The $12 million FinCEN civil money penalty (CMP) imposed against CG Technology, L.P., doing business as Cantor Gaming, reminds gaming and other U.S. regulated businesses of the importance of maintaining and administering appropriate policies and practices to comply with the anti-money laundering (AML) and other provisions of the Bank Secrecy Act (BSA).
The $12 million CMP was imposed by FinCEN “for egregious and systemic violations of the AML provisions of the BSA. According to FinCEN, FinCEN’s analysis of reports filed under the BSA and information obtained from a 2010 examination by the Internal Revenue Service’s Small Business/Self-Employed Division (IRS SB/SE), as well as a 2014 follow up audit by FinCEN, support this action. Additional supporting information concerning illegal gambling and money laundering surfaced stemming from a criminal investigation and indictment of 25 individuals, known as the “Jersey Boys,” conducted by the U.S Attorney’s Office for the Eastern District of New York.
FinCEN’s assessment is concurrent with the U.S. Attorney’s Offices for the Eastern District of New York and District of Nevada’s announcement of a non-prosecution agreement with Cantor Gaming. In that settlement, Cantor Gaming resolved possible criminal charges, agreeing to a forfeiture of $6 million and a criminal fine of $10.5 million. Six million dollars of the criminal fine and forfeiture will be credited to partially satisfy FinCEN’s $12 million civil money penalty.
Pursuant to the settlement, Cantor Gaming admitted that it willfully violated the BSA and its implementing regulations. These violations are described in an accompanying Statement of Facts. Cantor Gaming facilitated high risk and high dollar wagering on sporting events representing over 30% of all sports wagers in Nevada. At the same time, it failed to have an appropriate AML program in place. Cantor Gaming failed to have sufficient internal controls and mandatory independent audits; it failed to have sufficient AML training for its officers and employees; and it failed to use all available information to detect and report suspicious transactions. In addition to these extensive, years-long program violations, Cantor Gaming failed to properly and timely report currency transactions. Cantor Gaming also failed to file required suspicious activity reports (SARs) on several transactions, including transactions by customers who were involved in blatantly suspicious activity, those who were involved in criminal activity, and those who had no legitimate source of funds. And finally, Cantor Gaming committed thousands of recordkeeping violations, including by failing to keep required records on its highest-volume patron who placed more than $300 million in wagers between 2010 and 2013.
Part of FinCEN’s action also stemmed from a criminal investigation relating to Cantor Gaming’s involvement with the “Jersey Boys,” an illegal gambling operation that employed “runners,” or individuals who opened wagering accounts and placed bets with Cantor Gaming’s sports books. These runners were paid for illegally placing bets on behalf of others, including out-of-state bettors. Cantor Gaming’s Vice President, Michael Colbert, facilitated this illegal activity, and was indicted for his involvement with the Jersey Boys operation. Colbert was aware of the arrangement with the Jersey Boys runners, and facilitated its operation. Colbert was charged in the Eastern District of New York with a felony count of participating in an illegal gambling conspiracy and pled guilty on August 21, 2013.
Both FinCEN’s Assessment and the Non-Prosecution Agreement filed by the U.S. Attorney’s Offices were accompanied by Cantor Gaming’s commitment to perform a series of required Remedial Measures to ensure forward-looking compliance. Cantor Gaming will also conduct a look-back review of transactions conducted between 2010 and 2013 to ensure that suspicious transactions and attempted transactions were properly reported.
The CMP and related settlements should serve as a reminder to other U.S. businesses to verify the adequacy of their own organization’s compliance with the AML and other requirements of the BSA and other related laws. Businesses and their leaders not only should adopt well-documented policies requiring compliance with the BSA as well as administer well documented processes and procedures for training workforce, monitoring compliance, investigating and appropriately responding to government inquiries, charges or other situations that might suggest compliance concerns or deficiencies, and providing periodic and other reporting to senior management and the Board concerning these compliance efforts.
About The Author
The author of this update, Cynthia Marcotte Stamer is a management attorney Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization, author, lecturer and management and policy thought leader whose more than 28 years’ of leading edge work helping organizations and their management lead, manage operations, risk, performance and compliance have resulted in her recognition by Martindale-Hubble as a “AV-Rated Premier” (top 1%) attorney and a “Top” Attorney in Labor and Employment Law, Employee Benefits Law, Healthcare Law and Business and Commercial Law.
Highly valued for her rare ability to combine and use her detailed legal and operational knowledge and experience with talents for creative problem-solving and consensus building to find pragmatic client-centric solutions, Ms. Stamer is recognized nationally and internationally for her work helping organizations and their management use the law and process to manage people, process, compliance, operations and risk.
