Wynn Resorts Settles $130M for Money Laundering Allegations

Wynn Resorts Hit with $130 Million Settlement Over Money Laundering Allegations

Wynn Resorts has found itself in hot water after a federal investigation revealed its involvement with unlicensed money transmitting businesses to circumvent financial regulations. Facing allegations of money laundering and misconduct, Wynn agreed to a staggering $130 million settlement, marking one of the largest forfeitures by a US casino for criminal wrongdoing. This unprecedented case underscores the critical importance of compliance in the gaming industry, where even the biggest names are not above the law.

The Settlement: A Landmark Case in Casino Compliance

Wynn Resorts’ $130,131,645 settlement stems from a Non-Prosecution Agreement (NPA) reached with California prosecutors on September 6, 2024. This agreement ends a decade-long investigation into Wynn Las Vegas (WLV) and its dealings with unlicensed money transmitters, which allowed the casino to bypass conventional financial systems and reporting requirements.

According to US Attorney for the Southern District of California, Tara McGrath, the case demonstrates that casinos will be held accountable when they prioritize profit over legal compliance. “Federal oversight seeks to prevent illegal funds from tainting legitimate businesses, ensuring that casinos offer a clean, thriving, and safe entertainment option,” McGrath stated.

Unlicensed Money Transmitters and Complex Schemes

The investigation revealed that WLV frequently contracted with third-party agents acting as unlicensed money transmitters to bring high-roller foreign gamblers to the casino. These agents facilitated complex financial transactions that bypassed traditional banking systems, moving funds through a web of companies, bank accounts, and nominees in Latin America before they landed in a WLV-controlled account in California. From there, the funds were transferred to the casino cage and credited to individual gamblers, effectively evading both US and foreign financial regulations.

One notable case involved independent agent Juan Carlos Palermo, who transferred $17.7 million in more than 200 transactions on behalf of over 50 casino patrons using multiple unlicensed money transmitting businesses. Such convoluted operations allowed gamblers to sidestep anti-money laundering laws, masking the origins of their funds.

Christopher Davis, Acting Special Agent in Charge for Homeland Security Investigations in San Diego, highlighted the collaborative nature of the investigation: “The success of this investigation is in part due to our partner agencies’ cooperation and dedication to seeing these long-term investigations through to bring justice to these companies and protect American financial institutions.”

Dubious Practices: ‘Human Head’ Gambling and ‘Flying Money’

The investigation uncovered additional schemes employed by WLV, including “Human Head” gambling, where individuals would gamble at the casino as proxies for others who wished to remain anonymous. These proxy gamblers often sought to avoid federal Bank Secrecy Act and Anti-Money Laundering regulations, exploiting the casino’s lax oversight to gamble without scrutiny.

Another illicit method identified was “Flying Money,” where money processors acting as unlicensed transmitters facilitated cash access for gamblers in the US who could not directly bring funds from countries like China. The processor would collect US dollars from third parties and deliver them to WLV customers, who then electronically transferred the equivalent foreign currency back to the processor’s foreign accounts. Both Human Head gambling and Flying Money bypassed required financial oversight, exposing the casino to severe compliance violations.

Failure to File Suspicious Activity Reports

The NPA also revealed that Wynn failed to file Suspicious Activity Reports (SARs) for numerous transactions that should have raised red flags. In one 2018 instance, WLV facilitated $1.4 million in financial transactions for a gambler linked to proxy gambling and suspected criminal affiliations. The player was previously denied entry into the US due to connections with organized crime, further highlighting the casino’s failure to adhere to federal laws.

Carissa Messick, Special Agent in Charge for IRS Criminal Investigation in Las Vegas, emphasized the gravity of the violations: “Federal laws that regulate the reporting of financial transactions are in place to detect and stop illegal activities. Deliberately avoiding Bank Secrecy Act requirements is a form of money laundering.”

A Wake-Up Call for the Gaming Industry

Wynn Resorts’ $130 million settlement serves as a stark reminder to the gaming industry about the consequences of non-compliance with financial regulations. The settlement not only penalizes Wynn for past misdeeds but also sets a precedent for how federal authorities will approach similar cases moving forward. As Wynn severs ties with implicated individuals and implements remedial measures, the company’s actions underscore the critical need for casinos to maintain rigorous compliance standards and transparency in all financial dealings. The industry must take this as a wake-up call: adhering to the law is not optional but an essential part of maintaining a safe and reputable gaming environment.