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Former Operator of Gardena Casino Pays $1 Million Fine and Forfeits nearly $1.4 Million for Violating Federal Anti-Money Laundering Laws

Posted by Fay Arfa | Sep 01, 2016 | 0 Comments

LOS ANGELES– The former operator of the Normandie Club in Gardena has been ordered to pay a $1 million criminal fine and to forfeit nearly $1.4 million after pleading guilty to violating the Bank Secrecy Act by failing to report large cash transactions to federal authorities.

During a federal court hearing yesterday, United States District Judge S. James Otero imposed the sentence on the Normandie Club, a partnership that sold the casino last month after state gaming authorities revoked its license to operate the facility.

As a result of a plea agreement between federal prosecutors and the Normandie Club, the casino pleaded guilty in January to violating anti-money laundering provisions of the Bank Secrecy Act. The partnership specifically pleaded guilty to failing to maintain an effective anti-money laundering program and conspiring to avoid reporting to the government the large cash transactions of some of the casino's “high-roller” gamblers. Judge Otero ordered the Normandie Club to pay a $500,000 fine for each of the two counts, for a total fine of $1 million.

Judge Otero also ordered the Normandie Club to forfeit $1,383,530, which represents cash transactions in 2013 that were over $10,000 and were not reported properly to federal authorities.

Under federal law – specifically, the Bank Secrecy Act – casinos like the Normandie Club are required to implement and maintain programs designed to prevent criminals from using the casino to launder the large sums of cash that illegal activity can generate. For example, casinos must record and report to the government the details of transactions involving more than $10,000 by any one gambler in a 24-hour period.

“Our money laundering laws were enacted to prevent criminals from concealing the source of large sums of cash generated by illegal activity,” said United States Attorney Eileen M. Decker. “Casinos and cardrooms such as Normandie are cash-intensive businesses that are particularly attractive for use by criminals seeking to launder their ill-gotten gains, so they must be vigilant in meeting their obligations under those laws.”

In the plea agreement filed earlier this year, the Normandie Club admitted that its casino engaged independent gambling “promoters” to locate high-rollers and then steer those gamblers to the casino. As part of the conspiracy, “high-level personnel” at the casino, including the casino's president and chief operating officer, agreed to avoid reporting to the government the large sums of cash certain high-rollers would bring to the casino. According to the plea agreement, the casino avoided reporting transactions related to the high-rollers by submitting Currency Transaction Reports that named the promoter instead of the gambler, by “structuring” transactions so that they appeared to be less than $10,000, or simply by failing to record large transactions.

During one six-week period in 2013, a single high-roller won more than $1 million from another party at the casino, and the casino conspired to conceal the identity of that high-roller.

“This sentence demonstrates the government's ability to enforce the anti-money laundering laws used to ensure that certain high-rollers do not remain below the radar,” stated Anthony J. Orlando, Acting Special Agent in Charge for IRS Criminal Investigation. “In partnership with the U.S. Attorney's Office, IRS CI will continue to protect the United States financial system through the investigation and prosecution of individuals and organizations that attempt to launder their criminally derived proceeds.”

The investigation into the Normandie Club was conducted by IRS Criminal Investigation and the California Department of Justice's Bureau of Gambling Control. This case was handled by Assistant United States Attorney Christina T. Shay of the Violent and Organized Crime Section and Assistant United States Attorney John J. Kucera of the Asset Forfeiture Section.

USAO – California, Central Updated August 31, 2016

Central District of California DOJ / 16-204 / August 31, 2016

About the Author

Fay Arfa

Fay Arfa has the distinction of being Certified as a Specialist in two separate areas of law – Criminal Law as well as Appellate Law – by the California State Bar, Board of Specialization. The National Board of Trial Advocacy has also awarded her a board Certification in Criminal Trial Advocacy. ...


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