How To Launder Money By Buying Casino Chips

Jan 12, 2019 In the past, every casino could use their own colors for the various values of the chips, but that has become fairly standard over the years. White or blue chips are $1, red chips are $5 and can.

  1. In the past, every casino could use their own colors for the various values of the chips, but that has become fairly standard over the years. White or blue chips are $1, red chips are $5 and can.
  2. The texture of the casino chip is also very important. The face of the chip should be in good condition. Though most old chips would have a few scratches and nicks, they should not be very heavily damaged. Pay attention to the edges of the casino chips since this will show how much the chip has been used in the past.
  3. A woman is accused of buying chips at a Brisbane casino using $40,000 in dirty money, which raised suspicions and led to her being charged after a five-month police investigation. Police raided a.
  4. Jan 09, 2009 Money laundering accomplishes this in three steps: (1) getting the money into the financial system, called “placing,” (2) moving it around to hide the illegal taint, or “layering,” and (3) commingling it with legitimate funds, known as “integrating.”. Casinos used to make it easy to do this.
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News Releases

8/14/2009 Casino Industry Remains Vulnerable to Money Laundering Schemes

The Financial Action Task Force has issued a detailed report on the vulnerabilities of casinos to money laundering and perhaps even terrorist financing, though the FATF acknowledges that no specific instances of terrorist financing have been reported. The report, Vulnerabilities of Casinos and Gaming Sector, describes the money laundering risks of casino junkets and high-seas gambling, among other segments of the industry. High-seas gambling is virtually unregulated by many countries, even for ships registered to the countries. This report should be read by anyone in the casino industry with regulatory responsibility. There are a great many descriptions of activities that should be regarded as red flags, and which have been added to our red flag checklist. Here are a few useful examples:

  • Two or more customers frequently wager against one another on even-money games. When they cash out, they will obtain cash or a check in almost the same amount of chips they purchased.
  • Customer befriends/attempts to befriend casino employees.
  • Supposed winnings do not correlate with recorded winnings.
  • A loan shark finds people at casinos who are going into debt from losses and loans them money. When they cannot make payments on the illegal loans, they are coerced into assisting with money laundering schemes.
  • Two men purchased chips at a Belgian casino, then passed the chips to a third person who cashed them in for a casino check. The third person claimed to have won a large amount by gambling, but none of the parties gambled. Belgian police believed the men were disguising profits from human trafficking by claiming to have significant gambling winnings.
  • A criminal used illicit funds to purchase casino reward cards from legitimate customers at a U.S. casino. The cards increase in value with each visit and each gambling session, and the criminal traded the cards for gold coins at the casino’s store. An employee at the store was an accomplice.
  • A lawyer was sentenced in New Jersey for embezzling more than US $500,000 and laundering US $250,000 of it through an Atlantic City casino. The defendant wire transferred US $250,000 to the casino and arrived at the casino later the same day to launder the funds. He purchased casino chips and gambled for an hour on a roulette table losing US $10 000. He then cashed out the remaining US $240 000 into currency and left the casino

USA PATRIOT ACT MONITOR is published by Civic Research Institute, Inc., 4478 U.S. Route 27, P.O. Box 585, Kingston, NJ 08528, 609-683-4450, [email protected], as an update service for Money Laundering, Terrorism and Financial Institutions: Law · Regulation · Compliance · USA PATRIOT Act Monitor © 2004 Civic Research Institute, Inc. All rights reserved. Unauthorized copying expressly prohibited. The information in this publication is not intended to replace the services of a trained legal professional. Neither the editors, nor the contributors, nor Civic Research Institute, Inc. are by this publication engaged in rendering legal, accounting, or other professional services. The editors, contributors, and Civic Research Institute, Inc., specifically disclaim any liability, loss, or risk, personal or otherwise, which is incurred as a consequence, directly or indirectly, of the use or application of the contents of this publication.

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USA PATRIOT ACT MONITOR is published by Civic Research Institute, Inc., 4478 U.S. Route 27, PO Box 585, Kingston, NJ 08528, 609-683-4450, www.civicresearchinstitute.com, as an update service for Money Laundering, Terrorism and Financial Institutions: Law · Regulation · Compliance.
USA PATRIOT Act Monitor © 2005 Civic Research Institute, Inc. All rights reserved.

Casinos in the United States which generate more than $1,000,000 in annual gaming revenues are required to report certain currency transactions to assist the Financial Crimes Enforcement Network (FinCEN) of the Internal Revenue Service (IRS) in uncovering money laundering activities and other financial crimes (including terrorist financing).

Although Title 31, also known as the Bank Secrecy Act, was originally focused on financial institutions, criminal use of banking services located within casinos created a need for additional regulations that were specific to casinos. Because large sums of currency are transacted through slot machines, gaming tables, automatic change machines, retail operations and the cage (banks), and with high frequency, the regulations were targeted at transactions in excess of $10,000. Casino regulation has been a topic of debate, prompting the United States Senate to have a hearing before the United States Congress in which Title 31 topics were discussed through testimony by industry experts such as Grant Eve, CPA and partner at Joseph Eve, Certified Public Accountants and Ernest Stevens Jr., Chairman of the National Indian Gaming Association.[1]

Transaction reporting[edit]

Currency transactions that occur within a single Gaming Day (the normal 24-hour period that any casino uses for accounting and business reporting), whether the currency is paid into the casino, paid out, or exchanged (in the case of foreign currency exchanges), in excess of $10,000 requires the completion of a Currency Transaction Report (CTR, FinCEN Form 112) and must contain enough information to accurately identify the individual(s) transacting the currency.

