HomePublicationsNewsletter ArchiveVolume 24Issue 16FinCEN ASSESSES CIVIL PENALTY FOR BSA VIOLATIONS

On May 3, 2018, the Financial Crimes Enforcement Network (FinCEN) assessed a civil monetary penalty against a California card room (Artichoke Joe’s Casino or “AJC”) in the amount of $8 Million, with $3 Million suspended pending compliance with certain “undertakings” agreed to by the card room.   The AJC card room operates in San Bruno, California and has 38 tables.  FinCEN found that the AJC willfully violated BSA program and reporting requirements from October 2009 through November 2017 by failing to implement an effective Anti-Money Laundering Program and failing to detect and adequately report suspicious transactions in a timely manner.  With regard to suspicious activity reporting, FinCEN noted that AJC filed 12 Suspicious Activity Reports from 2010 to 2011, but that they all contained inadequate narratives that were essential to ensuring that the reports would prove useful to law enforcement.   FinCEN also found that AJC failed to conduct adequate independent testing.  AJC conducted independent testing in 2011, after execution of search warrants by state and federal officials but had not previously done so (13 years after FinCEN established the program requirement for casinos and card rooms). 

FinCEN stated in the order assessing the penalty that it imposes a civil fine of $25,000 for each willful violation of AML program requirements, noting that a separate violation occurs for each day that the violation continues.  FinCEN also considered AJC’s financial condition and ability to pay, and the size and sophistication of the operation – noting that it is one of the larger facilities in California.   FinCEN further considered AJC’s awareness of loan sharking activities occurring on premise, as well as AJC’s culture of compliance.   FinCEN factored in AJC’s remedial measures and considered other precedent of penalties against casinos and card clubs in the gaming industry.  

Notably, AJC consented to the assessment, and agreed to hire a qualified independent consultant (both to advise on a going forward basis and to do a detailed look-back review), a compliance officer to ensure day to day compliance, and to adopt and implement an effective AML program.


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