Title 31 Compliance / Enforcement for Casinos

FinCEN Extends Deadline for Adopting New CTR and SAR

2011-12-20T14:56:00.000-05:00

The Financial Crimes Enforcement Network (FinCEN) is announcing today that the deadline for financial institutions to utilize FinCEN's new Currency Transaction Report (CTR) and Suspicious Activity Report (SAR) for reporting purposes will be extended to March 31, 2013.

FinCEN will continue to accept submissions to its Bank Secrecy Act (BSA) E-Filing System that use the most current "legacy" forms (such as the CTR, CTR by Casinos, and industry-specific SARs) until the mandated use of the new reports in 2013. Hence, for a period of over a year, financial institutions will be able to file either the legacy forms or the new reports.

FinCEN expects that the clear benefits associated with the transition to a fully electronic reporting system will support mandating electronic filings of BSA reports as of the proposed date of June 30, 2012.

Full details here.

2011-12-05T13:28:00.001-05:00

“Compliance Alert2012!” Webinar Series Announced

Series Part 1: “2012 FinCEN and IRS Reporting Requirements –What You Will Need!”

Resort Advantage, therecognized leader in complete FinCEN and IRS compliance solutions for thegaming industry, along with industry experts from Casino Essentials, ConveyCompliance, Dowling Advisory Group and Regulatory Management Counselors arehosting a multi-part series of webinars discussing the critical FinCEN and IRSissues facing casinos as they prepare for managing compliance at theirproperties in 2012. Each session will address federal regulations, and theirrespective application to the gaming industry.

The first Series Part 1 Webinar, “2012 FinCEN and IRSReporting Requirements – What You Will Need!” will be held on December 8, 2011at 11:00 am (PST). At this webinar,attendees will learn about the new FinCEN and IRS compliance reportingrequirements for 2012 and how they will impact the regulatory procedures /controls within the four key areas of casino compliance operations:

Persons Doing Business at the Property
Forms Management / Electronic Submission
Staff Regulatory Knowledge
Reporting / Auditing

Specific topics will include:

State of the Industry
Changes to the SAR-C and CTR-C Form
Electronic form submission requirements and alternatives formeeting the requirement
New IRS penalties – Form 1042-S incorrect or late filings
Employee regulatory training impact
Creating a realistic timeline to comply

Webinar Registration Here

2011-12-02T13:07:00.000-05:00

Pending Changes to FinCEN CTR and SAR Reporting

As we reach the end of 2011 and head into 2012, FinCEN hasbeen working on modernizing and standardizing the process for submitting CTRand SAR forms for all financial institutions, including casino properties. This process changes not only thecontent of the forms, but it also affects how the forms are to be filed in thenear term, as well as the long term.

Deadline - September 30, 2011 - Though this deadline hascome and gone, properties that file CTR-Cs and SAR-Cs via paper hard copyshould be reminded that the most current versions of the FinCEN Form 103(CTR-C) and FinCEN Form 102 (SAR-C) are dated "March 2011"; olderversions of these forms are considered unacceptable by FinCEN if they werefiled after September 30, 2011. You can check the version of your forms bylooking in the upper left corner for the FinCEN version date "March2011". If you have not yet changed your CTR-C or SAR-C template to thecurrent version, click here to download the March 2011 versions for yourproperty's use going forward.

Note: If your property is currently filing CTR-Cs or SAR-Cselectronically through Resort Advantage eSubmission, then you will not have to do anythingadditional

Deadline - December 1, 2011 - The next significant changegoes into effect on Thursday, December 1, 2011. This change is related to howcasinos will file corrections or amendments to CTR-C and SAR-C forms. Whencorrecting or amending a previously filed paper form (e.g. hard-copy), filersmust check the appropriate "amendment" or "correction" boxat the top of the form and complete the balance of the form in its entirety,essentially creating a new, fully revised filing. Further, casinos should nolonger attach copies of previously filed reports to a corrected or amended formwhen mailing them in.

Note: If your property is currently filing CTR-Cs or SAR-Cselectronically through Resort Advantage eSubmission, then you will not have to do anythingadditional

However, if your property is still filing CTR-Cs via hardcopy printing and mailing, then you should closely review your process forfiling hard-copy corrections or amendments.

Deadline - June 30, 2012 - FinCEN's recent proposal that allreports required under the Bank Secrecy Act (BSA) are to be filedelectronically as of June 30, 2012, has the casino industry quickly moving toimplement solutions to address this requirement. Standardization of CTR and SARreporting across all financial institutions will result in more efficient andtimely analysis of filing data by FinCEN. Further, industry-specific versionsof the reports (e.g. CTR-X and SAR-X) will be replaced by universal versions:FinCEN Form 112 (CTR) and FinCEN Form 111 (SAR).

Under this proposal, casinos will be required to file 100%of its CTRs and SARs electronically with BSA after June 30th. The BSA websitewill continue to support a manual entry filing-by-filing protocol, but theclear desire is for properties with batches of CTRs and SARs to file themelectronically through a direct secure connection to FinCEN / BSA, such as thatprovided by Resort Advantage's eSubmission capabilities. This approach yieldsthe most efficient filing process, using a multi-step batchcreate/approve/submit protocol, as well as the most complete filing audittrail.

Note: If your property is currently filing CTR-Cs or SAR-Cselectronically through Resort Advantage eSubmission, then you will not have to do anythingadditional

More details on this transition will be provided in futureResort Advantage eNewsletters and upcoming Compliance Alert! Webinars.

FinCEN Electronic Filing Requirement Finalized

2011-11-01T11:12:00.001-04:00

In support of the Financial Crimes Enforcement Network's information technology (IT) modernization efforts, FinCEN submitted notices to the Federal Register that requested comments from law enforcement, the financial industry, and the public concerning the future constituent parts of the BSA reports. These notices did not propose any new regulatory requirements or changes related to current report requirements. They sought input on technical matters as FinCEN transitions from a system originally designed for the submission of paper forms to a modernized IT environment for electronic reporting. These updates have been finalized and approved by the Office of Management and Budget (OMB Control Numbers 1506-0064, 1506-0065, and 1506-0013).

Click Here For Details.

FinCEN Proposes Mandatory Electronic Filing of Forms

2011-09-26T12:10:00.003-04:00

September 14, 2011

VIENNA, Va. - In an effort to improve efficiency, reduce costs for the financial industry, and enhance the ability of investigators, analysts, and examiners to gain better and more timely access to important financial information, the Financial Crimes Enforcement Network (FinCEN) announced today a proposal that FinCEN reports required under the Bank Secrecy Act (BSA) be filed electronically as from June 30, 2012. Comments on this proposal are welcome for 60 days after its publication in the Federal Register.

