U.S. Attorney Warns Casinos Not To Sleep On Money Laundering

May 18, 2022
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Even if they are victims of money laundering schemes, casinos can find themselves facing criminal charges if their safeguards against financial fraud fail to meet federal standards, the U.S. attorney for New Jersey said Tuesday.

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Even if they are victims of money laundering schemes, casinos can find themselves facing criminal charges if their safeguards against financial fraud don’t meet federal standards, the U.S. attorney for New Jersey said Tuesday (May 17).

For example, members of a drug cartel who launder money at a casino can cooperate with law enforcement officials to build a criminal case against the very casino they victimized.

If the casino did not file the requisite suspicious activity reports (SARs) with the federal government or allowed the money laundering to continue repeatedly “that casino is in hot water,” said U.S. Attorney Philip Sellinger.

After being nominated by President Biden, Sellinger has served as the U.S. Attorney for the District of New Jersey since December 16, 2021.

Sellinger said casinos with shoddy financial transactions records are likely to be the subjects of federal audits which can take years.

“The bottom line is how adequate, how effective is the company’s corporate compliance program,” he said.

Speaking at the annual gambling law bootcamp at Seton Hall University in Newark, New Jersey, Sellinger acknowledged the priorities of the U.S. Department of Justice regarding corporate white-collar crime have “waxed and waned” under different presidents over the years.

“But I can tell you today that a top priority of the Department of Justice in Washington and the U.S. attorney’s office in New Jersey is individual accountability — to prosecute the individuals who engage in and benefit from whatever the range of misconduct that’s being investigated is,” Sellinger said.

Casino executives who break the law, he said, are not going to be able to buy their way out of a criminal prosecution by having their company pay a fine.

“That’s just not going to happen,” Sellinger said.

If a casino seeks to cooperate with an investigation by the Justice Department, he said, the cooperation must be “completely unlimited on the subject matter. Everything has to be disclosed other than privileged information.”

Sellinger cited three cases of financial institutions, including Las Vegas Sands, paying large sums for failing to adhere to federal regulations to prevent money laundering.

In 2013, Las Vegas Sands paid more than $47m it had received from a Chinese drug trafficker to avoid prosecution for failing to report the suspicious payments.

Zhenli Ye Gon was accused of importing chemicals from his native country of China to Mexico to produce methamphetamine.

“There were no SARs filed,” Sellinger said.

“There were actual discussions by Sands with [Ye Gon] about making larger deposits rather than smaller, incremental deposits. [Ye Gon] said, ‘I don’t want to make large deposits; I only want to do small deposits because I don’t want the government to know about this.’”

Sellinger described the transactions between Sands and Ye Gon as “particularly egregious.”

The other two cases included Rabobank, a Dutch cooperative which paid $900m in 2018 to resolve money laundering charges, and Goldman Sachs, which paid $3bn in 2020 after a money laundering scandal in Malaysia.

“In short, when compliance works, it’s a really important tool for law enforcement, for the FBI, for the U.S. attorney’s office and those of you who are involved in compliance, you’re on the front lines, and we rely on you,” Sellinger said.

Ron Pascale, an FBI agent in Newark, said the FBI launched a sports integrity monitoring program in 2018.

“Not all [FBI field] offices have people who work this program,” Pascale said. “It’s basically, Pennsylvania, Florida, New Jersey, California, Nevada.”

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