A U.S. District Court judge in the Commonwealth of Northern Mariana Islands has ruled that the U.S. Treasury can regulate, and their Financial Crimes Enforcement Network (FinCEN) can enforce anti-money laundering laws in that jurisdiction.
The decision comes in response to a motion by Hong Kong Entertainment, owners of Tinian Dynasty Hotel & Casino, to dismiss an indictment containing over 150 criminal counts; mostly for failure to file currency transaction reports or CTR’s. Additional charges include failure to maintain an effective anti-money laundering program, failure to file a suspicious activity report, and a single count of conspiracy. The charges were filed in November 2014.
In April of 2013 U.S. Attorney Alicia A.G. Limtiaco announced that a criminal complaint had been filed against Dynasty Casino manager Tim Blythe and Dynasty VIP manager, George Que for conspiracy to cause a financial institution to fail to file currency-transaction reports and causing a financial institution to fail to file currency-transaction reports.
District Court for the Northern Marianas Islands Chief Judge Ramona V. Manglona also issued a summons on April 24th requiring a corporate representative of Tinian Dynasty to appear in court.
On August 20, 2014 FinCEN announced that it has fined and permanently barred the former VIP manager, George Que from working in the industry. The action followed a sting operation using undercover agents posing as gamblers who exposed efforts by Que to help high-rollers avoid government detection of cash transactions over $10,000 each. Vouchers for $15,000, $30,000, and $40,000 were purchased from the casino by the undercover agents with no CTR reports being filed. Vouchers were used to purchase chips which were then exchanged for as much as $148,150 cash in one transaction.
A notice of forfeiture was filed along with the 2013 action stating that, “[the defendants] shall also forfeit all money and property involved in the transactions.” The notice includes four bank accounts with the Bank of Guam and the Bank of Saipan. The defendants “shall also forfeit the hotel located at One Broadway in San Jose, Tinian and a money judgment equal to the total amount of money involved in violation of the 31 U.S.C. §5324(a)(1) or conspiracy to violate 31 U.S.C. §5313(a).”
The Treasury Department’s Financial Crimes Enforcement Network put casinos under their jurisdiction on notice in early 2013 that they have the same reporting requirement as banks. Lawyers for Hong Kong Entertainment argued that because the U.S. Congress had not specifically authorized the Treasury to regulate casinos in the Commonwealth, they were not required to file CTR’s. Judge Manglona opined and ruled that the four and a half decades old U.S. Bank Secrecy Act applied to “the possessions of the United States.”