More details here.

New FinCEN Form Address Requirements

2011-06-13T21:25:00.000-04:00

June 13, 2011

Today, FinCEN published an update to its Zip Code Validations for all BSA Reports.

As part of a joint effort to improve the quality of Bank Secrecy Act (BSA) data, FinCEN and the IRS have recently updated the validation of zip code fields to cover city, state, and zip code. The validation has been enhanced to verify that the city and state are consistent with the first five (5) digits of a U.S. zip code as assigned by the U.S. Postal Service (USPS). This is a change from the previous cross-validation of state and the first three (3) digits of the U.S. zip code.

Click here for the full release.

Self Exclusion Snafu Results in Property Fine

2011-03-24T11:24:00.002-04:00

Source: Pennsylvania Gaming Control Board

HARRISBURG, Pa., March 23, 2011 -- Currently, more than 2,200 individuals have self-excluded from Pennsylvania casinos.

In this instance at Presque Isle, the individual played slot machines for approximately 40 minutes and was paid a jackpot of $2,001.20. He then played slot machines for 20 more minutes. Only later did Presque Isle personnel notice the jackpot payment was to a self-excluded person. The casino subsequently reported the error to the PGCB's Bureau of Casino Compliance.

BSA Amendment - Reports of Foreign Accounts

2011-02-24T10:35:00.004-05:00

February 24, 2011

FinCEN has issued a final ruling to amend the Bank Secrecy Act BSA) regulations regarding reports of foreign financial accounts. The rule addresses the scope of the persons that are required to file reports of foreign financial accounts. The rule further specifies the types of accounts that are reportable, and provides filing relief in the form of exemptions for certain persons with signature or other authority over foreign financial accounts.

Finally, the rule adopts provisions intended to prevent persons subject to the rule from avoiding their reporting requirement.

The Effective Date of this rule is March 28, 2011.

Applicability Date: This rule applies to reports required to be filed by June 30, 2011 with respect to foreign financial accounts maintained in calendar year 2010 and for reports required to be filed with respect to all subsequent calendar years.

Click here for more details.

FinCEN Publishes 2010 Annual Report

2011-01-24T11:15:00.000-05:00

January 18, 2011

FinCEN has published it Fiscal Year 2010 Annual Report

Full Report Available Here

FinCEN Releases SAR Activity Review Report

2011-01-06T12:19:00.002-05:00

January 6, 2011

Today, FinCEN released the latest "The SAR Activity Review – By the Numbers" report notng SAR activity across industries up theourh June 30, 2010.

Click here to access the report.

Pennsylvania Property Fined For Underage Patrons

2010-12-17T12:29:00.001-05:00

PA Gaming Control Board Approves $47,000 Fine for Underage Patron ViolationsHARRISBURG, Pa., Dec. 16, 2010.

The Pennsylvania Gaming Control Board today fined Downs Racing. L.P., operator of Mohegan Sun at Pocono Downs, a total of $47,000 for three occurrences where persons under the age of 21 played slot machines.

The civil penalty was unanimously approved by the Board at its public meeting Thursday in Harrisburg as part of consent agreement between the Board's Office of Enforcement Counsel and Downs Racing.The Pennsylvania Race Horse Development and Gaming Act provides that it is unlawful for persons under 21 years of age to wager, play or attempt to play a slot machine or table game at a licensed facility.

This was the fifth occasion in which Mohegan Sun at Pocono Downs was fined by the Board for similar violations, the other four occasions occurring in December 2007 for $1,744.99, January 2009 for $5,000, September 2009 for $49,500 and September 2009 for $49,000.

Source: Pennsylvania Gaming Control Board

RA Wraps Up "Compliance Alert!" Fall Webinar Series

2010-12-03T11:32:00.001-05:00

IS YOUR COMPLIANCE PROCESS READY FOR 2011?

In the highly regulated gaming industry, remaining cognizant of current and future compliance requirements is imperative. Laws change regularly, and continued compliance with the regulations in the jurisdictions in which your company is licensed, as well as with all applicable federal laws, can be a daunting task.

With this in mind, Resort Advantage, Casino Essentials, Convey Compliance Systems, Inc., Dowling Advisory Group, and Regulatory Management Counselors, P.C. presented a three part series of seminars and webinars discussing the critical issues facing casinos as they prepare for managing their compliance processes in 2011. These sessions addressed essential federal regulations, and their respective application to the gaming industry.

The webinars are available for download on-demand at http://www.resort-advantage.com/events-news/events-webinars/fallcomplianceserices.html. Several gaming industry experts presented at these sessions including:

Thomas Peterman, Sr. Vice President, MGM Grand Hotel & Casino
David D. Waddell, Regulatory Management Counselors
Mindy Letourneau, Managing Director/Founder, Casino Essentials
James Dowling, Founder, Dowling Advisory Group
Brian Ferrilla, Managing Director, Resort Advantage
Jeff Cronin, Vice President, Convey Compliance Solutions

FinCEN Provides Guidance to Permit Sharing of SARs with Affiliates

2010-11-24T11:41:00.000-05:00

November 23, 2010

The Financial Crimes Enforcement Network (FinCEN) today released a final rule – Confidentiality of Suspicious Activity Report as well as an advisory, and two guidance documents, and a Notice of Availability of Guidance that together clarify and strengthen the scope of Suspicious Activity Report (SAR) confidentiality, and expand the ability of certain financial institutions to share SAR information with most affiliates.

“FinCEN’s SAR confidentiality regulations along with parallel best practices guidance on sharing SAR information, also issued today, promote the protection of SAR information while seeking to ensure that the appropriate parties, but only those parties, have access to SARs,” said FinCEN Director James H. Freis, Jr. “It is essential to the partnership between the financial industry and government that sensitive financial information reported to FinCEN be protected. As to the newly issued guidance, we believe that allowing information sharing among affiliates will help the financial industry protect itself from abuses of financial crime, be consistent with industry efforts to strengthen enterprise-wide risk management, and also promote the reporting of even more useful information to FinCEN and law enforcement investigators,” said Freis.

The regulations clarify the scope of the statutory prohibition against the disclosure by a financial institution or by a government agency of a SAR or any information that would reveal the existence of a SAR.

Complete details can be found here.

