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    Vegas Inc: Casinos are improving their efforts to fight money laundering, Treasury official says

    June 19, 2015

    The gaming industry’s fight against criminals who want to use casinos to disguise illegal money was front and center Thursday at the Paris resort.

    There, industry leaders and government officials gathered for a conference that addressed how casinos are handling their obligations under anti-money-laundering law.

    The verdict, according to one government official: Casinos have done a better job lately of reporting suspicious financial activity, but there’s still room for improvement.

    Last year, the director of the Treasury Department’s Financial Crimes Enforcement Network — or FinCEN — spoke at this same Bank Secrecy Act conference and reminded the casino industry of how it needs to instill itself with a “culture of compliance” when it comes to money-laundering law.

    The casino industry is listening, apparently.

    Stephanie Brooker, director of FinCEN’s enforcement division, said Thursday that the number of suspicious activity reports filed by casinos last year increased 69 percent. She used that as an example of a “tremendous improvement” in casinos’ willingness to comply with the law (and not, say, an indicator of a huge uptick in casino crime).

    “Because of your reporting, we’ve seen patrons using casinos and card clubs to conceal narcotics transactions, to move money in support of international fraud, to launder real estate fraud proceeds and transfer money for other illicit purposes,” Brooker said.

    Brooker assured the audience that these reports “don’t just go into a black hole” once casinos file them. She said the suspicious activity reports — which other financial institutions such as banks also have to submit — have provided important information to law enforcement. Those reports have identified previously unknown suspects, exposed hidden financial information and helped investigators confirm the location of suspects, according to Brooker.

    Brooker also said FinCEN has changed the way it cracks down on violations of money-laundering laws, such that settlements will require an institution to admit the facts and the violation of the law rather than being able to avoid admitting fault. It’s important that violators “truly accept” responsibility for Bank Secrecy Act violations, she said.

    Though she applauded the industry’s work to keep illegal money off the casino floor — a far cry from the days when organized crime had a hand in many American gaming establishments — Brooker indicated that casinos can go even further.

    “We are seeing some meaningful improvements in this industry, but there’s more work to be done,” Brooker said. “I believe that it can be done, but it’s going to take a real and sustained commitment across all areas of your institutions.”

    Anti-money-laundering efforts are important for casinos because they’re required by law to tell the government anytime someone spends more than $10,000 on their premises. Casinos also need to file “suspicious activity reports” when they think a transaction might be linked to crime.

    The government closely monitors how well casinos comply with these laws, and it keeps track of how vulnerable they are to the threat of money laundering. A recent Treasury Department report, for example, said the gaming industry’s spread to other countries has raised new opportunities for criminals to try to move illicit funds.

    “The most significant money-laundering vulnerability at U.S. casinos is the potential for individuals to access foreign funds of questionable origin through U.S. casinos, and to use the money for gambling and other personal or entertainment expenses, and then withdraw or transfer the remaining funds either in the United States or elsewhere,” the report said.

    Failure to follow the government’s directions in this area can lead to big penalties for casino companies, as some of the Strip’s biggest players have learned. Las Vegas Sands, which runs the Venetian and Palazzo, agreed in 2013 to pay about $47 million to put a money-laundering investigation to bed. More recently, Caesars Palace revealed this year that it could face up to $20 million in fines in connection with a laundering-related investigation.

    But the industry has lately tried to meet the challenge head-on. To provide clarity on the complicated process of complying with the law in this area, the Washington, D.C.-based American Gaming Association published guidelines last year that detail best practices for casinos to combat money laundering.

    That document is a big deal for casinos, and Attorney Katrina Carroll said Thursday that she wasn’t aware of any other industry that has done the same thing.

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