Update: Crackdown on Casino AML Deficiencies Continues as Caesars Entertainment Corp. becomes subject of FinCEN and DOJ Investigation

On October 21, 2013, Caesars Entertainment Corp. (“Caesars”) announced in its filing with the Securities and Exchange Commission that its subsidiary Desert Palace, Inc. (owner of Caesars Palace) was under investigation for alleged violations of the Bank Secrecy Act. A copy of the filing can be read here.

According to Caesars’ filing, on October 11, 2013, Desert Palace, Inc. received a letter from the Financial Crimes Enforcement Network (“FinCEN”) stating that the subsidiary was under investigation for alleged violations of the Bank Secrecy Act, found at 31 U.S.C. § 5311 et seq., and to determine “whether it is appropriate to assess a civil penalty and/or take additional enforcement action against Caesars Palace.” Caesars was also informed that a federal grand jury investigation regarding the alleged violation is on-going.

Like banks and money services businesses (“MSBs”), federal law defines casinos as financial institutions. See 31 U.S.C. § 5312 (X). As financial institutions, casinos are required to maintain robust anti-money laundering compliance programs designed to protect against the unique money laundering and terrorist financing risks posed by each individual casino. The basic minimum elements which must be included within any casino’s AML plan can be found at 31 C.F.R. § 1021.210. See also 31 U.S.C. § 5318(h).

Caesar’s announcement comes as FinCEN and the Department of Justice have increased their focus on the anti-money laundering policies and procedures of casinos. As we previously reported, on August 27, 2013, the U.S. Department of Justice announced that it had resolved its money laundering investigation into the Las Vegas Sands Corp. which resulted in Sands agreeing to pay $47,400,300 to the Government in order to avoid criminal prosecution. As we expressed in our previous report, we see the Sands and Caesars cases as a sign of the increased scrutiny that the casino industry will face in the near future and each should serve as a warning to casinos to ensure that their AML compliance programs are in full working order as soon as possible.

Fuerst, Ittleman, David & Joseph, PL will continue to monitor the Department of Justice and the casino industry for the latest developments. The attorneys at Fuerst Ittleman David & Joseph, PL have extensive experience in the areas of anti-money laundering compliance, administrative law, constitutional law, white collar criminal defense and litigation against the U.S. Department of Justice. You can reach an attorney by emailing us at contact@fuerstlaw.com or by calling us at 305.350.5690.

This entry was posted on Monday, October 28th, 2013 at 2:52 pm and is filed under AML-BSA, White Collar Defense.

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