Hawaiian Gardens Casino, Inc.

The Financial Crimes Enforcement Network (FinCEN) today announced a settlement with and a $2.8 million assessment against Hawaiian Gardens Casino, Inc. d/b/a The Gardens Casino, of Hawaiian Gardens, California. The Gardens, a card club, admitted that it violated the Bank Secrecy Act's (BSA) program and reporting requirements and has agreed to future undertakings, including periodic independent reviews to examine and test its BSA Anti-Money Laundering (AML) program.

In 2011 and 2014, IRS examined The Gardens and identified significant BSA violations. Many violations uncovered in 2011 were left unaddressed in 2014, despite the IRS findings in 2011 and despite the fact that the Gardens' independent consultant identified many of these problems in 2013. From September 1, 2009 through the present, The Gardens failed to implement and maintain an effective AML program, failed to report large cash transactions, failed to file many suspicious activity reports (SARs), and failed to keep certain required records. The Gardens also failed in its responsibilities to use all available information to identify and verify customer information, and to determine occurrences of transactions or patterns that warrant the filing of a SAR. In addition to its casino surveillance, open source information, and other methods, The Gardens had customer information collected through its player club cards which are scanned and monitored by employees on an hourly basis. Because it did not use such information and tools at its ready disposal, 80% of The Gardens' SARs filed between January 1, 2013 and September 18, 2014 included at least one unknown subject. This allowed anonymous transactions and frustrated recordkeeping essential to identifying suspicious transactions and money laundering.

IRS examiners also identified employees complicit in assisting customers with structuring at the card club. One such employee was disciplined for assisting a customer's structuring in 2009 only for the IRS examiner to identify the same employee engaging in the same behavior in 2013. The Gardens continued to conduct business with patrons they themselves had identified as suspicious even after these customers repeatedly refused to provide identification information. One such customer, who remained unidentified, continued to game at The Gardens despite being the subject of 15 prior SARs and refusing to provide identification on at least three separate occasions. This same patron also used agents, also unidentified, for structuring and attempting to structure transactions.