Caesars hit with $8m Fine over Money Laundering Scandal

Caesars Entertainment has already had some financial difficulties in recent years. And things won’t get any better since they’ve now been slapped with an $8 million civil fine for poor anti-money laundering controls.

The key issue involves their VIP rooms, where they allowed certain Chinese high rollers to gamble anonymously. Additionally, they did a poor job of monitoring their international marketing offices that recruited players from places like Hong Kong.

An investigation by the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) led to the massive $8 million fine, while more trouble could be on the horizon for Caesars when the IRS completes their investigation.

A FinCEN document from the settlement reads, “Caesars allowed a blind spot to exist in its compliance program — private gaming salons — enabling some of the most lucrative, and riskiest, financial transactions to avoid the scrutiny of Caesars’ compliance program.”

FinCEN’s research turned up a number of odd instances that Caesars failed to report. For example, IB Times writes that a foreign customer deposited $50,000 into a Caesars Hong Kong bank . This should have been flagged, according to U.S. law, but it wasn’t.

FinCen Director Jennifer Shasky Calvery discussed the matter with the following statement:

“Caesars knew its customers well enough to entice them to cross the world to gamble and to cater to their every need. But, when it came to watching out for illicit activity, it allowed a blind spot in its compliance program. Every business wants to impress its customers, but that cannot come at the risk of introducing illicit money into the U.S. financial system.”

Caesars isn’t the only casino company to be fined for its dealings with Asian high rollers. Atlantic City’s Trump Taj Mahal and the Tinian Dynasty Hotel & Casino on the Northern Mariana Islands (U.S. commonwealth in Pacific Ocean) were also hit with fines for their lack of money-laundering controls.

However, it appears that Caesars is taking the biggest punishment for over 100 instances that went unflagged to the IRS. The IB Times questions whether Caesars stock will be hurt by the recent fine, but so far it’s up 1.5 percent and sitting at $9.45 a share. However, the long term may reveal a different story after the latest scandal involving Caesars Entertainment.