California casino fined $8m for AML violations

sino in the US state of California has been fined $8m following an investigation which revealed repeated violations of US anti-money laundering laws.

The Financial Crimes Enforcement Network (FinCEN) found that Artichoke Joe’s Casino (AJC) in San Bruno, California had wilfully violated AML laws over an eight-year period between October 2009 and November 2017.

FinCEN found that the AJC had failed to implement and maintain an effective anti-money laundering program, additionally failing to report a number of suspicious transactions during the period.

In March 2011, AJC was the subject of a raid by state and Federal law enforcement agencies which led to the indictment and conviction of two AJC customers for loan-sharking and racketeering offences.

The investigation later revealed that two senior-level casino employees knew that loan-sharks were conducting criminal activity through the card club and using AJC gaming chips to facilitate illegal transactions but effectively turned a blind eye to these instances by not filing any Suspicious Activity Reports (SARs) on this activity.

In a number of cases, loan-sharks provided AJC gaming chips to customers on the casino floor in plain sight of casino employees.

Acting Director of FinCEN, Jamal El-Hindi said in a statement that: “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 wilful violations of the Bank Secrecy Act.”

Artichoke Joe’s was also found to not have established procedures which would allow propositional players (players paid by casinos or card clubs to wager at a game) or other employees who may have observed suspicious transactions to report these activities.

El-Hindi added: “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.

“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.”