California Casino Fined $900K by FinCEN for Lax Anti-Money Laundering Controls

The owners of the Lake Elsinore Hotel and Casino in Southern California have agreed to a civil monetary penalty of $900,000 to resolve the numerous violations of the Bank Secrecy Act (BSA) that an enforcement investigation conducted by FinCEN discovered.

Lake Elsinore Hotel and Casino admitted to years of failures to complete CTRs and SARs, according to FinCEN

In the consent order, Sahara Dunes Casino, LP, the parent company of Lake Elsinore, admits to years of failures to complete Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs).

“Lake Elsinore operated for years without the most basic AML controls, putting its customers and the U.S. financial system at risk and denying law enforcement information on suspicious activity,” said FinCEN’s Director Andrea Gacki.

“This action should serve as a reminder that all financial institutions—regardless of their type or size—must comply with their obligations under the BSA and FinCEN’s regulations.”

Moreover, Lake Elsinore’s willful violations of the BSA continued for over a four-and-a-half-year period. FinCEN found that the infractions resulted from decisions made by the card club’s management.

FinCEN’s consent order detailed that between at least Sept. 7, 2014, through Feb. 11, 2019, the Lake Elsinore Hotel and Casino management failed to adhere to the federal BSA and its requirements to report CTRs and SARs.

California casino will be subject to an AML program review

Federal law requires cardrooms to file CTRs when a customer transacts “cash in” or “cash out” totaling more than $10,000 in a 24-hour period. Cardrooms also must identify and report suspicious transactions involving money transfers of $5,000 or more via an SAR filing.

In addition to the civil money penalty, Lake Elsinore will also be subject to an AML program review. Failing to file CTRs and SARs is a serious offense in the Golden State.

According to the news release, this action will be FinCEN’s first resolution alongside the California Department of Justice – Bureau of Gambling Control (CA-BGC).

As delegated by the Secretary of the Treasury, FinCEN has “authority for the imposition of civil penalties.”

Additionally, the bureau has “[o]verall authority for enforcement and compliance” with the BSA and its implementing regulations.

FinCEN’s Enforcement and Compliance Division is responsible for investigating major violations of the BSA.