FinCEN Rules and Regulations Structure Changes

2010-10-20T01:47:00.000-04:00

October 18, 2010

FinCEN today announced the pending publication of the reorganization of its rules and regulations by centralizing them in their own new Chapter X of Title 31 of the Code of Federal Regulations (CFR). The rule streamlines the Bank Secrecy Act (BSA) regulations into general and industry-specific Parts, ensuring that a financial institution can identify its obligations under the BSA in a more organized and understandable manner. FinCEN has not made any substantive changes to the BSA rules.

More details here.

SAR Activity Review - October 2010

2010-10-19T01:51:00.000-04:00

SAR Activity Review, Trends, Tips and Issues for October, 2010 is now available.

Click here for report

FinCEN Proposes Cross-Border Regulatory Requirements

2010-09-27T20:28:00.000-04:00

The Financial Crimes Enforcement Network (FinCEN) today announced that it has submitted for publication in the Federal Register a notice of proposed rulemaking (NPRM) that would require certain depository institutions and money services businesses (MSBs) to affirmatively provide records to FinCEN of certain cross-border electronic transmittals of funds (CBETF). Current regulations already require that these financial institutions maintain and make available, but not affirmatively report, essentially the same CBETF information. FinCEN issued this proposal to meet the requirements of the Intelligence Reform and Terrorism Prevention Act of 2004 (IRTPA). For more information, please go to www.fincen.gov.

More details here

IRS Reaching Out To Casinos To Crackdown Quicker on Suspicious Gambling

2010-08-11T21:03:00.000-04:00

Realizing that Nevada casinos are a destination for many criminals rich from fraud, robberies or drug activity, the Internal Revenue Service has been reaching out to gaming operators, hoping to crack down quicker on suspicious gambling.

Employees are asked to use their judgment. IRS Nevada has suggested Casino employees "Google" customers to see if online news reports reflect any current criminal investigation into that person.

Complete story here.

Source: Reno Gazette

BSA E-Filing Service Desk Contact Info Change

2010-08-01T22:42:00.000-04:00

Effective July 31, 2010, the BSA E-Filing Service Desk toll free telephone number and email address will change. The new number is 1-866-346-9478 (Option 1) and the new email address is BSAEFilingHelp@fincen.gov. The old number will be disconnected on July 31, 2010 and a recording announcing the new number will not be available if this number is called.

Casino or Card Club Compliance Program Assessment

2010-07-06T20:56:00.000-04:00

June 30, 2010

FinCEN released a report that describes factors that a casino or card club may need to consider in assessing the effectiveness of its Bank Secrecy Act (“BSA”) compliance program. The BSA requires casinos and card clubs to develop and implement compliance programs tailored to their business activities and risk profiles. A casino or card club may not need to address each of the factors described in this document. Also, a casino or card club should not construe the factors below as exhaustive and the only ones required to be addressed:

I. Elements of a BSA Compliance Program
II. Criteria for Assessing a BSA Compliance Program
III. Basis for Revising a BSA Compliance Program

An effective BSA compliance program should reflect a casino or card club’s products, services, customer base, and geographical location. It is a sound practice for a casino or card club to periodically re-assess its BSA compliance program to assure sufficiency and effectiveness.

Casinos Improving, But Have A Long Way To Go

2010-06-26T19:25:00.000-04:00

By Jim Dowling, Dowling Advisory Group
June 25, 2010

Can you imagine all of the casinos in a state not filing a single Suspicious Activity Report (SAR) in a year? Or two? Or Three? That’s what’s happening in several states across the nation and federal regulators have taken note. Is this a case of See No Evil, Hear No Evil, and ‘Report No Evil’?

On June 23, 2010, FinCEN released the 14th “SAR Activity Review-By the Numbers” report with an analysis of Suspicious Activity Reports (SARs) that were filed by all bank and non-bank financial institutions for 2009 along with comparisons to prior years dating back to 1996. FinCEN breaks down SAR filings into four different categories: Depository Institutions, Money Service Businesses (MSBs), Casinos, and Securities and Futures Industry companies.

Historically, during difficult financial times, financial crimes increase and sometimes dramatically so. Newspaper reports and television coverage of huge Ponzi schemes and massive fraud cases are almost a daily occurrence. However, the 2009 FinCEN SAR data would indicate otherwise, assuming that financial institutions continue with the same due diligence in investigating and filing of SARs. Calendar year 2009 reflected the very first decrease in the filing of SARs since such records have been kept starting in 1996. Industry wide SAR filings decreased from 1,290,590 to 1,281,305. Overall this is a very modest decrease, but we must look further at the data to understand this decrease.

Depository institution SARs and MSB SARs, two categories that make up almost 98% of all SARs filed in 2009, accounted for all of the decreases. Depository institutions had a decrease of 12,254 SARs and MSB SAR filings decreased 1,243. Filings by the remaining types of institutions saw a slight increase in 2009 with the filings by casinos and card clubs up 931 (8%) nationwide. Considering the economic times and the rise in financial crimes, I think an 8% increase in SAR filings would be about right. As the saying goes though, the devil is in the details.

Looking at the SAR filings by casinos and card clubs as the regulators and law enforcement officials do may paint another picture though. For the first time ever, SAR filings in Nevada have exceeded those filed in New Jersey (2,808 to 2,151). Considering that Nevada has 358 casinos compared to New Jersey’s 15[1], law enforcement and IRS regulators have often questioned the compliance role of Nevada casino operators. Historically, New Jersey has filed 16,833 SARs to Nevada’s 11,553 over the last year. Rounding out the top five SAR filers are Louisiana 914 (43 casinos), Oklahoma 897 (111 casinos), and California 807 (185 casinos).

What’s not reflected in the FinCEN report, are the activities of the government’s SAR Review teams. Taking for example the SAR review team just for Los Angeles; they review more than 12,000 SARs per month from all filers in the county of Los Angeles. For many years, the SAR review team in Los Angeles has reviewed more SARs than any other review team in the nation (sorry New York, you are in second place). If we compare the high volume of SARs filed in Los Angeles County alone to the SARs filed for the entire state of California by casinos, law enforcement and regulators are left with one, possibly two conclusions. Either people do not conduct suspicious activity in California casinos or the casinos are not catching and reporting the suspicious activity.

Let’s take a broader view of SAR filings by casinos to see what else regulators may be looking at. In states that have casinos or card club gaming, 17 states filed less than 10 SARs for the entire year. Many of those states did not having a single SAR filed by casinos during 2009. In looking at the SARs that were filed by casinos, you will find similar issues found with depository institutions and MSBs, namely the completeness and quality of the SAR. There were 106 SARs that left the suspicious activity section blank and 595 did not specify the relationship of the person conducting the suspicious activity.