Ms. Stamer supports her clients as determined by the needs of her clients both on a real time, “on demand” basis as well as on longer term basis to deal with daily performance management and operations, emerging crises, strategic planning, process improvement and change management, investigations, defending litigation, audits, investigations or other enforcement challenges, government affairs and public policy. As a continuous part of this work, Ms. Stamer advises, represents, coaches and defends public and private, domestic and international businesses, governments, employee benefit plans and their fiduciaries, and other organizations and their leaders about credentialing, engagement, contracting and other policy and program development and documentation, performance management, compensation and benefits, occupational injury and safety, and other risk and performance management of employees and other service providers, vendors and suppliers, customers and others; Federal Sentencing Guideline and other compliance, corporate governance, and internal controls; business disruption and continuity, disaster preparedness and response, occupational injury, corporate compliance, government investigation and other critical event planning, investigation and response; director, officer, and other leadership development, succession and liability management; trade secret, data security and breach, and other confidentiality and privacy policies, practices, events and processes; government and other contracting; business disruption and continuity, record retention and other documentation and reporting, and a host of other concerns. She also conducts, or assists and counsels clients to plan, conduct, review and redress findings from legal or corporate policy breaches, whistleblower or other complaints or reports, internal investigations, mock audits, government, customer, vendor, accounting firm, credentialing and other audits or investigations; employment and other services, compensation, employee benefits, investigations, officer, director and fiduciary liability, insurance and other workforce and operational aspects of mergers, acquisitions, restructurings, bankruptcies and other corporate events; cybercrime, identity theft, FACTA, HIPAA, tax, personal financial information, personal health information, trade secret and other data misappropriation or other breaches and threats to data, information, systems and processes, and other risk or compliance events; to evaluate, implement, and enforce D&O, E&O, General Liability, Fiduciary Liability, risk pools, captive insurance, indemnity, and other liability and risk retention and mitigation arrangements; as well as represents and defends organizations, employee benefit plans, and their leaders in government and private investigations and audits, regulatory actions, litigation and other enforcement actions.
A primary drafter of the Bolvian social security privatization law with extensive domestic and foreign regulatory and public affairs experience and widely recognized for her extensive involvement with U.S. health care, pension and social security and workforce policies, Ms. Stamer also has extensive government relations and public policy experience. She has been and remains deeply involved in helping to influence the Affordable Care Act and other health care, pension, social security, workforce, insurance and other policies critical to the workforce, benefits, and compensation practices and other key aspects of a broad range of businesses and their operations. She both helps her clients respond to and resolve emerging regulations and laws, government investigations and enforcement actions and helps them shape the rules through dealings with Congress and other legislatures, regulators and government officials domestically and internationally. A former lead consultant to the Government of Bolivia on its Social Security reform law and most recognized for her leadership on U.S. health and pension, wage and hour, tax, education and immigration policy reform, Ms. Stamer works with U.S. and foreign businesses, governments, trade associations, and others on workforce, social security and severance, health care, immigration, privacy and data security, tax, ethics and other laws and regulations. Founder and Executive Director of the Coalition for Responsible Healthcare Policy and its PROJECT COPE: the Coalition on Patient Empowerment and a Fellow in the American Bar Foundation and State Bar of Texas. She also works as a policy advisor and advocate to health plans, their sponsors, administrators, insurers and many other business, professional and civic organizations.
Author of the thousands of publications and workshops these and other employment, employee benefits, health care, insurance, workforce and other management matters,
Ms. Stamer also is a highly sought out speaker and industry thought leader known for empowering audiences and readers. Ms. Stamer’s insights on employee benefits, insurance, health care and workforce matters in Atlantic Information Services, The Bureau of National Affairs (BNA), InsuranceThoughtLeaders.com, Benefits Magazine, Employee Benefit News, Texas CEO Magazine, HealthLeaders, Modern Healthcare, Business Insurance, Employee Benefits News, World At Work, Benefits Magazine, the Wall Street Journal, the Dallas Morning News, the Dallas Business Journal, the Houston Business Journal, and many other publications. She also has served as an Editorial Advisory Board Member for human resources, employee benefit and other management focused publications of BNA, HR.com, Employee Benefit News, InsuranceThoughtLeadership.com and many other prominent publications. Ms. Stamer also regularly serves on the faculty and planning committees for symposia of LexisNexis, the American Bar Association, ALIABA, the Society of Employee Benefits Administrators, the American Law Institute, ISSA, HIMMs, and many other prominent educational and training organizations and conducts training and speaks on these and other management, compliance and public policy concerns.
Ms. Stamer also is active in the leadership of a broad range of other professional and civic organizations. For instance, Ms. Stamer presently serves or previously servied, among other things, on an American Bar Association (ABA) Joint Committee on Employee Benefits Council representative; Vice President of the North Texas Healthcare Compliance Professionals Association; Chair of the ABA RPTE Employee Benefits & Other Compensation Committee, its Defined Contribution Committee Co-Chair, its Fiduciary Responsibility Welfare Benefit Plans Committee Chair and Co-Chair, on its Substantive Groups & Committee and as its Practice Management Vice Chair; Past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group and a member of its Healthcare Coordinating Council; Vice Chair of the ABA TIPS Employee Benefit Committee; Coordinator and a Vice-Chair of the Gulf Coast TEGE Council TE Division; on the Executive Committee, BACPAC Committee, State Board of Directors, Regional Chair, Dallas Chapter Chair and Health Care Task Force of the Texas Association of Business; President of the Dallas Business Group; Vice President of the North Texas Healthcare Compliance Professionals Association, founding Board Member and President of the Alliance for Healthcare Excellence, as a Board Member and Board Compliance Committee Chair for the National Kidney Foundation of North Texas; the Board President of the early childhood development intervention agency, The Richardson Development Center for Children; Chair of the Dallas Bar Association Employee Benefits & Executive Compensation Committee; Dallas Legislative Affairs Chair, Region IV Chair and National Consultants Board Member of the Society for Human Resources Management (SHRM), a member of the Board of Directors of the Southwest Benefits Association; a Board Member of the Dallas World Affairs Council, on the Advisory Boards of InsuranceThoughtLeadership.com, HR.com, Employee Benefit News, and many other publications; on the faculty of the University of Dallas and a multitude of other seminar and symposium faculties, and in many other organizations..
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