The former ownership of the Nugget casino in Sparks has been hit with a $1 million civil penalty for “egregiously and willfully” violating anti-money laundering requirements, according to federal officials.
The Financial Crimes Enforcement Network, also known as FinCEN, today announced the penalty against Sparks Nugget Inc., the entity that owned the casino prior to its sale in 2013. FinCEN also detailed numerous shortcomings in the Nugget’s efforts to combat money laundering, which is governed by strict requirements from the Bank Secrecy Act.
FinCEN said in penalty assessment papers that, from 2010 through November 2013, the Nugget “willfully violated the (Bank Secrecy Act)’s program, reporting, and recordkeeping requirements.” FinCEN said it found the Nugget did not have an effective program for fighting money laundering, nor did it properly report suspicious activity or “secure and retain certain required records.”
The investigation from FinCEN, a bureau of the U.S. Treasury Department, came to light in February via court documents filed as part of a legal fight over the 2013 sale of the casino from the Ascuaga family to Wolfhound Holdings LLC. That matter has now been dismissed, according to Washoe County court records.
The Ascuaga family said today that it was “pleased” to see the fight with Wolfhound Holdings come to a close, issuing a statement on the matter that also addressed the investigation from FinCEN.
“As members of the Northern Nevada business community for over 60 years, we have always strived to operate with integrity and decency,” the Ascuagas said in their statement. “That being said, we understand the seriousness of the FinCEN assessment and are satisfied that this matter has been resolved.”
A spokesperson who emailed the family’s remarks to VEGAS INC could not comment further. A spokesperson for the Nugget could not comment, either.
Separately, the Nugget is in the process of changing hands once again: The casino said in February that it would be purchased by Marnell Gaming LLC. The deal hasn’t closed yet and still needs to be approved by gaming regulators.
News of the FinCEN investigation led Michonne Ascuaga, the Nugget’s former CEO, to resign from the Nevada Gaming Commission in February. At the time, a spokesperson for Gov. Brian Sandoval said he was not aware of the investigation when he appointed Ascuaga to the commission.
Sandoval has still not named a replacement to the state’s top gambling regulatory body.
Ascuaga has said that she was not the target of the investigation, and she is not named personally in either FinCEN’s public announcement or its penalty assessment.
But the bureau did detail a variety of ways in which it said the Nugget’s anti-money laundering efforts fell far short.
For example, a Nugget employee responsible for managing compliance with the Bank Secrecy Act was “routinely disregarded” by managers, the penalty assessment from FinCEN said. The assessment also said the Nugget suffered from a “blatant disregard” for anti-money laundering compliance, an attitude that “permeated all levels” of the casino, according to FinCEN.
The casino “committed sustained and consistent violations” of the Bank Secrecy Act, the bureau said.
Accordingly, FinCEN Director Jennifer Shasky Calvery did not mince words in the bureau’s statement announcing the $1 million penalty.
“Sparks Nugget had a systemic breakdown in its compliance program,” Shasky said in the statement. “Despite the fact that it hosted convicted embezzlers and had been repeatedly alerted to suspicious transactions by its own (Bank Secrecy Act) compliance manager, Sparks saw no need to re-think its (anti-money laundering) defenses.”
The casino is by no means the first Nevada gaming operator to face scrutiny over anti-money laundering efforts. Caesars Palace last year agreed to pay a total of $9.5 million in fines over money laundering failures, and Las Vegas Sands Corp. in 2013 agreed to pay $47.4 million to settle a money laundering investigation.