Casinos were ahead of the others in identifying an increase in check fraud. Casinos reported a 47% increase in suspicious activity relating to check fraud, as well as an increase in identity theft related issues. There were also notable increases in the categories of Large Currency Exchange(s) (24%), Money Laundering (21%), and a 22% increase in Unusual Use of Negotiable Instruments (Checks). However, 53% of all SARs filed by casinos and card clubs were file during the last three years. As you can see from the chart below, casinos and card clubs are on the right track, but have a long way to go.

The Dowling Advisory Group (DAG) provides Anti-Money Laundering and Bank Secrecy Act (AML/BSA) services to casinos, financial institutions and non-bank financial institutions such as Money Service Businesses (MSBs), foreign currency exchanges. The goal of DAG is to help clients improve compliance and avoid adverse regulatory actions and fines.

For questions about this article or services, contact Jim Dowling at Jim@dowlingadvisory.com or visit www.dowlingadvisorygroup.com

FinCEN - Restrictions on Mexican Financial Accounts

2010-06-22T10:32:00.002-04:00

June 21, 2010

FinCEN is advising U.S. financial institutions of a recent change in Mexican financial regulations applying to Mexican banks that could affect the operations of U.S. financial institutions.

The Mexican regulation will still allow certain transactions up to relatively low value thresholds. The regulations do not restrict non-cash transactions denominated in U.S. currency (e.g., wire transfers, ACH payments, credit card transactions, traveler’s checks, etc.). These new Mexican regulations are intended to mitigate risks of laundering proceeds of crime tied to narcotics trafficking and organized crime. The regulations state that the restrictions on U.S. currency transactions by banks with individuals will go into effect four business days after official publication on June 16, 2010. The restrictions on U.S. currency transactions by banks with legal entities and trusts will go into effect ninety (90) calendar days after official publication (on or about September 14, 2010).

View the complete regulation here.

Red Flags Rule

2010-06-10T21:13:00.000-04:00

May 2010

The casino industry is unique when it comes to the relationship operators have with their customers. Commercial and Native American casino operations across the United States have invested billions of dollars to establish safe, comfortable and secure environments for their patrons to enjoy a dynamic entertainment experience. In addition to world-class leisure amenities that are offered in the modern casino environment, the core service provided by casinos continues to be a secure and regulated gaming experience.

As a result of the unique nature of the casino environment, numerous laws categorize casinos as financial institutions and require reporting of various financial transactions, to prevent these businesses from being used by unscrupulous people for laundering money, evading taxation or funding criminal activities.

Casinos across the country have developed sound practices to ensure compliance with the anti-money laundering provisions of the Bank Secrecy Act/Title 31 and the Patriot Act. Despite the fact that casino operators have developed systems to ensure a safe experience, new regulations continue to be adopted that, if not complied with, could expose operators to regulatory fines and/or civil/criminal liability.

Starting in 2010, certain casino operators that offer specific types of financial accounts will be required to develop policies and procedures to prevent identity theft. According to a 2010 congressional report, identify theft is the fastest-growing type of fraud in the United States. In 2008, an estimated 9.9 million Americans were victims of identify theft, an increase of 22 percent from 2007. The Federal Trade Commission estimates that identity theft costs consumers approximately $50 billion annually. As a result, the FTC is implementing a new "Red Flags Rule" to seek assistance from businesses to prevent identity theft.

There is a lot of confusion within the gaming industry over these matters. The purpose of this article is to provide some clarity with regard to the changes in federal law, and to provide a general overview of the steps casinos should take to assure ongoing compliance.

Complete article available here.

Source: Global Gaming Business

Pennsylvania Gaming Control Board Fines Casino For Violating Self Exclusion Program

2010-06-04T20:40:00.001-04:00

April 7, 2010

The Pennsylvania Gaming Control Board fined Washington Trotting Association, operator of The Meadows Racetrack and Casino, $20,000 for allowing self-excluded persons to access the gaming floor and play slot machines.

The fine was part of a consent agreement between the Board’s Office of Enforcement Counsel and the operator of the Washington County casino. The civil penalties, unanimously approved by the Board at its public meeting Wednesday in Harrisburg, were for two incidents that occurred at The Meadows Racetrack and Casino between November 2009 and January 2010.

The Self-Exclusion Program, which began in late 2006, assists problem gamblers who choose to ban themselves from gambling at Pennsylvania casinos. Once a person is placed on the Self-Exclusion List, gaming facilities in the Commonwealth must refuse wagers from, and deny gaming privileges to, a self-excluded person, including issuance of a player’s club membership.

Read full story here.

Source: www.pgcb.state.pa.us

FinCEN Deputy Director Presents Gaming Industry AML Perspectives

2010-05-21T10:42:00.000-04:00

May 19, 2010

FinCEN's Deputy Director, Charles Steele testified before the House Committee on Ways and Means, and offered some perspectives on potential money laundering vulnerabilities in the traditional, brick-and-mortar gambling industry.

Complete presentation available here.

FinCEN Publishes SAR Activity Review For Casino Industry

2010-05-12T13:47:00.003-04:00

May 12, 2010

Today, the FinCEN Director Freis Announced the release of the 17th Issue of The SAR Activity Review – Trends, Tips & Issues. This report is focused on recent activity in the gaming industry.

Highlights of the Report include:

An Assessment of Suspicious Activity Reports Filed by Casinos and Card Clubs
Analysis of Inquiries from Casinos and Card Clubs Regarding Suspicious Activity Reporting Requirements
How Examiners Use BSA Data to Scope and Plan Casino Examinations
The SAR Activity Review – By the Numbers as a Resource
Sample Law Enforcement Cases
Issues & Guidance
Suggested Best Practices
Anti-Money Laundering (AML) Programs and Nevada’s Casino Industry – Training and the Methods Used for Detection of Money Laundering and Fraud (authored by: Thomas A. Peterman, Senior Vice President and General Counsel for MGM Grand Hotel & Casino, and Peggy Zimmer Jacobs, Executive Director—Casino Controller and Compliance Officer for MGM Grand Hotel & Casino)

Click here to access the full report.

FinCEN Encourages Benefits of BSA E-Filing

2010-04-20T10:39:00.000-04:00

April 16, 2010

FinCEN continues to encourage financial institutions to electronically file Bank Secrecy Act (BSA) reports, and has issued today a brochure that highlights the benefits of using the Bank Secrecy Act Electronic Filing System (BSA E-Filing). E-Filing BSA information increases the timeliness of data availability, reduces the cost of paper processing, and improves data quality.

