Bicycle Hotel & Casino agrees $500,000 AML settlement

The Bicycle Hotel & Casino has agreed to pay $500,000 and undergo an “enhanced review” to resolve an investigation into alleged AML failures.

The Bicycle Hotel & Casino in Bell Gardens has agreed to pay $500,000 and undergo an “enhanced review” to resolve an investigation into alleged anti-money laundering failures. 

Under the terms of the agreement, the Bicycle agreed to pay the United States $500,000, which represents the revenue the casino made from the high roller. The casino must also implement additional review and reporting requirements to assure BSA compliance, including an audit by a third party and regular reporting to the US Attorney’s Office

The sttlement also requires the venue to cooperate with law enforcement in any additional investigations or proceedings arising from the conduct described in the agreement’s statement of facts.

Designed to the prevent future violations of federal law, the investigation into alleged breaches of AML provisions of the Bank of Secrecy Act and the partnership that operates The Bicycle Hotel & Casino, are said to revolve around the casinos failure to file Currency Transaction Reports and Suspicious Activity Reports for Casinos – required under the BSA, a law intended to thwart money laundering. 

According to a Non-Prosecution Agreement with federal prosecutors, the Bicycle accepted responsibility for failing to properly file reports for a foreign national who conducted millions of dollars in cash transactions at the casino in 2016. 

Federal prosecutors entered into the NPA in recognition of the casino’s efforts to strengthen its anti-money laundering programme, along with its acceptance of responsibility, cooperation with authorities during this investigation, and agreement to make a $500,000 payment.

As part of the NPA, the Bicycle admitted that a “high roller” Chinese national gambled at the casino approximately 100 times over an eight-month period in 2016, playing high-limit baccarat in a VIP room with huge sums of cash that on some occasions he transported to and from the casino in duffle bags. 

A statement of facts in the NPA also detailed some of the high roller’s marathon play sessions, such as one occasion where he withdrew $2m from his player account at approximately 2:45pm and played in a VIP room through 1:20am the following morning.

When conducting cash transactions, the individual is said to have relied on an assistant to conduct over $100m in cash-in or cash-out transactions on his behalf. The Bicycle admitted in the agreement that, from “at least” January 7 through to July 27, 2016, it improperly filed currency transaction reports in the name of the assistant when it should have referenced the high roller in those reports. The casino also failed to file any SARCs during this period.

Staff within the Bicycle informed senior management in July 2016 of the failure to file CTRs or SARCs in the high roller’s name, according to the statement of facts. The Bicycle then took various actions, including amending the CTRs to indicate that the cash transactions were done on the high roller’s behalf, regularly filing SARCs for the high roller based on the suspicious nature of his source of funds, supplementing its compliance department with additional staff and resources, and creating an anti-money laundering committee comprising members of senior management to meet regularly to discuss BSA compliance issues.

Under the BSA, casinos are required to implement and maintain programmes designed to prevent criminals from using the casino to launder the large sums of cash that illegal activity can generate.

The BSA also requires casinos to file reports documenting suspicious activity, such as efforts designed to avoid the filing of accurate currency transaction reports.