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Wynn Resorts has become the third casino operator in three months to appear before Nevada regulators and settle a wide-ranging complaint over violations of federal anti-money laundering (AML) laws with a multimillion-dollar penalty.
The Nevada Gaming Commission (NGC) voted 4-1 on Thursday (May 22) on a $5.5m fine to settle a six-count complaint from the Nevada Gaming Control Board (NGCB) related to Wynn’s use of unlicensed money transmitting businesses to recruit high-rollers to their Las Vegas properties.
Since March, Nevada gaming regulators have agreed to $19m in settlements over AML failures involving MGM Resorts International and Resorts World Las Vegas.
Thursday's fine brings the total to $24.5m.
“I am not comfortable supporting the [settlement],” said commissioner Rosa Solis-Rainey, who voted against the agreement. “I just feel that it’s egregious and that the amount is much too low for the type of conduct and various types of conduct.
“I think they have taken extensive efforts since then; I just don’t think the policies that were in place were sufficient at the point, and it just warrants a higher amount,” Solis-Rainey said.
The NGCB complaint and settlement released on May 16 is related to Wynn forfeiting $130.1m in a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Southern District of California and the U.S. Department of Justice to end a federal investigation in September 2024.
In connection with the settlement, the NGCB filed a complaint against Wynn, saying the transfers violated the company’s AML compliance program.
The control board cited several examples from the NPA including Juan Palermo, an independent agent for Wynn Las Vegas, who operated and owned all or part of multiple unlicensed or unregistered money transmitting businesses based in the U.S. and aboard.
Palermo’s businesses conducted more than 200 transfers with bank accounts controlled by Wynn Las Vegas or associated entities, distributing more than $17.7m on behalf of no less than 50 casino patrons who were in counties identified by the U.S. Department of State as “major money laundering countries” of “primary concern”.
Certain Wynn Las Vegas employees failed to report suspicious activities, which violated and undermined the casino’s AML compliance program. The employees involved in the illegal conduct are no longer with the company.
Erica Okerberg, an attorney with Greenberg Traurig who represented Wynn at the hearing, reminded the commission that through the NPA the federal government agreed not to prosecute the company for violations of federal law related to unlicensed money transmitting businesses, conspiracy and abetting.
“The primary basis for the NPA is 18 U.S. Code 1960, which primarily applies to money transmitting businesses,” Okerberg said. “Typical money transmitting businesses include Western Union and MoneyGram.”
In this case, she said, the money transferring businesses were independent agents and other third parties who failed to register and fulfill their Bank Secrecy Act (BSA) and AML obligations.
“Although there were elements tied to BSA/AML in this case, the violations do not revolve around AML violations by Wynn Las Vegas,” she added.
“Notably, there is no allegation that money was laundered through Wynn Las Vegas in this case because it involved accepted money from the unregistered money transmitting businesses.”
Fontainebleau Money Laundering Investigation Revealed
Meanwhile, Fontainebleau Las Vegas is also under investigation by the control board for potential violations of AML laws, according to a document included in the investigative report used during the commission's licensing hearing for Maurice Wooden.
Wooden has been president of the resort since January 2024. The investigation came as a surprise to Wooden, who told the commission he could not answer any of the questions being asked of him. Solis-Rainey made it clear she could not support his application with the investigation ongoing.
After agreeing to a two-year limited license while the matter was being resolved, the NGC unanimously approved his application. With a limited license, Wooden will need to reapply for a permanent license in 2027.
During an NGCB audit, company staff had raised concerns of money laundering after examining a number of credit accounts, including one where Fontainebleau management denied credit to a customer, but the decision was overturned by the ownership of the property.
Wooden’s attorney Dan Reaser, of Fennemore, told the commission his client was not asked any questions by state gaming agents about a money laundering investigation during the interview process or before the control board granted preliminary approval of his license.
NGCB chairman Kirk Hendrick interrupted the commission’s questioning of Wooden and Reaser, acknowledging the agency’s audit was ongoing and the material about the “investigation should have been marked confidential or under review” and not included in Wooden’s licensing hearing.
“I don’t want to go any deeper into this matter until the board has an opportunity to review it, and, of course, speak with the licensee,” Hendrick said.
