U.S. Treasury Fines Tinian Dynasty $75 Million

June 4, 2015


Tinian Dynasty Hotel and Casino ©2008 W. L. Doromal

The U.S. Department of Treasury Financial Crimes Enforcement Network slapped a $75 million fine on the Tinian Dynasty Hotel and Casino for violations of the Bank Secrecy Act and related regulations. FinCEN concluded that Tinian Dynasty willfully violated the BSA’s program and reporting requirements from 2008 through the present by failing to develop and implement an anti-money laundering program; failing to report transactions involving currency in amounts greater than $10,000, in violation of 31 U.S.C § 5313 and 31 C.F.R. § 1021.311; and failing to detect and adequately report suspicious activities and transactions in a timely manner, in violation of 31 U.S.C. § 5318(g) and 31 C.F.R. § 1021.320.

The assessment states that the Tinian Dynasty failed to develop and implement an anti money laundering program to assure compliance to the BSA.

From the assessment:
No member of Tinian Dynasty staff was delegated responsibility for day-to-day compliance with the BSA, and the Casino failed to develop and implement policies,procedures, and internal controls designed to ensure compliance with the BSA. Tinian Dynasty never conducted any independent testing of the Casino’s systems to ensure compliance and did not have sufficient procedures in place to detect or report suspicious transactions. Further, casino personnel were not trained in BSA recordkeeping requirements or in identifying, monitoring, and reporting suspicious activity.
The assessment: details the violations regarding the requirement to report transactions:
 "From at least May 3, 2012, through March 4, 2013, Tinian Dynasty engaged in a pattern of accommodating gamblers who desired to conduct transactions with large amounts of cash without the Casino reporting their transactions. During a criminal investigation, undercover agents, posing as casino patrons, told Tinian Dynasty’s Casino Manager and its VIP Services Manager that they planned to gamble large amounts of money and expressly requested that the Casino not report their gaming transactions to the government.  
On May 3, 2012, the VIP Manager, who was responsible for implementing casino marketing programs and servicing the Casino’s most valued customers, assured an undercover agent posing as the New York-based representative of a Russian businessman that his client could bring large amounts of currency and that the Casino would not file reports related to the client’s activity at the Casino. When two other undercover agents (“UCA-1” and “UCA-2”) arrived at the Casino on February 28, 2013, the VIP Manager and other Casino employees assisted them with the following transactions, each of which required the filing of a CTR:
  • On February 28, 2013, the VIP Manager assisted UCA-1 in purchasing a casino voucher in the name of UCA-2 for $30,000 in U.S. currency. Tinian Dynasty accepted the cash and did not file a CTR. 
  • On February 28, 2013, the VIP Manager assisted UCA-2 in purchasing a casino voucher for $15,000 in U.S. currency. Tinian Dynasty accepted the cash and did not file a CTR.
  •  On February 28, 2013, UCA-1 purchased a casino voucher in the name of UCA-2 for $40,000 in U.S. currency. Tinian Dynasty accepted the cash and did not file a CTR. 
  • On February 28, 2013, after gambling, UCA-1 and UCA-2 gave vouchers and chips to the VIP Manager in exchange for a casino voucher in the amount of $60,000 and $16,500 in cash. Tinian Dynasty conducted the transaction and did not file a CTR in connection with the $16,500 cash transaction. 
  • On March 2, 2013, UCA-1 purchased a casino voucher in the name of UCA-2 for $60,000 cash in U.S. currency. Tinian Dynasty accepted the cash and did not file a CTR. 
  • On March 2, 2013, UCA-2 purchased two casino vouchers, each in the amount of $20,000 for a total of $40,000. Tinian Dynasty accepted the cash and did not file a CTR. 
  • On March 4, 2013, UCA-1 exchanged $20,000 in U.S. currency for chips. Tinian Dynasty accepted the cash and did not file a CTR.
  • On March 4, 2013, the undercover agents exchanged chips and voucher for cash. Tinian Dynasty provided UCA-1 with $148,150 in U.S. currency and provided UCA- 2 with $80,480 in U.S. currency. Tinian Dynasty did not file a CTR for either transaction. 
The Casino Manager also provided detailed advice to the undercover agents posing as casino customers on how to conduct their transactions in a manner that would allow them to avoid having their transactions reported. Specifically, he advised them that whenever they did business in America, Australia, and New Zealand, they should keep their transaction amounts below $10,000. The Casino Manager termed this the “magic number” that would trigger a CTR filing. He further cautioned them that conducting several transactions at $9,900 would appear suspicious.
Concerning the final charge, violation to report suspicious activity the assessment states:
Before being indicted for BSA violations in May 2013, Tinian Dynasty had never filed a single Suspicious Activity Report. The undercover agents, while posing as Casino patrons, asked casino managers to allow them to make deposits to the Casino without the Casino filing any reports with the government regarding the transactions. The BSA explicitly defines attempts to avoid reporting requirements as suspicious activity that requires a Suspicious Activity Report to be filed. 31 C.F.R. § 1021.320(a)(2)(ii). Notwithstanding this requirement, Tinian Dynasty not only assisted the undercover agents in evading the BSA reporting requirements, but it failed to report the activity as suspicious.
The report concludes with the statement: FinCEN has determined that the penalty in this matter will be $75 million. (Read the report below.)

