Florida DBPR Anti-Money Laundering Conference
ANDREW S. ITTLEMAN, ESQ., CAMS
1001 BRICKELL BAY DRIVE, 32ND FLOOR
MIAMI, FLORIDA 33131
T: 305.350.5690
aittleman@fuerstlaw.com
Session 2
“The Importance of Management in the
Casino AML Infrastructure”
Understanding Management’s Role in the Casino AML Environment Through the
Eyes of the IRS, and Why it Makes Good Corporate Sense for Management to be
Alert and Involved
Las Las
Vegas
Corp.
(LVS)
VegasSands
Sands Corp.
(LVS)
Las Vegas Sands Corp.’s Ongoing Investigations
1. Foreign Corrupt Practices Act (FCPA): DOJ and SEC
investigating allegations of bribery related to Sands China
Ltd.
Las Vegas Sands Corp.’s Ongoing Investigations
2. Money Laundering: DOJ and Grand Jury Investigating
Allegations of Money Laundering, Violations of Title 31
Related to:
United States v. Ausaf Umar Siddiqui
United States v. Zhenli Ye Gon
Other Noteworthy Money Laundering Cases
Anti-Money Laundering Programs for Casinos
31 C.F.R. § 103.64: Compliance Programs for Casinos should include, at a
minimum:
i.
A system of internal controls;
ii. Internal and/or external independent testing for compliance;
iii. Training of casino personnel; and
iv. An “individual or individuals” to assure day to day compliance.
“Off the Shelf” programs will not suffice;
instead, programs must “be commensurate
with the money laundering and terrorist
financing risks posed by the products and
services provided by the casino…”
Program must actually be implemented.
IRS BSA Examinations of Casinos
Components:
1. Initial Interview(s)
2. Systems analysis
3. Review of recordkeeping
- CTRCs/SARCs
- Cash-in/Cash-out
- Surveillance logs
- Casino accounting system
The “Initial” Interview
Announced via “appointment letter” (3494)
Letter requests the following personnel be present for the initial
meeting:
a. Vice President Finance;
b. Casino Controller;
c. Casino Manager;
d. Casino Cage Manager;
e. Director of Information Systems;
f. Title 31 Compliance Coordinator;
g. “Any others directly involved in Title 31
Compliance”
The “Initial” Interview
…continued
Types of questions:
The “Initial” Interview
…continued
Types of questions:
History of the casino and plans for the future;
Gross gaming winnings per year;
What gambling activities are offered;
Number of cage, pit and slot areas;
Operating hours;
Employee practices (e.g. hours and whether employees
may gamble on premises)
Additional Interviews
“The
examination
should
include
several
interviews…
Owners/operators, shareholders, directors, floor and cage managers, and
employees responsible for preparing currency reports and securing and
maintaining records pertaining to the reporting requirements under the
BSA should be questioned as to their knowledge and training of the BSA
recordkeeping and reporting violations.
Knowledge is one of the elements needed to prove willfulness with
respect to a violation of the regulations.”
However, lack of knowledge and training is no defense.
Organizational Structure of Casino
Note:
Most Currency transactions between the casino
and its customers take place at either the
gaming tables on the casino floor or the front
windows at the casino cage.
Variety of Casino Managers
Casino Manager (manager of casino floor)
Pit boss (supervisory authority over pit)
Floor person (supervisory authority over particular table(s))
Room managers (Keno, Bingo, Poker, etc.)
Casino cage manager(s)
Variety of Casino Managers
BSA/AML Information Flow
Board of Directors
Management
BSA/AML Compliance Department
Employees
(dealers, cashiers/tellers, pit clerks)
BSA/AML Informational Flow
1. Preserves the integrity of the casino’s
gambling operation;
- Ensures the employees are following Casino’s
internal gaming policies;
- Ensures the employees are being vigilant for
suspicious, unlawful activity.
2. Shields the casino from corporate liability;
3. Shields the board from individual liability.
How is Corporate Liability Established?
 Compare Sands to United States v. Wachovia:
• Was the Sands compliance program sufficient?
 Review the program to determine if it is
“commensurate with the money laundering and
terrorist financing risks posed by the products
provided by the casino…”
 Not a strict liability standard.
 May be pursued civilly and criminally.
How is Individual Liability Established?
Criminal: 18 U.S.C. § 1956(a)(1)-(3)
Government must establish knowledge that “the
property involved in a financial transaction represents the
proceeds of some form of unlawful activity,” and proof of
conducting the transaction
“to conceal or disguise” the
nature of the property or
to “avoid a transaction
reporting requirement
under State or Federal
law…”
How is Individual Liability Established?
…continued
 Shareholder derivative context: Negligent oversight and breach of
fiduciary duty:
 e.g. Stone v. Ritter, 911 A.2d 362 (Del. 2006); See also Sheldon Adelson
Shareholder Derivative Litigation
– Derivative plaintiff must show either (1) that the directors knew or
(2) should have known that violations of law were occurring and, in
either event, (3) that the directors took no steps in a good faith
effort to prevent or remedy that situation, and (4) that such failure
proximately resulted in the losses complained of...
– These types of allegations could be that the company lacked an
audit committee, or that the committee only met sporadically.
BSA/AML Information Flow
Board of Directors
Management
BSA/AML Compliance Department
Employees
(dealers, cashiers/tellers, pit clerks)
ANDREW S. ITTLEMAN, ESQ., CAMS
1001 BRICKELL BAY DRIVE, 32ND FLOOR
MIAMI, FLORIDA 33131
T: 305.350.5690
aittleman@fuerstlaw.com