When Jennifer Shasky-Calvery, at the time the director of the Financial Crimes Enforcement Network (FinCEN), addressed attendees at G2E 2013, she brought a stern message to the industry. She called for a complete culture change in the industry with a dedication to rooting out financial crimes… or else.
Since then, Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance shortcomings have caused FinCEN to bring some civil and criminal enforcement actions against licensed casinos. To illustrate, of FinCEN’s five enforcement actions in 2016 to date, three came against casinos. This followed four FinCEN enforcement actions against casinos in 2015. So what will 2017 bring to the casino industry with respect to BSA/AML enforcement?
On October 3, 2016, FinCEN Acting Director Jamal El-Hindi blogged about FinCEN’s desire that casinos promote a “culture of compliance” with respect to BSA/AML issues. The post came just a day after a multimillion-dollar civil penalty against one Nevada casino and three months after another multimillion-dollar civil penalty against a casino based in Hawaii. Despite the penalties, El-Hindi wrote that casinos continue to improve their AML compliance efforts, noting that in 2010 casinos filed less than 14,000 SARs, but that by 2015, casinos had filed almost 50,000 SARs.
“Those numbers tell us that casinos are paying more attention to their AML responsibilities,” according to the acting director.
There is no question that casinos are very much front and center of FinCEN’s enforcement agenda. But will the BSA/AML enforcement trend against the casino industry continue in 2017? With the new Trump Administration set to appoint new, politically conservative leadership at Treasury and FinCEN, the expectation is that the aggressive and severe enforcement environment against the entire financial services industry (including casinos) will, at the very least, not worsen in 2017.
The best indicator of which way FinCEN will go in 2017 is who will be appointed FinCEN director by President-elect Donald Trump. Will that individual be an ex-prosecutor like the immediate past FinCEN chief, Shasky-Calvery, who, during her tenure, ratcheted up FinCEN’s enforcement caseload unlike any prior FinCEN chief? Or will that individual be a banker or other financial services industry professional that might take a more pragmatic, and noticeably less heavy-handed approach to perceived compliance shortcomings? Only time will tell.