Compliance Alert - Key Issues For 2010 : Series 2 Webinar March 24

2010-03-23T23:20:00.004-04:00

The Bank Secrecy Act
The "Red Flag Rules" provided for in the Fair and Accurate Credit Transactions Act ("FACTA")
The requirements mandated by the Office of Foreign Asset Control ("OFAC")
Certain IRS tax regulations

Click here for registration details

Compliance Update - Key Issues For 2010 - Webinar Series

2010-02-22T17:07:00.003-05:00

In the highly regulated gaming industry, remaining cognizant of current and future compliance requirements is imperative. Laws change regularly, and continued compliance with the regulations in the jurisdictions in which your company is licensed, as well as with all applicable federal laws, can be a daunting task.

With this in mind, Resort Advantage, Convey Compliance Systems, Inc., and Regulatory Management Counselors, P.C. present a three part series of webinars discussing the "Key Issues for 2010." Each 45 minute compliance webinar will address essential federal regulations, and their respective application to the gaming industry, including the Bank Secrecy Act, the "Red Flag Rules" provided for in the Fair and Accurate Credit Transactions Act ("FACTA"), and the requirements mandated by the Office of Foreign Asset Control ("OFAC"), and IRS tax regulations. Each webinar will also include a portion of time reserved for a question and answer session.

Series Dates:

Series 1: "BSA, OFAC, and FACTA - They're Not Mutually Exclusive, and Your Compliance Plan Shouldn't Be Either" February 25, 2010 - 11:00am PST

Series 2: "Compliance FAQ's - What Others in the Gaming Industry Are Asking" March 24, 2010

Series 3: "You Think Your Casino is Compliant - Will an IRS Auditor Agree?" May 5, 2010

Registration details can be found here.

FinCEN Seeks Members for Bank Secrecy Act Panel

2010-02-02T18:07:00.001-05:00

Jan. 29, 2010

The Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury Department, published a notice that it is seeking nominations of financial institutions and trade groups for membership on the Bank Secrecy Act Advisory Group (BSAAG). Membership is open to financial institutions and trade groups. New members will serve three-year terms and must designate one individual to represent that member at plenary meetings.

The BSAAG, which was created by the Annunzio-Wylie Anti-Money Laundering Act of 1992, includes representatives from federal regulatory and law enforcement agencies, financial institutions, and trade groups with members subject to the requirements of the Bank Secrecy Act (BSA). The BSAAG advises the Treasury secretary on the BSA’s operations and makes policy recommendations.

Based on current openings, FinCEN is seeking applications from the following sectors or types of organizations with experience working on the BSA:

State Governments (one vacancy)
Industry Trade Groups—Banking (one vacancy)
Industry Trade Groups—Casino (one vacancy)
Industry Trade Groups—Money Services Businesses (one vacancy)
Industry Trade Groups—Precious Metals, Stones and Jewels (one vacancy)
Industry Trade Groups—State (one vacancy)
Industry Representatives—Banking (three vacancies)
Industry Representatives—Money Services Businesses (one vacancy)
Industry Representatives—Securities/Futures (one vacancy)

Nominations are due Feb. 24. Applications may be mailed to Regulatory Policy and Programs Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183 or e-mailed to BSAAG@fincen.gov.

Check Your BSA and Title 31 Training Resources Before Signing Up!

2010-01-29T15:40:00.004-05:00

Source: Stringfellow Consulting

Horror Stories abound! When training is mandated by a Federal Agency, we all try to do the right thing and “train up”! FinCen says you must have formal training on Title 31 and the BSA...so we try!

All is not as it seems! Recently, in one of our seminars, 3...(that’s three) different organizations reported having registered and paid (1 group by check, the other 2 by credit card) for a seminar that was being presented at a well known casino in Las Vegas. The group that paid by check, and one of the groups that paid by charge thought to call ahead to make room reservations and get all their ducks in a row. When they reached the casino registration desk they were told “We have never heard of that seminar, and do not have it on our books”.

Let’s see....at $650 each, for those 6 folks, that makes a grand total (for registration at the “Seminar”, not including the Time and airfare) $3900.00 lost. Add that to the group that not only paid for their registration (2 at $650 each), but traveled to Las Vegas, to the Casino and were told the same thing as the other 2 groups (their loss was the $650 each plus airfare, car rental, per diem and hotel rooms) and you have a felonious and inexcusable happening. PLUS! The “consultant” still has your banking info and credit card numbers and has proven themselves to be quite disreputable! The clients cannot reach this person on the phone, they don’t get calls returned, and the address is a front for a post office box company!

Another day, another example: We were just recently told that a group had used another consultancy to get training in Title 31 / BSA other than Stringfellow (oh well! we feel you should be trained several times by several folks anyway!) Except, three weeks after the facility got the “other” training, they were on the phone and e-mail to usfor serious questions about a CTRC failure!! We helped them out, but gosh! Obviously, the trainer should not have been training in these subjects!

Moral of the story? Be very careful whom you choose to train you, and check them out in advance! As an auditor, we can tell you the same applies to Title 31 computerized systems.

January 27, 2010

FinCEN Publishes SAR Activity Review

2010-01-20T14:45:00.001-05:00

FinCEN's SAR Activity Review – By the Numbers is a compilation of numerical data gathered from Suspicious Activity Report forms filed by financial institutions. It serves as a companion piece to The SAR Activity Review - Trends, Tips & Issues, which provides information about the preparation, use, and utility of Suspicious Activity Reports.

By the Numbers generally is published twice a year to cover two filing periods: January 1 to June 30 and July 1 to December 31.

Click here for the July 1 - December 31, 2009 report.

Customer ID Rule - Address Confidentiality

2010-01-11T14:39:00.002-05:00

FinCEN has recently published guidance pertaining to customer identification (CIP) requirements as they relate to customers who are issued a post office box address as part of their participation in an address confidentiality program (ACP).

FinCEN authorizes the following exception to the requirement that a financial institution obtain a customer’s residential or business street address: a customer who participates in a state-created ACP shall be treated as not having a residential or business street address and a secretary of state, or other state entity serving as a designated agent of the customer consistent with the terms of the ACP, will act as another contact individual for the purpose of complying with FinCEN’s rules. Therefore, a financial institution should collect the street address of the ACP sponsoring agency for purposes of meeting its CIP address requirement.

Complete details can be found here.

