Caesars Entertainment Hit With Money Laundering Probe

By - October 28, 2013
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Caesars Entertainment let it be known Oct. 21 that it is being investigated by federal authorities for possible money laundering. According to a letter from the Financial Crimes Enforcement Network at the Treasury Department, the government is looking into potential Bank Secrecy Act violations by Caesars.

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Because of this probe, investigators in Massachusetts may deny a permit for a new Caesars project in Boston. The company also stopped a hotel licensing deal in Vegas before any possible enforcement decision. These various legal problems have caused Caesar’s stock to drop about 33% from its all time high close in September.

The allegation was first reported in the identical SEC filing that Caesars had withdrawn from the deal above to develop a new casino at a racetrack near Boston.

Caesars got a report from the MA Gaming Commission that questioned the firm’s ability to be a possible partner in the state’s new gaming industry because of its partnership with Gansevoort Hotel Group. That company had partnered with Caesars to come up with a new boutique hotel that was once Bill’s Gambling Hall on the Vegas Strip.

Caesars has cut all ties with Gansevoort, which some US regulators say have ties with the mob in Russia. Caesars also has withdrawn from the upcoming casino bid in MA.

Regulators say that disciplinary action is possible. If any federal laws were violated, that could lead to several types of disciplinary action, according to Nevada gaming laws. Caesars noted in a recent regulatory finding that it is fully cooperating with federal and state investigators, as well as the Treasury Department.

This investigation involves the biggest owner in the country of casinos, and is coming just after a $48 million penalty for the Las Vegas Sands after the Treasury Department accused that hotel of money laundering. The government has ordered that Sands must review all of its anti-money laundering policies and file accurate reports with the US government that it is following the law.

Due to the large amounts of money that go through casinos every year, the biggest casinos are regulated similarly to large financial institutions and are fully subject to Financial Crimes Enforcement Network regulations. That federal department was supposed to draft new anti-money laundering laws after the recent Sands prosecution. Now, after the Caesars problem, that is even more likely to occur.