Wynn Resorts has announced that it has reached an agreement with the United States Department of Justice (DOJ) to pay the largest penalty ever by a Nevada gaming company: $130.13 million.
The fine is a ‘non-prosecution agreement […] resolving the previously-disclosed investigation into various transactions at Wynn Las Vegas relating to certain patrons who reside or operate in foreign jurisdictions which were facilitated by former employees, agents and other third parties that were unlicensed money transmitting businesses’, in violation of US laws.
The group notes that the DOJ took into account the historical nature of the issue and the ‘extensive remedial measures’ put in place before the agreement was penned.
Wynn Resorts furthers that the company’s Las Vegas operation ‘no longer employs or is affiliated with any of the individuals implicated in the transactions at issue’.
Given the non-prosecution agreement, Wynn indicates that the DOJ ‘will not bring any criminal charges against Wynn Las Vegas concerning the subject matter of its investigation’.
The charges were leveled in response to Wynn’s reported use of unregistered money transferring enterprises that went around the traditional financial system.
In essence, the junket-like system used agents to transfer funds through third parties, affiliates, shell companies and otherwise from accounts oftentimes based in Latin America into Wynn’s bank account in California – later transferred to the cage in Las Vegas.
Reports indicate that just one cited example involved transactions that may have included up to 50 patrons and involved over $17.7 million.
Speaking of the fine, US Attorney Tara McGrath noted “Casinos, like all businesses, will be held to account when they allow customers to evade US laws for the sake of profit”.
The Department of Justice cites one type of transfer known as “Human Head” or “Human Hat”, where individuals purchased chips at Wynn Las Vegas and gambled as proxies ‘for another nearby person […] who was unable or unwilling to conduct financial transactions or gamble under their own identity’.
In addition, they identified the “Flying Money” scheme, with a money processor ‘acting as an unlicensed money transmitting business, collected US dollars in cash from third parties in the United States and delivered that cash to a WLV patron who could not otherwise access cash in the US’. This money was then transferred from the punters overseas account to the money processor’s, with a duty paid.
‘WLV knowingly allowed this form of gambling without scrutinizing the source of funds and without reporting the suspicious activity,’ notes the DOJ.
The authorities further outline how Wynn failed to file Suspicious Activity Reports (SAR), highlighting how, in 2018, Wynn ‘facilitated financial transactions worth approximately $1.4 million for an individual who two years earlier had been publicly linked to proxy gambling, and a year earlier, while in the company of the President of Marketing of a WLV international affiliate, was denied entry to the United States because of suspected associations with a criminal organization.’
The DOJ further points to an instance in which Wynn Las Vegas ‘did not report transactions involving millions of dollars by an individual who […] had spent six years in prison in China for conducting unauthorized international monetary transactions and violations of other financial laws’.
The investigation also found 15 other defendants who ‘previously have admitted money laundering, unlicensed money transmitting, or other crimes, with associated criminal penalties of over $7.5 million,’ notes the authority.
“Federal laws that regulate the reporting of financial transactions are in place to detect and stop illegal activities. Deliberately avoiding Bank Secrecy Act requirements is a form of money laundering, “noted Special Agent in Charge for IRS-CI in Las Vegas, Carissa Messick.
