Hawaiian Gardens Casino has become the third California card club to be hit with a seven-figure fine for anti-money laundering (AML) violations.
On Friday, the US Financial Crimes Enforcement Network (FinCEN) announced that it had reached a $2.8m settlement with the Hawaiian Gardens’ owners for violating the Bank Secrecy Act (BSA).
FinCEN says the Internal Revenue Service (IRS) examined The Gardens for compliance with the BSA in 2011 and again in 2014. The IRS said “many” violations it uncovered in 2011 were still unaddressed in 2014. The Gardens’ independent consultant had identified the same type of problems in 2013.
FinCEN said The Gardens had failed to (a) implement and maintain an effective AML program, (b) report large cash transactions, (c) file many suspicious activity reports (SAR), and (d) keep certain required records.
Despite collecting customer info via its player club cards, FinCEN claimed that 80% of SARs filed by The Gardens between January 2013 and September 2014 included “at least one unknown subject.” FinCEN says this lack of interest in using all available tools “allowed anonymous transactions and frustrated record keeping.”
Staff at The Gardens were found to be complicit in helping customers structure transactions to avoid federal reporting thresholds. One employee disciplined for engaging in such behavior in 2009 was discovered up to the same shenanigans in 2013.
The Gardens continued to do business with customers they themselves had identified as suspicious even after these customers refused to provide identification. One of these suspect characters continued to be welcomed back to The Gardens despite being the subject of 15 prior SARs.
In a statement, FinCEN’s acting director Jamal El-Hindi said The Gardens lacked a “culture of compliance” and had “ignored the IRS findings – and the findings of its own consultant – thus allowing these violations to go on for years.”
The Gardens is one of the card rooms that has formed a strategic partnership with Amaya Gaming’s PokerStars brand to anticipate the state’s long-stalled efforts to regulate online poker.
FinCEN first dropped its hammer on a California card club last December, fining the Oaks Card Club $650k for BSA violations. In January, the Normandie Casino reached a $2.3m settlement over similar antics, leading state regulators to revoke its owners’ gaming licenses