FinCEN 2009 Annual Report

2009-12-21T11:10:00.001-05:00

FinCEN has made its annual report for 2009 available for download at this link:

http://www.fincen.gov/news_room/rp/files/annual_report_fy2009.pdf

FinCEN Updated Advisory: North Korea Government Agencies

2009-12-19T11:07:00.000-05:00

December 18, 2009

Re: North Korea Government Agencies' and Front Companies' Involvement in Illicit Financial Activities

VIENNA, Va. - The Financial Crimes Enforcement Network (FinCEN) today added an additional North Korean bank to its June 18 guidance to financial institutions regarding the involvement by Democratic People's Republic of Korea ("North Korea") government agencies and front companies in illicit activities. Based on new publicly available information, Kumgang Bank has been added to the list of North Korean banks. This update amends the FinCEN issuance of FIN-2009-A002, on June 18, 2009.

As further described in the guidance, the U.N. Security Council has called for enhanced monitoring of financial transactions, to prevent the financing of North Korea's nuclear, ballistic missile, and other weapons of mass destruction ("WMD")-related programs or activities. The Security Council's action, combined with the potential that North Korea will attempt to evade these financial measures, illustrates the increased risk that North Korea and North Korean entities, as well as individuals acting on their behalf, pose to the international financial system and financial institutions worldwide.

FinCEN Important Update for BSA SAR-C E-Filers

2009-12-08T21:40:00.002-05:00

On December 12, 2009, FinCEN will implement the second phase of the BSA E-Filing SAR Acknowledgements and Validation process. Phase I was implemented in September 2009 and provided BSA E-Filers with an acknowledgement of receipt for a submitted Suspicious Activity Report (SAR). Phase II applies data quality checks and will provide filers with information on the quality of their submissions for electronically filed SARs of all types: Suspicious Activity Report by Depository Institutions (SAR-DI), Suspicious Activity Report by the Securities and Futures Industries (SAR-SF), Suspicious Activity Report by Casinos and Card Clubs (SAR-C), and Suspicious Activity Report by Money Services Businesses (SAR-MSB). The BSA Electronic Filing Requirements have been revised to include the SAR Acknowledgement file record formats and SAR Validation error codes.

The BSA E-Filing system offers filers a self-enrollment feature to allow financial institutions to register to receive SAR Acknowledgement files when they are ready to begin using the error feedback provided. There is no enrollment deadline at this time; however, FinCEN strongly encourages filers to enroll to receive this critical feedback.

Please direct questions about the SAR Batch Validation process to the BSA E-Filing Help Desk at 1-888-827-2778 (option 6) or via email at BSAEFilingHelp@notes.tcs.treas.gov. The Help Desk is available Monday through Friday 8 a.m. to 6 p.m. ET. The BSA E-Filing homepage is located at http://bsaefiling.fincen.treas.gov.

Canada Money Launderer Shows Holes in Vegas Casinos

2009-12-01T21:33:00.000-05:00

November 17, 2009

Canadian Stanko Grmovsek admitted in a Toronto court earlier this year to making $9 million with a law school buddy in a 14-year illegal scheme. Court documents show he said he laundered some of it by gambling wads of cash on games like blackjack in Vegas's world-famous casino strip.

Complete article here.

Source: Reuters

G2E Conference Session Recap: Industry Progress With Title 31 Compliance

2009-11-23T11:26:00.002-05:00

Global Gaming Expo, Tuesday, November 17, 2009

Today a conference session was held to allow casino Compliance officers to hear from FinCEN and several of the industry's leading gaming properties on the progress / findings of recent Title 31 compliance audits around the country.

This panel discussion was moderated by Mr. Thomas Peterman, Senior Vice President & General Counsel, MGM Grand Hotel & Casino. The following panel members shared their experiences with their own recent audits as well as offered suggestions and guidance for properties that have not yet experienced a FinCEN audit:

Peggy Jacobs - Executive Director, Casino Controller, MGM Grand Hotel & Casino
Barbara Rose - Corporate Compliance Control Manager, Harrah's Entertainment, Inc.
Len Senia - Senior Regulatory Compliance Program Specialist, FinCEN, U.S. Department of the Treasury

A number of key findings were presented to the audience:

Having an automated system to manage FinCEN compliance / reporting was critical to a successful audit (i.e. Resort Advantage)
Obtaining access to patron transaction data in legacy systems (e.g. slot systems, patron mgt., etc.) is expected by FinCEN as it represents "auditable knowledge"
Addressing issues with PO boxes and incorrect SSNs for patrons in FinCEN forms needs to be a priority for properties
Effectively managing gaming day and calendar day reporting
Implementing a process to effectively maintain / secure investigation files for any patrons who have had SARCs filed including management of information gathered through ongoing research about the patron (i.e. internal sources and external sources of information)
Recent comments have been made regarding the sharing of SARC information among sister properties but no new guidance had been provided contrary to current guidance (casinos were not included in recent financial institution SARC guidance regarding the sharing of this information)

FinCEN Releases Updated FAQs For Casinos

2009-10-30T15:55:00.002-04:00

On September 30, 2009, FinCEN published its update to the Frequently Asked Questions for Casino Recordkeeping, Reporting, and Compliance Program Requirements.

This document provides guidance interpreting the requirements of the Bank Secrecy Act ("BSA") regulations1 as they apply to the casino and card club industries in the United States.

Click here for complete details.

FinCEN Publishes SAR Activity Review

2009-10-14T12:46:00.005-04:00

FinCEN has made avalable its October, 2009 Issue 16 SAR Activity Review, Trends, Tips & Issues publication.

Full publication can be found here.

FinCEN Remarks From ABA Money Laundering Enforcement Conference

2009-10-13T14:35:00.004-04:00

Source: October 13, 2009 FinCEN Director's remarks re: SARs in Casinos:

SAR Acknowledgements

Financial institutions recently requested the addition of acknowledgements to its SAR BSA E-filings. The ability to receive an acknowledgement file allows the institution to verify their submissions were loaded properly into the FinCEN internal database and also provides their regulators with additional verification of their submissions.

On September 12, 2009, FinCEN implemented a system to provide an acknowledgement to institutions when they file a SAR electronically through the BSA E-filing system. Specifically, the SAR acknowledgement will provide institutions with receipt of submission by providing acknowledgement files containing Document Control Numbers (DCNs) generated by the current system of record, WebCBRS. To allow time to modify their own systems and processes to accept the DCNs, BSA E- Filing users will be able to self-enroll to receive acknowledgements by form type when they are ready to receive and process the acknowledgement files.

Resort Advantage offers E-Filing options for casino FinCEN forms and assists properties with their registration for FinCEN E-Filing as well as the direct filing to FinCEN's servers from RA's Title 31 Accelerator compliance software suite.

Entire article can be found here.

