Las Vegas Casinos Face $7.5M in Penalties for Bank Secrecy Act Violations

vegas casino penalties

In a recent development concerning regulatory enforcement, two prominent Las Vegas casinos have reached agreements with the Department of Justice, resulting in substantial penalties totaling approximately $7.5 million. These penalties stem from alleged violations of the Bank Secrecy Act (BSA) related to anti-money laundering (AML) compliance deficiencies.

The MGM Grand has agreed to pay a fine exceeding $6.5 million, alongside the guilty plea of its former President, Scott Sibella, who faces federal charges associated with BSA violations. The U.S. Attorney’s Office for the Central District of California disclosed these outcomes in a press release issued on Thursday.

Meanwhile, the Cosmopolitan of Las Vegas, under the management of MGM, has consented to fines nearing $1 million.

As part of the settlements, both casinos will forfeit $500,000 in proceeds deemed illicit towards their penalties. Additionally, they are mandated to undergo external audits and augment their AML compliance frameworks.

The circumstances leading to these penalties involve Scott Sibella’s tenure as president of the MGM Grand between August 2017 and February 2019. During this period, Sibella allegedly possessed knowledge of Wayne Nix’s illegal bookmaking activities within the casino premises. Despite this awareness, Sibella purportedly neglected to alert MGM compliance personnel or file requisite suspicious activity reports (SARs). Moreover, he authorized Nix to receive various complimentary benefits, including meals, accommodations, and recreational activities.

In 2022, Sibella confessed to his belief regarding Nix’s involvement in unlawful gambling activities but admitted to deliberately avoiding further investigation due to his position within the organization.

Sibella’s guilty plea pertains to the failure to file SARs as mandated by casino regulations, subjecting him to a potential maximum penalty of five years’ incarceration and a $250,000 fine. His sentencing is scheduled for May 8.

In a related development, Nix pleaded guilty in April 2022 to charges of operating an illegal gambling business and submitting a false tax return. His sentencing is slated for March 6.

The imposed penalties necessitate both casinos to enhance their compliance mechanisms significantly. This includes additional review and reporting protocols, substantial investment in external compliance oversight, and revisions to internal audit procedures.

MGM Grand has acknowledged the failures within its compliance department to utilize available information during customer reviews pertaining to Nix. Combined, the casinos have admitted to accepting over $5 million in illicit proceeds.

While Vici Properties, the owner of MGM Grand, refrained from commenting on the issue, the Blackstone Group, the real estate owner of Cosmopolitan, also declined to provide any statement regarding the matter.

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