August 23, 2015 / 1:55 AM / 4 years ago

Exclusive: Caesars to pay $20 million over anti-money laundering lapses - source

ST. LOUIS (Reuters) - Caesars Entertainment Corp (CZR.O) has agreed to pay $20 million to settle U.S charges over anti-money laundering lapses and will enter into a deferred prosecution agreement with the Justice Department, said a source familiar with the matter.

The $20 million penalty, which could be announced in the next several days, will satisfy both the Justice Department’s criminal charges and parallel civil allegations by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), the source said. The Nevada Gaming Control Board is also a party to the deal.

Among other lapses, the company’s flagship property, Caesars Palace casino in Las Vegas, failed to properly police its sports book activity for wagers placed by illegal betting rings, the source said, asking not to be named because the deal has yet to be made public.

A spokeswoman for Caesars did not immediately respond to a request for comment, nor did spokesmen for the Justice Department and FinCEN. A spokesman for the Nevada Gaming Control Board declined to comment.

FinCEN has for weeks been pushing the Justice Department to move forward with a settlement, and has threatened to settle its civil investigation unilaterally if the criminal matter were not resolved soon, said the source and another person with knowledge of the matter.

In October 2013, Caesars disclosed it was under investigation by FinCEN and the Justice Department over alleged failures to comply with the Bank Secrecy Act (BSA), the primary U.S. anti-money laundering law.

FinCEN’s aggressiveness in the Caesars investigation, as well as in other recent anti-money laundering enforcement cases, has sparked friction with the Justice Department, according to several people familiar with the matter.

In June, FinCEN fined the Tinian Dynasty Hotel & Casino in the Northern Mariana Islands $75 million for allegedly operating with weak anti-money laundering controls and failing to report suspicious activity to authorities.

FinCEN’s findings were based largely on evidence gathered during a “sting” operation conducted by the Internal Revenue Service’s criminal investigations division.

The following month, the Justice Department announced it had resolved a separate criminal probe of the Tinian Dynasty and that a non-prosecution agreement had been struck under which the casino would pay about $3 million.

The fact that FinCEN made public a civil deal ahead of an expected criminal settlement, while using facts gathered by criminal investigators, has upset the prosecutors, one of the sources said.

The enforcement row comes as U.S. authorities press financial institutions to better comply with the Bank Secrecy Act.

While banks have traditionally been the primary focus of anti-money laundering enforcement, the casino industry has gained more attention from U.S. authorities in recent years.

In August 2013, Las Vegas Sands Corp agreed to pay $47 million to settle with the Justice Department over anti-money laundering failures.

Earlier this year, the Trump Taj Mahal Casino Resort in Atlantic City, New Jersey, also agreed to pay FinCEN $10 million over anti-money laundering lapses.

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