The Financial Crimes Enforcement Network (FinCEN) announced its first enforcement action against a small “card club” gaming establishment imposing a civil penalty of $650,000. The enforcement action, announced December 17, 2015, continues the expansion of FinCEN's enforcement activity in the gaming industry beyond major casino operators. This action is very much in line with the enforcement ''core principles'' outlined by Associate Director for Enforcement, Stephanie Brooker, in her remarks to the 2015 Bank Secrecy Act Conference in Las Vegas last June.

Although some of the facts presented in this case may seem extreme, gaming operators should use FinCEN's analysis of the deficiencies in this enforcement action to inform their own BSA/AML program. The deficiencies noted by FinCEN as the grounds for the $650,000 civil penalty included:

  • Numerous inaccuracies, misstatements and/or oversimplifications in its policies and procedures and outdated policies and procedures
  • Lack of suspicious activity red flags beyond structuring activity
  • Failing to conduct an adequate risk assessment
  • Lack of independent testing
  • Inadequate training, and
  • Failure to file nine suspicious activity reports

FinCEN's settlement and assessment refers to BSA/AML risk assessments as a ''fundamental component'' of a gaming establishment's internal controls. Gaming operators should ensure that they develop and regularly update robust risk assessments and that such risk assessments adequately address all BSA/AML risks.

Ballard Spahr attorneys advise clients in a range of industries, including gaming, on BSA/AML requirements with respect to risk assessments, program and policy development, training, testing and suspicious activity reporting, among other topics. We also assist clients in responding to and defending against administrative enforcement actions and investigations and represent companies and individuals targeted by the government for alleged BSA/AML violations.

For more information, contact Adrian R. King, Jr., Michael D. Fabius, Kevin D. Leitão, Beth Moskow-Schnoll, or the Ballard Spahr attorney with whom you work.

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