-caesars-palace-for-lax-anti-money-laundering-controls-on-high-rollers.html

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