California Casino Will Pay DoJ $500,000 To Settle Probe

  • The Bicycle Hotel & Casino will pay $500,000 to the Department of Justice.
  • This payment is due to the casino allowing incorrect suspicious activity reports to be filed.
  • Over the course of eight months, the casino had a customer handle over $100 million, and reported them incorrectly.

BELL GARDENS, Calif. - The Bicycle Hotel & Casino will pay $500,000 to the U.S. Department of Justice for failing to report suspicious behavior from a customer. The customer, who has not been named, is described as a Chinese national who visited the casino more than 100 times in eight months.

The customer would routinely swap millions of dollars in cash for chips, and vice versa after gambling.

Over the course of the eight months, this customer is estimated to have handled over $100 million. When customers convert more than $10,000 in cash to chips, casinos are required to report their actions to the U.S. Department of the Treasury.

The casino did report the actions, but used the name of the customer’s assistant rather than the name of the customer, which is a crime.

The obvious worry here is money laundering - a customer brings in an enormous amount of money, converts it to chips, gambles with it, and converts it back, thus washing it and making it “legal” winnings.

By filing the reports under the incorrect name, the casino could have allowed this person to launder money without repercussion.

The eight months in question took place in 2016, and the casino itself was raided in 2017 by law enforcement agents investigating money laundering.

Casino Will Tighten Policies

The $500,000 that will be paid to the Department of Justice is part of a non-prosecution agreement that also requires the casino to tighten up its anti-money laundering policies.

Johnny Griffin III, the attorney representing The Bicycle, put a positive spin on the deal, pointing out that the government had found no “systemic” faults in their gambling policies.

“I am pleased that the government, through its extensive and lengthy investigation, has determined and confirmed that there are no systemic faults within the Bicycle Hotel & Casino’s compliance and reporting programs,” Griffin said, per MarketWatch.

Intriguingly, this is not the first time the Bicycle Casino has been involved in money laundering probes.

In 1990, the casino was seized by the DEA and the IRS after an investigation revealed that the casino itself had been constructed using laundered drug money.

The casino was sold by the government at the time to a group of investors - presumably a group unrelated to those that constructed the casino with laundered money. In comparison to that punishment, it seems as though the Bicycle got off light this time.