Investigators Find Evidence of Trend in Casino Money Laundering

2009-10-09T14:08:00.004-04:00

October 4, 2009

The one-page advisory barely blipped on the media radar screen when it surfaced back in July.
But when the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury essentially puts the casino industry on notice over incidents of possible money laundering structuring, it's a safe bet it sent regulators scrambling.

The gambling industry is large and diverse and operates at varying levels of corporate and regulatory sophistication, but what FinCEN's investigators gathered gave pause to those who take casino money laundering seriously.

Although the location of the casinos wasn't disclosed, the incidents illustrated what some federal officials fear is a growing trend.

"Recent accounts from law enforcement and regulatory authorities allege that certain casino patrons may have conspired with casino personnel to structure transactions to evade (Bank Secrecy Act) reporting and/or recordkeeping requirements," the July 1 advisory states.

Read entire article here

Source: Las Vegas Review-Journal

FinCEN to Implement SAR Acknowledgements and Validations for

2009-09-13T12:00:00.001-04:00

The Financial Crimes Enforcement Network (FinCEN) will implement Suspicious Activity Report (SAR) Acknowledgements for Bank Secrecy Act Electronic Filing (BSA E-Filing) submissions. This functionality will give BSA E-Filers a Document Control Number (DCN) as an acknowledgement of receipt for a submitted SAR. Acknowledgements will be available for all SAR form types: Suspicious Activity Report by Depository Institutions (SAR-DI), Suspicious Activity Report by the Securities and Futures Industries (SAR-SF), Suspicious Activity Report by Casinos and Card Clubs (SAR-C), and Suspicious Activity Report by Money Services Businesses (SAR-MSB).

The BSA E-Filing system will offer filers a self-enrollment feature to allow them to register to receive SAR Acknowledgement files when they are ready to begin processing. There is no enrollment deadline at this time; however, FinCEN strongly encourages filers to enroll to receive this critical feedback.

See complete details here.

Use of Casino Slot Monitoring Data For CTRs

2009-08-15T16:28:00.000-04:00

Is a casino required to use customer currency transaction information contained in the casino's slot monitoring system for purposes of BSA currency transaction reporting?

For purpose of the BSA, FinCEN does not view customer "coin-in" and "coin-out" transactions at a slot machine or video lottery terminal to be reportable as currency transactions because they can represent so-called "recycled" coin transactions (i.e., casino customers typically engaging in transactions deriving from the same coins just won at electronic gaming devices). If a casino were to use "coin-in" and "coin-out" information in its slot monitoring system, it would distort and result in incorrect reporting of currency transactions. However, when a casino has knowledge of customer "paper money" transactions for slot club accountholders identified through its slot monitoring system, it must aggregate these with other types of "cash in" transactions of which the casino has knowledge and which are recorded on a casino's books and records to determine whether the currency transactions exceed $10,000 for a customer in a gaming day.

When a casino has knowledge of multiple currency transactions conducted by or on behalf of the same customer on the same day, it is required to treat those multiple transactions as a single reportable transaction for purposes of determining whether currency transaction reporting requirements have been met. Therefore, the conclusions that apply to the aggregation of two or more transactions involving the insertion of bills into slot machines also would apply to the aggregation of such transactions with other categories of "cash in" transactions.

It is not necessary to have personally observed the transactions; knowledge can also be acquired from a casino examining the books, records, logs, computer files, etc., that contain information that the currency transactions have occurred after the gaming day is over. Although FinCEN regulations impose no requirement to examine books or records merely for purposes of aggregating transactions in currency and determining whether to file a report on FinCEN Form 103, BSA requirements other than the requirement to report transactions in currency may obligate a casino to examine computerized records. A casino must report transactions that the casino "knows, suspects, or has reason to suspect" are suspicious and implement procedures reasonably designed to assure the detection and proper reporting of suspicious transactions. For casinos with automated data processing systems, automated programs for compliance with the BSA must provide for the use of these systems to aid in assuring compliance, including identifying transactions that appear to be suspicious conducted by customers using their magnetic club account cards at slot machines or video lottery terminals.

FinCEN Releases 2008 SAR Activity Review

2009-07-10T15:37:00.001-04:00

On July 7, 2009, the Financial Crimes Enforcement Network (FinCEN) released its latest edition of The SAR Activity Review - By the Numbers. This report provides a review of the Suspicious Activity Report (SAR) filings for 2008.

Section 3 of this report is dedicated to activity within casinos and card clubs during 2008.

View the Report details here.

FinCEN Advisory: Structuring by Casino Patrons and Personnel

2009-07-05T15:31:00.000-04:00

The following are excerpts from the July 1, 2009 FinCEN Advisory:

The Financial Crimes Enforcement Network ("FinCEN") recently received information from law enforcement and regulatory authorities that certain casino personnel may have complied with requests from patrons to evade, or provided instructions to patrons on how to evade, reporting and recordkeeping requirements under the Bank Secrecy Act ("BSA"). It appears that casino patrons and personnel may have engaged in "structuring" certain transactions to evade such requirements.

The BSA prohibits any person, for the purpose of evading the requirement to report currency transactions or evading recordkeeping requirements under the BSA, from causing or attempting to cause a casino not to file a currency transaction report, to file a currency transaction report with material misstatements or omissions, not to maintain records required under the BSA, or to maintain these records in a form that is incomplete or inaccurate.

FinCEN is issuing this advisory to remind casinos and card clubs that structuring is unlawful, and that such activity can give rise to significant civil and criminal penalties under the BSA. FinCEN is authorized to impose civil money penalties against casinos violating the BSA, and the U.S. Department of Justice prosecutes criminal violations of the BSA and related money-laundering statutes.

The complete Advisory can be viewed here.

FinCEN Guidance Clarifies 314(b) Information Sharing

2009-06-16T12:52:00.002-04:00

June 16, 2009 - The Financial Crimes Enforcement Network ("FinCEN") has issued interpretive guidance to clarify the application of the rule implementing section 314(b) (the "314(b) rule") of the USA PATRIOT Act (the "Act"). Specifically, this guidance clarifies that a financial institution (e.g. casino) participating in the section 314(b) program may share information relating to transactions that the institution suspects may involve the proceeds of one or more specified unlawful activities ("SUAs") and such an institution will still remain within the protection of the section 314(b) safe harbor from liability.

Section 314(b) permits two or more financial institutions and any association of financial institutions to "share information with one another regarding individuals, entities, organizations, and countries suspected of possible terrorist or money laundering activities." Section 314(b) establishes a safe harbor from liability for a financial institution or an association of financial institutions that voluntarily chooses to share information with other financial institutions for the purpose of identifying and, where appropriate, reporting possible money laundering or terrorist activity. To avail itself of the section 314(b) safe harbor, a financial institution must comply with the requirements of the implementing regulation, including provision of notice to FinCEN, taking reasonable steps to verify that the other financial institution has submitted the requisite notice, and restrictions on the use and security of information shared.

