FinCEN Fines Lake Elsinore Casino for BSA Compliance Issues
The Financial Crimes Enforcement Network (FinCEN) has issued a $900,000 fine to Lake Elsinore Hotel and Casino in California, marking the first FinCEN enforcement action against a casino in six years.
Badge of the Financial Crimes Enforcement Network. Lake Elsinore Casino hit with a $900,000 fine by FinCEN.
LISTEN TO THIS ARTICLE:The penalty is part of a settlement addressing claims that Lake Elsinore failed to uphold anti-money-laundering (AML) protocols required by the Bank Secrecy Act (BSA). According to FinCEN, the casino’s ongoing neglect of these safeguards endangered its patrons and the broader U.S. financial landscape.
Located between Los Angeles and San Diego, the Lake Elsinore casino reportedly failed to establish and maintain adequate BSA compliance programs. FinCEN’s investigation uncovered that the casino neglected to submit critical Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs). These reports serve as tools for identifying and flagging potential illegal financial activities. The agency reported that these failures persisted for over four years, spanning from September 2014 through early 2019.
Casino Management Lacked Knowledge of BSA Regulations
The casino’s management decisions reportedly played a significant role in the compliance lapses. Lake Elsinore’s compliance committee included its general manager and chief operations officer, both of whom had limited knowledge of BSA regulations. FinCEN noted that this lack of expertise weakened the casino’s AML protocols and left many suspicious transactions unreported. As a result, law enforcement missed crucial intelligence on possible financial crimes, including money laundering.
FinCEN’s Director, Andrea Gacki, spoke of the importance of complying with AML laws to ensure financial transparency and national security.
Lake Elsinore operated for years without the most basic AML controls, putting its customers and the US financial system at risk and denying law enforcement information on suspicious activity. This action should serve as a reminder that all financial institutions - regardless of their type or size -must comply with their obligations under the BSA and FinCEN’s regulations.
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Casino to Undertake Improvements Program
As part of the settlement, Lake Elsinore Casino must make substantial improvements to its AML program. This includes appointing an independent AML expert approved by FinCEN to monitor its compliance efforts. These measures aim to bring the casino’s AML practices in line with federal standards. If Lake Elsinore meets these conditions, FinCEN has agreed to reduce the penalty by $50,000, bringing the total fine to $850,000.
This case was also the first collaboration between FinCEN and the California Department of Justice’s Bureau of Gambling Control with both agencies working to reinforce the importance of regulatory compliance among California’s gaming establishments as the industry expands.
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