There are so many issues related to this employer of foreign workers. In addition to the investigation by the Department of Treasury there is an ongoing case that has been filed by the US Government against the casino in the US District Court of the Northern Marianas.

Yesterday the U.S. filed a notice to present intertwined evidence in its case that includes this finCEN assessment.

From the notice:
Evidence to be offered: 
a. Prior CTR filings with FinCEN
b. Failure to register junket operators with the Tinian Gaming Casino Commission 
c. Outstanding tax debt to the CNMI government 
d. Failure to pay wages to Dynasty employees during the time period of the charged conduct 
e. Representations to Bank of Guam of compliance with CTR 
f. Circulation of Anti-Money Laundering policies in 2004 and 2008 
g. Correspondence with FinCen in 2000 wherein FinCen definitely states that the Bank Secrecy Act applies to the Dynasty Casino
Will any of these outcomes impact the foreign workers?

The Notice



The Assessment

4 comments:

Anonymous said...

Close the place under the DOJ Asset Forfeiture Program and put it up for auction to find a more suitable owner. I did read in the complaint that the FEDS did include an "asset forfeiture notice", required under United States Code: Title 18a,Rule 32.2
Set an example for other businesses so they won't pull any more illegal activity and harm their employees as well. There is no excuse that this activity was allowed to happen. The big question is - what was the Tinian Gaming Commission doing all this time? Maybe the Federal government needs to explore that aspect as well. If anyone is concerned about the contract workers, use the fines to compensate them and send them home if necessary. They can return when the property has new owners. Hopefully this sends a message to Saipan as well.

Wendy Doromal said...

Thank you "Green Cards For All" for your message!

Captain said...

10:32, I totally agree. Hopefully the outcome of the trial will send a clear message to the other proposed investors on Tinian as well as Sunshine on Saipan.
Depending on the outcome of the trial and the sentencing on any convictions, may change some touted plans by Sunshine and others.
I suspect though that Sunshine plans will never come to a full realization.
A small Hotel/Casino most likely will evolve, or the Casino that is being readied for "training" may be the only Casino that will operate in conjunction with a small planned hotel.
This will cut losses in case of low customer base or if they get caught in any illegal schemes by the Feds. Sunshine can walk away and disappear in the night.

Anonymous said...

TDHC is getting punished for what Hong Kong entertainment overseas investment Inc. did in the past. Megastar is getting punished because of TCGCC, DPL, and CNMI division of Finance and CNMI lawmakers’ failure to assist them to have a new business license. TDHC is in a bad situation as it is brought to U.S district court. $75 million is almost half of the total TDHC property fined by U.S treasury can trigger TDHC to shut down. Tinian will suffer automatically in the long run. Do the CNMI governments have something to learn from here? Stop laughing and start helping to improve CNMI. The Saipan Casino Commissioner made a comment, “Feds are watching CNMI”. He did not elaborate when it started because he really has no idea. Money talks in CNMI.