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Financial Crime Case Studies in Northern Mariana Islands: Casino Fined $75 Million for Egregious BSA Violations

A major casino in the Northern Mariana Islands has been slapped with a $75 million fine for willful and egregious violations of the Bank Secrecy Act (BSA).

Lack of Compliance

According to FinCEN, Hong Kong Entertainment (Overseas) Investments, Ltd., d/b/a Tinian Dynasty Hotel & Casino, failed to develop and implement an anti-money laundering program, leaving its operations vulnerable to financial crime.

  • The casino did not designate a staff member responsible for day-to-day BSA compliance.
  • No policies or procedures were in place to ensure AML compliance.
  • No independent tests were conducted to verify system compliance.
  • Casino personnel were not trained on BSA recordkeeping requirements or identifying suspicious activity.

Investigation Findings

FinCEN Director Jennifer Shasky Calvery expressed outrage over the casino’s actions, stating:

“Tinian Dynasty didn’t just fail to file a few reports… The casino operated for years without an AML program in place. It failed to file thousands of CTRs and its management willfully facilitated suspicious transactions and even provided helpful hints for skirting and avoiding the laws in the U.S. and overseas.”

The investigation revealed that Tinian Dynasty accommodated patrons who sought to conduct financial transactions with large amounts of cash without reporting them to the government.

  • Undercover agents, posing as customers, requested that the casino not report their transactions, only to be told by casino staff that it would comply with these requests.
  • Casino employees provided detailed instructions on how patrons could avoid being reported or attracting law enforcement scrutiny.
  • The casino willfully violated requirements to file other currency transaction reports and suspicious activity reports.

Investigation Results

The investigation uncovered a stack of over 2,000 unfiled CTRs during a search of the casino in 2013. When questioned about these missing reports, the casino’s Chief Auditor claimed that filing them was a low priority because no one had ever noticed they were not being filed.

Commendations

FinCEN Director Shasky Calvery praised the Internal Revenue Service-Criminal Investigation Division and the United States Attorney’s Office for the Districts of Guam and the Northern Mariana Islands for their contributions to the investigation, highlighting the strong partnership between FinCEN and these agencies.