On June 3, FinCEN assessed a $75 million civil money penalty against Hong Kong Entertainment (Overseas) Investments, Ltd., d/b/a Tinian Dynasty Hotel & Casino (Tinian), in the Northern Mariana Islands for willful and egregious violations of the Bank Secrecy Act (BSA), marking FinCEN’s largest ever penalty against a casino for BSA violations. In the assessment, FinCEN found that, from 2008 to the present, Tinian operated without a BSA/anti-money laundering (AML) compliance program, having implemented none of the four requisite pillars. According to FinCEN, this failure contributed, among other things, to Tinian’s willful failures to file currency transaction reports (CTRs) at the request of undercover Internal Revenue Service Criminal Investigation agents posing as Russian businessmen and to report as suspicious the undercover agents’ requests that the transactions go unreported. According to FinCEN, a casino manager also “provided detailed advice to the undercover agents posing as casino customers on how to conduct their transactions in a manner that would allow them to avoid having their transactions reported.” In announcing the assessment, FinCEN Director Jennifer Shasky Calvery remarked that Tinian’s actions “presented a real threat to the financial integrity of the region and the U.S. financial system.”
As recently as June 2014, Director Shasky Calvery discussed the AML obligations of casinos and the importance of a strong culture of compliance within the casino industry. She specifically highlighted the importance of the information casinos provide to the government via CTR and SAR filings and indicated these reports have proven to be an important source of information for the government to combat a range of offenses from drug trafficking and Ponzi schemes to terrorism-related offenses.
FinCEN’s action against Tinian follows an April 2013 criminal complaint filed by the U.S. Attorney for the Districts of Guam and the Northern Mariana Islands against Tinian, Tinian’s Casino Manager and its VIP Services Manager. Much like FinCEN’s allegations, the criminal complaint alleges Tinian engaged in a pattern of accommodating gamblers in conducting transactions involving more than $10,000 without filing CTRs. The criminal matter remains pending as a motion to dismiss for lack of jurisdiction filed by Tinian was recently denied by the U.S. District Court for the Northern Marianas Islands.
In its June 3 assessment, FinCEN did not take action against any individuals.