For example, if a man walks into a casino and stops at the blackjack tables and buys into the game for $12,000 (using cash), a CTR must be completed by the casino and filed with the IRS. In this example, currency is paid into the casino in the form of cash and happened within the unique 24-hour Gaming Day of the casino.

Here is an example of a cash out transaction: the established Gaming Day of a certain casino begins at 1:00am and ends at 12:59am. At 6:30am, a woman takes $6,400 in slot machine tickets to the main cage of the casino and requests payment in all $20 bills. Later that day, at around 7:10pm, the same woman approaches another cash cage on the opposite side of the casino and exchanges $4,000 in blackjack chips for cash. Because $10,400 was paid out in cash to a single individual in a single Gaming Day, a CTR must be filed by the casino to report the Cash Out transaction, because it is above the $10,000 threshold.

Because multiple transactions are aggregated for the purpose of Title 31 reporting, casinos create tracking programs to identify large transactions and automatically aggregate them in real time to ensure that they are compliant with the regulations.

How To Launder Money By Buying Casino Chips

Suspicious activity[edit]

Many criminals, such as those interested in tax evasion and money laundering, have researched the Title 31 requirements and have created a number of strategies to avoid detection of their activities by circumventing the reporting requirements. When these activities are discovered, casino staff are required to file a Suspicious Activity Report (SAR, FinCEN Form 114) to report the suspicious activities. Because there are many types of suspicious activities, it is required that casino personnel receive Title 31 training to avoid penalty and remain compliant.

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Two of the most popular strategies for circumventing CTR reporting are structuring and minimal gaming.

Structuring[edit]

Because the $10,000 per gaming day CTR threshold is part of the Bank Secrecy Act, a criminal may seek to evade being recorded on a CTR by breaking a transaction over $10,000 into multiple smaller transactions, which is known as structuring. Single and multiple currency transactions in excess of $10,000 (in a single Gaming Day) are reported to the IRS. To track multiple transactions, many casinos record transactions as low as $3,000 (and lower) to ensure that they remain compliant with the CTR requirements. Again, criminals (including those interested in tax evasion) may break up their transactions into several, smaller transactions to avoid detection.

For example, conducting three transactions of $4,000 is more than $10,000, which is the threshold of reporting a CTR. If the casinos did not track multiple transactions, the individual might be able to circumvent the reporting of their transactions. However, because most casinos track transactions of $4,000 (and lower), structuring this $12,000 transaction into three, smaller transactions would not prevent a CTR from being filed. And, while it may be possible to break up $12,000 into 20 individual transactions of $600 each, casino personnel also maintains awareness of this tactic and would likely detect the numerous trips to the cage to perform similar transactions.

Minimal gaming[edit]

Another type of suspicious activity is related to money laundering, where a casino patron may put large amounts of money in play, but gambles very little before cashing out.

For example, a bank robber steals $50,000 from a large bank. Most banks mark cash with exploding dye or sequential numbering of the large bills. To avoid being apprehended, the bank robber needs to exchange the stolen money for money that cannot be traced back to the robbery. In this situation, a bank robber may put $1,000 in $20 bills into a slot machine and spin twice before cashing out. Whether the slot machine pays the bank robber in coins or a slot ticket is irrelevant because the traceable money is in the machine and the bank robber will effectively receive 'clean' or 'laundered' money.

How To Launder Money By Buying Casino Chips

Both of these situations are suspicious, as defined by Title 31 regulations, and require a completed SAR by the casino, within a specified period of time.

Involvement of Agents[edit]

Two or more individuals handling the same currency bankroll are commonly referred to as 'agents' by the casino. An example of this would be individuals purchasing chips and dividing them amongst themselves. Agents cashing out chips or making currency transactions on behalf of one another are also popular examples of agent activity. Since agents handle the same bankroll, they essentially become entities and their transactions must be recorded together. All parties involved in agent activity must submit proper identification and complete the required IRS forms when their COMBINED transactions reach over $10,000 in a gaming day. While agent activity can sometimes occur with legitimate transactions (e.g. a husband cashing out his wife's slot vouchers so she can continue to play), agent activity is highly suspicious because it allows individuals to structure their transactions below the $10,000 to avoid being documented to the IRS.

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Involvement of casino staff[edit]

It is illegal for an employee of the casino to assist a casino patron in circumventing the reporting requirements of Title 31. Such circumvention can include notifying patrons that they are nearing reporting thresholds, disclosing the time that the Gaming Day ends, and neglecting to report suspicious activity. A casino employee that has been found to have circumvented Title 31 can be assessed civil and criminal fines, in addition to incarceration.

References[edit]

  1. ^United States Senate Committee on Indian Affairs (November 17, 2011). 'The Future of Internet Gaming: What's at stake for tribes?'. One Hundred Twelfth Congress First Session.

How To Launder Money By Buying Casino Chips Online

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