Artichoke Joe’s Casino Fined for Ignoring Anti-Money Laundering Laws
This is not a good look, Artichoke Joe’s. The 100-year old northern California casino was slapped with a hefty $8 million civil money penalty by the Financial Crimes Enforcement Network (FinCEN) because it “willfully violated U.S. anti-money laundering (AML) laws from October 2009 to November 2017.”
If that sounds bad, it is because it is bad. Essentially, the casino allowed all sorts of shady dealings to go on right on the casino floor. Staff knew things were happening, management knew things were happening, and nobody stopped a damn thing. Procedures weren’t even in place for staff to report suspicious activity if they wanted to.
We’ll let FinCEN Acting Director Jamal El-Hindi explain:
For years, Artichoke Joe’s turned a blind eye to loan sharking, suspicious transfers of high-value gaming chips, and flagrant criminal activity that occurred in plain sight. FinCEN’s $8 million civil penalty results from the card club’s failure to establish adequate internal controls and its willful violations of the Bank Secrecy Act. Casinos, card clubs and others in the gaming industry should consider their risk of exploitation by criminal elements, and understand that they will be held accountable if they disregard anti-money laundering and illicit finance laws. This significant action highlights the need for all entities, including those in the gaming industry, to build a robust culture of compliance into their policies and procedures to ensure they are not facilitating illicit activities.
One example of the “blind eye” was in 2011. Artichoke Joe’s (AJC) was raided by law enforcement officials and two casino customers were arrested, eventually convicted for “loan-sharking and other illicit activities at AJC.”
AJC “senior-level” employees knew these customers were conducting their illegal business on the premises, including using casino chips to make transactions, but they did nothing to stop it or even file the proper reports. Many of these chip transactions were made while the employees were watching.
As far as prevention and reporting controls were concerned:
In particular, AJC failed to adopt adequate policies and procedures to address risks associated with gaming practices that allow customers to pool or co-mingle their bets with relative anonymity. Further, AJC did not establish procedures for obtaining and incorporating information from propositional players (players paid by casinos or card clubs to wager at a game) or other employees who may have observed suspicious transactions. AJC also failed to file complete and timely reports on suspicious transactions involving potentially structured chip redemptions and purchases, and redemptions of large volumes of chips with no cash-in or gaming activity.
What a mess.
It’s not even like anyone could plead ignorance. Some of these activities – like cashing in large volumes of chips without previously having bought-in or gambled – were so obviously efforts to launder money that even the most novice casino employee would be able to spot them.
There has been no indication by FinCEN that anyone at Artichoke Joe’s was involved in any of the illicit activities or was paid by any of the criminals to allow the conduct at the casino.
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