MORTON - The Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Dept. recently issued a $250,000 civil penalty April 20 to Jackpot Junction Casino Hotel for violating Bank Secrecy Act (BSA) (internal financial control) regulations from April 2006 through May 2009.
To resolve the matter, Jackpot Junction consented to the civil penalty without admitting or denying determinations by FinCEN.
The penalty must be paid by three equal installments to the U.S. Department of the Treasury on May 15, 2001, July 15, 2011 and Sept. 15, 2011.
Jackpot Junction Casino had 1,116 slot machines, 20 table games, averages about 2,000 players a day, according to FinCEN.
The Lower Sioux Indian Community released a statement Friday regarding the FinCEN assessment against the Lower Sioux Community doing business as Jackpot Junction Casino Hotel.
"It is unfortunate that during the time of the allegations (2006 through 2009), the Tribe was experiencing political upheaval and certain management decisions were made not in the best interest of the Casino; we are now dealing with the civil money penalties imposed on the Casino as a result of," Tribal President Gabe Prescott said.
Brian Pendleton, General Manager of Jackpot Junction Casino said "the casino's improved Title 31 program requiring training and policies has helped in greatly reducing the fine which was imposed. The individuals involved during the time frame of April 2006 through May 2009 responsible for the alleged violations resulting in the FinCEN penalties are no longer employed by the Casino."
According to the assessment order, Jackpot Junction committed extensive violations of the anti-money laundering program and reporting requirements of the BSA and its implementing regulations from April 1, 2006 through May 28, 2009 while under the management of senior personnel who have since been replaced.
Despite such knowledge, the casino suffered from material deficiencies in multiple core elements of its anti-money laundering program, resulting in violations of currency transaction reporting and suspicious activity reporting requirements of the BSA, according to the order.
Not until May 2007 did the casino begin to implement controls for monitoring gaming chip redemption, according to the order.
Instances were identified where checks cashed in excess of $3,000 were not recorded on the monetary instrument log; checks and credit card cash advances were not appropriately recorded on the casino's monetary instrument log or multiple transaction log to assist with the aggregation of such transactions, according to the order.
In addition, there was a lack of controls to ensure property currency transaction report by casino forms (CTRC). CTRCs contained incorrect amounts due to the casino's failure to record all personal checks cashed and credit card cash advances, according to the order.
Until August 2007, Jackpot Junction failed to conduct sufficient training related to BSA record keeping and reporting requirements and the casino did not implement in-house BSA training programs tailored to job and departmental duties; instead, it relied exclusively on general training provided by the Internal Revenue Service's (IRS) Indian Tribal Government Specialists, according to the order.
In addition, the casino did not consistently maintain a record of employees that received training, according to the order.
Casino employees demonstrated a lack of understanding regarding CTRC filing requirements, according to the order.
Jackpot Junction did not have a BSA compliance officer from July 25, 2006 through Nov. 26, 2006; terminated its BSA compliance staff and did not replace them in a timely manner, according to the order.
During the period from April 2, 2006 through May 28, 2009, Jackpot Junction filed 699 CTRCs totaling $13.2 million. Of that, 180 CTRCs totaling $3.25 million were not timely filed. On average, reports were filed 80 days late, according to the order.
The casino's pattern of failing to timely file CTRCs impaired their usefulness by not providing law enforcement with more timely information related to transactions totaling more than $3 million.
In one instance, a player walked away from the table with more than $16,000 in chips, then cashed in $9,500 on one gaming day, and cashed the rest of the chips the next day. It appeared the player was structuring cash out transactions over two gaming days to possibly avoid the filing of a CTRC, according to the order.
Jackpot Junction opened as a bingo hall in 1984. Tables and slot machines were added in 1988.
(Fritz Busch can be e-mailed at firstname.lastname@example.org).