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Tinian Dynasty: $75M Penalty for Money Laundering

· 2 min read
Sophia Patel
Cybersecurity Specialist

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.