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LA casino fined $500,000 by DOJ for anti-money laundering failures

The Bicycle Hotel & Casino in Los Angeles County has been hit with a $500,000 fine after letting an unnamed high roller gamble upwards of $100m unchecked.

BicycleCasino

The Department of Justice (DOJ) entered into a non-prosecution agreement (NPA) with the casino after finding it in violation of the Bank Secrecy Act. They allege that the casino looked the other way while the anonymous high roller — described only as a Chinese national — spent the sum on games of baccarat.

He would reportedly turn up at the casino carrying duffle bags of cash, which he would use to play high-limit baccarat in a VIP room. During an eight-month period in 2016, the casino failed to lodge any suspicious activity reports during the gambler’s approximately 100 visits, and improperly filed currency transaction reports.

Under law, all casinos must file a currency transaction report whenever a customer purchases more than $10,000 in chips, using cash, within a 24-hour period. However, the DOJ’s investigation revealed that the Bicycle Hotel & Casino had filed them under the name of the anonymous gambler’s assistant, which is illegal.

Hotel staff alerted management to the discrepancies in late July 2016, which prompted them to correct the reports to include the high roller’s name, as well as filing regular reports questioning the suspicious nature of his funds.

Prosecutors entered into the NPA after the casino accepted responsibility and moved to strengthen its anti-money laundering measures, which saw the property landed with the fine but avoid prosecution. This is also not the first time that the Bicycle Hotel & Casino has been struck by controversy.

Going back to its very founding, a joint investigation in 1990 by the DEA and IRS discovered that the Bicycle was built, in part, with drug money.

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