Los Angeles casino fined $500k for AML failures

The US Department of Justice has settled a $500,000 non-prosecution agreement with the Bicycle Hotel & Casino.

US.- The Bicycle Hotel & Casino in Los Angeles County will pay $500,000 after letting high roller gamble upwards of $100m unchecked. 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.

The DOJ said the casino had admitted to having failed to file reports for an anonymous Chinese patron who spent millions at the property during an eight-month period in 2016. It was thus found in breach of compliance procedures relating to federal AML rules.

The case pertained to a Chinese national who gambled at the casino over 100 times in 2016, spending millions. He played high-limit baccarat in the property’s VIP room and transported the money to and from the casino in duffel bags.

According to the 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 and to file 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.

Under the terms of the agreement, the Bicycle agreed to pay the United States $500,000, which represents the revenue the Bicycle made from the high roller. The Bicycle must also implement additional review and reporting requirements to assure BSA compliance, including an audit by a third party and regular reporting to the US Attorney’s Office. 

The agreement also requires the Bicycle to cooperate with law enforcement in any additional investigations or proceedings arising from the conduct described in the agreement’s statement of facts. Criminal investigators with the California Department of Justice’s Bureau of Gambling Control, IRS Criminal Investigation, and Homeland Security Investigations investigated the matter.