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US Treasury fines Caesars $8 mln over anti-money laundering failures

ST. LOUIS (Reuters) - The U.S. Treasury Department’s anti-money laundering unit on Tuesday fined Caesars Entertainment Corp’s flagship Las Vegas property $8 million for failing to properly police transactions for illicit activity.

Caesars Palace failed to report suspicious activity involving high-roller clients in the United States and at branch offices in Asia, Treasury’s Financial Crimes Enforcement Network (FinCEN) said.

The settlement between FinCEN and Caesar’s does not fully resolve the matter.

The Justice Department is still weighing the resolution of a criminal probe by the U.S. Attorney’s office in Las Vegas and the Internal Revenue Service’s criminal division.

FinCEN had been expected to issue its fine as part of a global settlement involving the Justice Department and the Nevada Gaming Control Board.

In an abrupt reversal, however, two people familiar with the case told Reuters that delays at the Justice Department over finalizing a tentative deferred prosecution agreement prompted FinCEN to act alone.

Spokesmen for the Justice Department and FinCEN declined to comment.

A Caesars spokeswoman declined to comment on the criminal probe, but the company admitted to civil violations of the Bank Secrecy Act (BSA): the primary U.S. anti-money laundering law enforced by FinCEN.

A 2012 IRS examination found that Caesars failed to report to authorities over 100 incidents involving potential criminal activity, FinCEN said in assessing its penalty.

Caesars Palace has made substantial improvements to every aspect of its BSA compliance program, the spokeswoman said.

“The entire Caesars organization is committed to full compliance with the requirements applicable to casinos,” according to a statement the spokeswoman provided to Reuters.

FinCEN’s case focused on “lucrative” private gaming salons, which it said “are reserved for Caesars’ wealthiest clientele, who may gamble millions of dollars in a single visit, and which openly allowed patrons to gamble anonymously.”

The salons were marketed overseas, including in Hong Kong, Tokyo and Singapore, to recruit high-dollar gamblers.

Related transactions, such as large wire transfers and cash deposits, were not properly monitored “and exposed the casino and the U.S. financial system to illicit activity,” FinCEN said.

“Caesars knew its customers well enough to entice them to cross the world to gamble and to cater to their every need,” said FinCEN Director Jennifer Shasky Calvery. “But, when it came to watching out for illicit activity, it allowed a blind spot in its compliance program.”

The Caesars matter is part of a broader U.S. government crackdown on casinos over anti-money laundering weaknesses.

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