Financial Crime World

Title: Tinian Dynasty Hotel & Casino Faces $75 Million Penalty for Money Laundering Violations

Announcement of Penalty

The Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury, has determined to levy a penalty of $75 million against Hong Kong Entertainment (Overseas) Investments, Ltd. d/b/a Tinian Dynasty Hotel & Casino for their willful violation of the Bank Secrecy Act (BSA) and associated regulations.

Background

Located on the island of Tinian in the Northern Mariana Islands, Tinian Dynasty Hotel & Casino functioned as both a financial institution and a casino under the BSA and its regulations between 1998 and the present day. The casino offered various gaming options, including blackjack, Baccarat, roulette, and slots.

Investigation Findings

Following several reports of non-compliance, FinCEN initiated an investigation into the casino’s activities, revealing the following infractions:

  1. Failure to establish an effective Anti-Money Laundering (AML) Program

    • Lack of policies, procedures, training, and internal controls focused on AML compliance.

  2. Failure to report transactions involving currency over $10,000

    • Accommodation of large cash transactions without reporting to authorities, resulting in over $370,000 in unreported transactions during the investigation.

  3. Failure to detect and adequately report suspicious activities and transactions

    • No suspicious activity reports filed between 2009 and April 2013, despite no reportable events occurring during that timeframe.

The Importance of AML Programs and BSA Compliance for Casinos

Under the BSA, casinos are mandated to develop and implement AML programs to ensure ongoing compliance. These programs should:

  • Include policies, procedures, and internal controls designed to mitigate money laundering risks.
  • Undergo regular testing and training for personnel.

Tinian Dynasty, however, neglected these requirements, which contributed to their inability to detect and report suspicious transactions in a timely fashion.

Consequences of Non-compliance

With a failure to report suspected criminal activity and an overall disregard for the Bank Secrecy Act, Tinian Dynasty now faces a penalty of $75 million, serving as a stark reminder to uphold financial regulations for businesses in the gaming industry.