Wynn Las Vegas Forfeits $130 Million in Landmark Settlement Over Illegal Money Transfers

Wynn Las Vegas, a subsidiary of Wynn Resorts, Limited, has agreed to a staggering $130,131,645 forfeiture to settle criminal allegations that it conspired with unlicensed money-transmitting businesses to funnel funds for foreign gamblers. Announced by the U.S. Attorney's Office for the Southern District of California on September 6, 2024, the settlement is believed to be the largest forfeiture ever by a casino based on admissions of criminal wrongdoing.

This agreement, formalized through a Non-Prosecution Agreement (NPA), comes as a resounding reminder of the need for heightened compliance in the casino industry. U.S. Attorney Tara McGrath minced no words: "Casinos, like all businesses, will be held to account when they allow customers to evade U.S. laws for the sake of profit." This sentiment reflects a growing regulatory pressure on gambling establishments to implement robust anti-money laundering (AML) measures and adhere strictly to the Bank Secrecy Act (BSA).

The settlement exposes systemic issues within Wynn Las Vegas (WLV) that allowed the casino to bypass conventional financial channels through third-party agents acting as unlicensed money transmitters. This practice enabled the evasion of both U.S. and foreign monetary transfer laws and reporting requirements, often catering to foreign high-rollers eager to sidestep scrutiny.

How It All Worked: Proxy Gamblers and "Flying Money"

The criminal activity outlined in the case involves multiple sophisticated schemes, including proxy gambling operations and a practice referred to as "Flying Money." Proxy gambling—where an individual, or "Human Head," would gamble on behalf of another patron—was rampant at WLV. The true gambler, often someone who could not risk conducting financial transactions under their own identity due to legal concerns, directed these "Human Heads" from behind the scenes. Wynn employees not only tolerated this behavior but facilitated it, turning a blind eye to laws designed to prevent the casino from being used as a hub for illicit funds.

The "Flying Money" scheme, on the other hand, involved unlicensed money transmitters moving funds between China and the United States through complex cross-border transactions. WLV patrons, unable to access significant amounts of cash in the U.S., used these money processors to collect large sums in the country, while wiring equivalent amounts of foreign currency abroad. Again, the casino facilitated these activities without proper scrutiny or reporting suspicious activity to the authorities.

A recurring theme in this settlement is WLV’s failure to adhere to the most basic AML protocols. Despite clear indicators that certain transactions merited closer inspection under the BSA, WLV repeatedly neglected to file Suspicious Activity Reports (SARs). For instance, the casino engaged in over $1.4 million worth of transactions for a patron who had been previously linked to proxy gambling and even denied entry into the U.S. for suspected criminal ties. Another individual involved in WLV’s operations had been convicted in China for unauthorized monetary transactions, yet the casino allowed millions of dollars in transactions without reporting any concerns.

These glaring compliance failures highlight a broader issue within the gambling industry—the tension between profit and regulatory adherence. By prioritizing the recruitment and financial satisfaction of foreign gamblers, WLV neglected its legal obligations under U.S. law, placing the casino at the epicenter of a complex web of illegal money transfers.

Wider Regulatory Implications: Will Other Casinos Take Notice?

WLV’s $130 million forfeiture is undoubtedly a cautionary tale for other casinos, particularly those that may be operating in gray areas of financial regulation. As noted by Christopher Davis of Homeland Security Investigations (HSI), the success of this investigation underscores the importance of law enforcement partnerships in "following the money" and ensuring that casinos do not become unwitting accomplices to criminal activity.

The case also highlights the increasing complexity of financial crimes in the globalized casino industry. Involving multiple jurisdictions, including Latin America and China, the illicit transactions at WLV illustrate the vulnerabilities that can arise when casinos, driven by profit motives, skirt the law to attract international high-rollers.

For compliance professionals in the casino industry, this case serves as a clear directive: rigorous adherence to AML protocols is non-negotiable. Casinos must prioritize robust monitoring and reporting systems to prevent similar breaches in the future. The Wynn case also demonstrates the dangers of outsourcing key financial transactions to unregulated third parties. Compliance officers should ensure that all agents and intermediaries are thoroughly vetted and comply with both U.S. and international regulations.

This settlement could also signal a broader regulatory crackdown. With a growing focus on international money laundering risks tied to the gambling industry, compliance officers should anticipate tighter oversight from agencies like the IRS and FinCEN, who are likely to intensify scrutiny on large-scale casinos with cross-border operations.

The Fallout and Moving Forward

The repercussions for Wynn Las Vegas extend beyond the financial penalty. The settlement raises serious questions about corporate governance and internal controls within Wynn Resorts, which must now rebuild trust with regulators and patrons alike. This case underscores the crucial balance casinos must maintain between maximizing profits and upholding legal and regulatory responsibilities.

While this case is a win for regulatory agencies, it also serves as a stark reminder that the casino industry, especially in an increasingly globalized world, is far from immune to the same compliance challenges faced by other financial sectors. Whether other major casino operators will take heed and tighten their own compliance measures remains to be seen.

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