A regular patron
A casino in Los Angeles has received a $500,000 fine for money laundering failures relating to a high roller who used millions of dollars in cash to play baccarat.
On Friday, federal prosecutors stated that the Bicycle Hotel & Casino did not properly alert the Internal Revenue Service (IRS) and financial regulators about the actions of the unnamed high roller, who is a Chinese national. The size of the fine relates to the revenue that the casino made from the gambler.
the whale visited the California casino more than 100 times
Over the course of eight months in 2016, the whale visited the California casino more than 100 times. The gambler would often arrive at the property with duffle bags full of cash before embarking on long sessions of high-stakes baccarat in the property’s VIP room. During one such session, the high roller gambled with about $2m over a time period of more than ten hours.
Dealing with huge sums
According to prosecutors, the unnamed whale’s assistant would often exchange millions of dollars in cash for casino chips. During their eight-month gambling spree, the VIP cashed in and out about $100m. By law, casinos have to file a suspicious activity report and currency transaction report with the Department of the Treasury when a gambler purchases more than $10,000 worth of chips with cash in a 24-hour period.
the casino often submitted form filings under the assistant’s name
Federal prosecutors outlined how the casino often submitted form filings under the assistant’s name, in violation of the law. Bicyle Casino staff alerted senior management in July 2016 about the failure to use the high roller’s name in the filings. The casino has reached a non-prosecution agreement with the Department of Justice that will see it pay the significant fine, as well as commit to improving its anti-money laundering measures.
Johnny L. Griffin III, the attorney for the casino, said that his client admitted to making a mistake but quickly took remedial actions. He affirmed that going forward, the casino will be “ensuring that all of its compliance and reporting programs are strictly followed and updated as the laws and regulations require.”
Historic money laundering issues
Casinos across LA often capture the attention of regulators over the cleaning of illicit funds. In 2017, authorities raided the Bicycle Casino due to an investigation into possible money laundering. The IRS and Drug Enforcement Agency (DEA) took control of the casino in 1990 after authorities deemed money laundering a main reason for the building of the property.
Over the years, Normandie Casino has served as one of Bicycle Casino’s main competitors and California’s oldest game room. In 2016, the venue had its gaming license revoked and its owners had to sell the property as a result of a money-laundering investigation. Authorities looked into allegations that drug dealers had exchanged dirty money for casino chips, allowing them to cash out clean money.