Federal and California state regulators have hit the state’s second-largest card room with a $6 million penalty for failing to run an appropriate anti-money laundering program and to disclose a federal investigation into its AML practices, news emerged this past Thursday.
Gardens Casino in Hawaiian Gardens, which recently finalized a $90 million renovation and expansion project, will remain under regulatory scrutiny for the next two years, if it wants to keep its license under the terms of its settlement with the state that was approved Thursday by the California Gambling Control Commission.
The gambling venue was also slapped with a $3.1 million fine to pay to the state. The penalty imposed on Gardens Casino was the largest ever issued by state gambling regulators, beating a previous record of $2.1 million.
In addition, the card room will have to pay a $2.8 million penalty to the federal Financial Crimes Enforcement Network for its violations.
The Federal Investigation
Garden Casino’s troubles with California regulators stemmed from a federal investigation into its activities conducted by the Treasury Department. The venue’s management failed to disclose to California gambling watchdogs that it was probed by federal authorities over weak money laundering controls and submitted under penalty of perjury multiple applications for license renewals with the California Bureau of Gambling Control.
Following the Treasury Department probe, FinCEN imposed the above-mentioned $2.8 million fine on the gambling venue. Federal regulators sanctioned Gardens Casino for failing to run an effective anti-money laundering program, failing to report suspicious transactions of amounts greater than $10,000 and suspicious activity, and failing to keep proper records for seven years between 2009 and 2016.
Gardens Casino opened doors in 1997 with space of just under 60,000 square foot. Following its $90 million renovation and expansion, the property’s gaming floor now spreads over 200,000 square feet and features 225 tables.
No Excuse for Misleading Regulators
As mentioned earlier, in addition to paying a $3.1 million fine to California regulators, Gardens Casino will also be under scrutiny for 24 months in order to prove that it has improved its anti-money laundering policies and is suitable to keep its gaming license.
Commenting on Thursday’s settlement, California Attorney General Xavier Becerra said that there was no excuse “for failing to comply with the law and deliberately attempting to mislead regulators.”
The official also noted that if the casino is caught in violation over its two-year period of scrutiny, it would have its license yanked.
Garden Casino’s General Counsel, Keith Sharp, said in a statement that the property “has strong procedures in place and several years ago we put in place the necessary corrective measures to ensure these issues do not re-occur.”
Kyle Kirkland, President of the California Gaming Association, pointed out that the violations took place several years ago and included inaccurate reporting. However, no evidence of actual money laundering occurring at the casino was found over the course of the federal authorities’ probe.
Source: Hawaiian Gardens Casino Fined $6M for Misleading Regulators, Failing to Deter Money Laundering
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