ST. LOUIS, June 25 (Reuters) - U.S. authorities are ramping up their investigation into money flows from gambling hotspot Macau to ensure that U.S. casinos with operations there are not used as conduits to funnel crime proceeds from Asia and elsewhere into the U.S. financial system.
Agents of the U.S. Internal Revenue Service’s criminal enforcement unit traveled to Macau last month to gather information, two sources familiar with the matter said. An IRS spokesman declined to comment on Wednesday.
The sources, speaking on condition of anonymity, said Adam Steiner, a supervisory special agent with Internal Revenue Service-Criminal Investigation (IRS-CI), acknowledged the Macau trip at an anti-money laundering conference in Las Vegas on June 12. The media were excluded from the room during the agent’s remarks.
The U.S. Treasury Department’s anti-money laundering unit has also been closely examining money flow from Macau casinos.
It was unclear if IRS-CI was probing the operations of one or more U.S. casinos in Macau for possible criminal prosecution for failing to police transactions for money laundering activity, although former federal law enforcement officials with experience conducting such investigations said earlier this week that that was a possibility.
Las Vegas Sands Corp, Wynn Resorts and MGM Resorts International entered the Chinese territory over a decade ago. These companies on Wednesday did not immediately respond to requests for comment.
The goal of the agents’ trip may have been to audit transactions flowing from Macau to U.S. casinos since strict privacy controls in Macau would have made it difficult for IRS-CI to access financial documents from the United States, one former law enforcement official with experience tracking casino money said this week.
Macau, a tiny former Portuguese colony that is now a special administrative region of China, is the only place in China where citizens can legally gamble in casinos. Annual revenues reached $45 billion in 2013.
U.S. Treasury officials have publicly expressed concern that funds of murky origin may be flowing from Macau to Las Vegas to fund gambling by Chinese high-rollers, which could facilitate the laundering of large sums if U.S. casinos lack proper controls to detect suspicious transactions.
IRS-CI’s Steiner delivered a warning at the conference regarding the importance of such controls and the threat of civil or criminal penalties against casinos lacking them, some of the original sources who were in the room said.
Speaking at the same conference, Jennifer Shasky Calvery, director of Treasury’s Financial Crimes Enforcement Network, said that regulations require U.S. casinos to vet money sent from affiliated casinos or gambling facilitators known as “junket operators” in Macau.
“In these situations, you need to be concerned about potentially illicit sources of funds issues and the strength of (anti-money laundering) controls in the originating overseas jurisdiction,” Shasky said during a keynote speech. (Reporting by Brett Wolf of the Compliance Complete service of Thomson Reuters Accelus in St. Louis; Editing by Bernard Orr)
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