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Financial Crimes Enforcement Network Investigators Allege
Evidence of Growing Trend in Casino Money Laundering
 

By John L. Smith, Las Vegas Review-JournalMcClatchy-Tribune Regional News

Oct. 4, 2009--The one-page advisory barely blipped on the media radar screen when it surfaced back in July.

But when the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury essentially puts the casino industry on notice over incidents of possible money laundering structuring, it's a safe bet it sent regulators scrambling.

The gambling industry is large and diverse and operates at varying levels of corporate and regulatory sophistication, but what FinCEN's investigators gathered gave pause to those who take casino money laundering seriously.

Although the location of the casinos wasn't disclosed, the incidents illustrated what some federal officials fear is a growing trend.

"Recent accounts from law enforcement and regulatory authorities allege that certain casino patrons may have conspired with casino personnel to structure transactions to evade (Bank Secrecy Act) reporting and/or recordkeeping requirements," the July 1 advisory states.

It cited these examples:

-- "A premium player induces casino personnel to allow breaking up of a transaction into multiple transactions so as to fall below the $10,000 BSA currency transaction reporting threshold.

-- "A patron persuades casino personnel to alter or omit transaction information (e.g., player rating record) or identification information on casino records.

-- "A player with chips amounting to more than $10,000 is told by a cage cashier that reducing the amount of chip redemption to $10,000 or below will avoid currency transaction reporting, and the player redeems less than $10,000.

-- "A patron obtains assistance from a pit boss to allow the patron to intentionally coordinate buy-ins with the time of day when the casino's business or gaming day is concluded, in order to split cash transactions among different gaming days."

The FinCEN advisory might have gone unnoticed in some segments of Southern Nevada society, but it has caught the attention of Paul Camacho, the IRS special agent in charge of the Las Vegas field office.

Camacho declined to disclose whether his agents are investigating a local connection to the FinCEN advisory.

"I certainly don't want to paint a picture that I've got my eye on folks and am going after them," he said, adding quickly, "I will tell you that (advisory) puts me on notice to reach out to the casinos and ensure the compliance is there. ... I think it's important that I make an effort to explain to the casinos, 'This is what we expect.'"

Outreach should be simple. After all, casino corporations have compliance committees and attorneys and accountants who specialize in compliance issues. They employ former local, state, and federal law enforcement officers who are on the payroll in large part to ensure compliance with things such as money laundering laws. Nevada devotes the Gaming Control Board to regulating compliance issues.

You would think that would leave little room for the practice of plausible deniability by casino executives. It's clear Camacho intends to make sure there's no confusion about the importance of following the money laundering laws, which call for the filing of Currency Transaction Reports for cash amounts of $10,000 or more and Suspicious Activity Reports for cash transactions that would give a reasonable person pause.

It's not a simple paperwork crime. Money laundering is often linked to society's darkest criminal activity.

"It's not just Big Brother," Camacho said. "We're talking about going after drug dealers, human trafficking, prostitution, illegal gang activity, terrorism, grand theft, extortion, racketeering, Ponzi schemes, mortgage and check fraud, and embezzlement. They (reporting requirements) are the way we monitor illicit financial activity."

It's no secret a percentage of criminals make their way into casinos, where they live the high life and are treated like kings. While casino executives have long made it clear they aren't in the business of asking a customer about his business, Camacho made it clear the very act of gambling illicit cash is considered money laundering.

It's equally clear this guy is passionate about his job. More than 20 years of experience has taught him the money laundering paper trail often uncovers widespread criminal activity.

"If we don't do it, that next victim can be your parents, your sons and daughters, your neighbors," he said. "Folks who are willing to give our kids drugs, these are the people we catch."

With the community's troubled soul at stake, it's hard to imagine anyone with knowledge of money laundering keeping it a secret.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith.

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Copyright (c) 2009, Las Vegas Review-Journal

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