Fed watchdog fines Sparks Nugget casino $1m for “wilful disregard” of AML laws

fincen-sparks-nugget-casino-money-launderingA US federal watchdog agency has slapped a $1m fine on a Nevada casino for its “wilful disregard for anti-money laundering laws.”

On Tuesday, the Financial Crimes Enforcement Network (FinCEN), a branch for the US Treasury Department, levied a $1m penalty on Sparks Nugget Inc., which operates the Nugget Casino Resort (previously known as John Ascuaga’s Nugget) in Sparks, Nevada.

FinCEN says Sparks Nugget “egregiously” violated its AML responsibilities under the Bank Secrecy Act, including disregarding the recommendations of the casino’s own compliance manager, choosing not to file Suspicious Activity Reports (SARs) the manager had prepared and ordering her not to interact with Internal Revenue Service auditors.

Sparks also failed to report several Currency Transaction Reports (CTRs), committed “hundreds” of recordkeeping violations, and its day-to-day managers “maintained that no suspicious activity ever transpired in the millions of dollars of transactions” at the casino.

Underscoring the casino’s level of disinterest in its AML responsibilities, FinCEN’s investigation found that the management committee Sparks established to determine whether to file SARs “never held a single meeting” and some committee members “were unaware that they were even on the committee.”

FinCEN Director Jennifer Shasky Calvery said Sparks Nugget had “a systemic breakdown in its compliance program.” Shasky Calvery said the casino “saw no need” to rethink its AML defenses, “despite the fact that it hosted convicted embezzlers” and had been “repeatedly alerted to suspicious transactions” by its own compliance officer.

The shortcomings were deemed all the more unforgivable given that the casino had gone to great lengths to obtain info on its customers to help drive casino profits, provide more personalized customer service and to minimize business risk.

The probe, which was disclosed in February, prompted Michonne Ascuaga to resign from the Nevada Gaming Control Board. Ascuaga, who was appointed to the board just last April, was CEO of the casino until its sale in 2013 to Wolfhound Holdings, which leased the casino’s management to Global Gaming & Hospitality.

FinCEN has turned a sharper eye on the casino industry in the past few years, laying out multimillion dollar fines on gaming venues from Las Vegas to Atlantic City all the way to the Northern Marianas and back to California.

In an ironic bit of timing, the Gaming Control Board announced on Wednesday that it had granted initial approval of the sale of the Sparks Nugget to Marnell Gaming LLC. The acquisition, which was announced in February, is expected to close in May. The Nevada Gaming Commission will meet to discuss the matter on April 21.

Marnell Gaming CEO Anthony Marnell III referenced the FinCEN action in his discussion with Board members on Wednesday. Marnell said such AML slipups “will never happen” on his watch.

Marnell, which owns the Colorado Belle and Edgewater properties in Laughlin, Nevada, has said it plans to invest $25m over the next two years to gussy up the Sparks Nugget property.