Identifying Money Laundering: A Guide for Casino Compliance Officers

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A compliance officer for a casino may suspect money laundering if an individual:

A. Invokes reporting requirements through a lump sum payment: Making a lump sum payment in cash, money orders, or traveler's checks, for example, may indicate an attempt to evade financial reporting requirements. For instance, in the United States, if an individual purchases or redeems chips with currency, wire transfers, or cashier's checks totaling $10,000 or more in a single day, the casino must file a Currency Transaction Report (CTR) with the Financial Crimes Enforcement Network (FinCEN). Therefore, a lump sum payment that is just below the reporting threshold may be an attempt to evade CTR reporting requirements.

B. Refers to casino associates by their first name: While referring to casino associates by their first name alone may not be indicative of money laundering activity, it could be a red flag if combined with other suspicious behavior. For example, if an individual appears to have a close personal relationship with a casino employee and seems to be engaging in large transactions with them, this could indicate collusion and potential money laundering activity.

C. Purchases a low volume of chips with cash and turns them in for a casino check: This activity, known as "structuring," involves an individual purchasing chips in smaller amounts than the reporting threshold and then exchanging them for a check or wire transfer, which may be used to further obscure the source of funds. Structuring may be indicative of money laundering activity because it is an attempt to avoid reporting requirements.

D. Requests to have winnings transferred to a bank account of a third party: This activity is known as "layering," and it involves moving funds through a series of transactions to obscure their origin and make it difficult to trace. In the context of a casino, this may involve an individual requesting to have their winnings transferred to a third party's bank account, which may be an attempt to distance themselves from the funds and avoid detection. Layering is a key stage in the money laundering process and is often used in combination with other methods.

Overall, it is important to note that these behaviors alone may not necessarily indicate money laundering activity. Still, they may raise suspicions and trigger further investigation by the compliance officer to determine whether the activity is indeed suspicious or not.