The SUAs listed in 18 U.S.C. § § 1956 and 1957 include an array of fraudulent and other criminal activities. Information related to the SUAs may be shared appropriately within the 314(b) safe harbor to the extent that the financial institution suspects that the transaction may involve the proceeds of one or more SUAs and the purpose of the permitted information sharing under the 314(b) rule is to identify and report activities that the financial institution "suspects may involve possible terrorist activity or money laundering." Therefore, to the extent that financial institutions share information related to possible money laundering activities, including those associated with the underlying SUAs, or related to possible terrorist activity, such information sharing remains within the protection of the rule's safe harbor, provided the aforementioned conditions are met.

Click here for details

Sycuan Casino Hosts IRS and FinCEN at Title 31 Seminar

2009-06-02T09:31:00.001-04:00

On Thursday, May 28, and Friday, May 29, the Executive Team at Sycuan Casino hosted a very comprehensive seminar covering the latest challenges and solutions within the Title 31 compliance arena for the gaming industry.

Members of IRS, FinCEN, IRS Indian Tribal Governments Office, Immigration and Customs Enforcement, Resort Advantage, AP-ID, Casino Essentials, Deloitte & Touche, and Sycuan’s own executive Management Team members provided 10 hours of real-life examples and thought-provoking content to the 150+ attendees who represented the most prominent Tribal casinos in the western US.

As a result of this session, Sycuan Casino further reinforced its position within the Tribal gaming industry as a leader in the use of technology to minimize their risk associated with all regulatory compliance requirements. Using tools including Resort Advantage Title 31 Accelerator, Convey Compliance Systems, AP-ID / Veridocs, and Total Recall Learning, Sycuan is setting the standard for Title 31 compliance management reporting and auditing.

BSA E-Filing Batch Validation Updates

2009-04-28T09:16:00.002-04:00

FinCEN will implement the second stage of its Bank Secrecy Act Electronic Filing System (BSA E-Filing) Batch Validation process at the end of July.

FinCEN has assessed the first stage, which permits all submissions that do not correspond to formatting requirements to be accepted with warnings, and has determined that the initial six-month period will not be extended.

Visit FinCEN here for more details.

FinCEN Customer CTR Educational Pamphlet

2009-02-24T13:39:00.002-05:00

The Financial Crimes Enforcement Network (FinCEN) has created an educational pamphlet, "Notice to Customers: A CTR Reference Guide," for financial institutions and their customers containing information on the currency transaction reporting (CTR) requirement.

Click here for the pamphlet.

Final Reminder – Current Mag Media Filers Must Transition to BSA E-Filing By December 31, 2008

2009-01-01T00:24:00.001-05:00

Any magnetic media submissions received after the December 31, 2008 deadline will be considered an indicator of non-compliance. CTR data on magnetic media that is post-marked before December 31, 2008 but received after January 1, 2009, will be processed but, due to a new security policy, not acknowledged via magnetic media. This deadline cannot be extended.

More Details Here

FinCEN Report: New Rule Dramatically Reduces Casino CTR Filings

2008-12-24T00:20:00.000-05:00

The Financial Crimes Enforcement Network (FinCEN) reported in its new study that the number of currency transaction reports filed by casinos (CTRCs) fell by more than a third after FinCEN reduced reporting requirements on certain categories of transactions that FinCEN had determined do not pose a significant risk for money laundering, terrorist financing or tax evasion.
The number of CTRC filings during the period from July 2007 through June 2008 dropped by 35 percent, or 285,000, after FinCEN issued a rule exempting jackpots from slot machines and video lottery terminals. FinCEN compared filings during the period from July 2007 through June 2008, with filings during the 12-month period preceding issuance of the rule. During the period from July 2007 through June 2008, the number of filings on cash out payments from jackpots on wagers in slot machines and video lottery terminals fell to 112,027, a decrease of 74 percent, from 426,325 during the 12-month period preceding issuance of the rule.

The drop in CTRC filings confirms the expected results of the rule change to promote more efficient allocation of resources by the casino industry and the government while effectively getting law enforcement information necessary to pursue the common goal of fighting crime, terrorist financing, and other illicit activity.

Excerpts from FinCEN release December 22, 2008

FinCEN SAR Activity Review November 2008 Edition

2008-11-23T14:44:00.002-05:00

FinCEN has recently published its latest SAR By The Numbers report which includes current SAR-C filing trends for casinos and card clubs.

Click here for details.

Resort Advantage Announces "SAR Risk Analyzer"

2008-11-14T18:24:00.004-05:00

With FinCEN heightening its expectations for Title 31 and AML compliance reporting for all US gaming properties, compliance executives are looking to leverage compliance management systems to reduce their risk of regulatory issues.

Resort Advantage, makers of the award-winning Title 31 Accelerator compliance software , has announced "SAR Risk Analyzer", the newest addition to its casino compliance software suite.

SAR Risk Analyzer provides gaming properties with the ability to quickly perform additional suspicious activity due diligence and avert potential fines during IRS audits. SAR Risk Analyzer uses advanced pattern recognition technology to assess historical patron transactions for suspicious activity (SAR) trends and scenarios. With SAR Risk Analyzer, casinos are now able to proactively identify suspicious activity patterns that would have been missed through traditional manual methods.

The innovative SAR Risk Analyzer is a proactive component of a “findings free” Title 31 audit environment at gaming properties.

Resort Advantage wll be at the Global Gaming Expo (booth #122) November 18-20, 2008

BSA E-Filing System - Important Updates

2008-11-02T19:51:00.002-05:00

On November 15, 2008, FinCEN will deploy new system enhancements to the Batch Validation process of the Bank Secrecy Act Electronic Filing System (BSA E-Filing). The goal of these enhancements is to improve BSA data quality by providing detailed error notifications to filers upon submission, which ultimately will facilitate more timely correction of data issues.

The new Batch Validation process will apply field and business rule validations to Currency Transaction Report (CTR), Designation of Exempt Persons (DEP), and Currency Transaction Report by Casinos (CTR-C) records and will ensure that submitted files meet the formatting requirements defined by FinCEN in the appropriate BSA E-Filing Requirements documents.

Click here for more details.

FinCEN Proposes New Organizational Structure

2008-10-26T19:59:00.001-04:00

The United States Financial Crimes Enforcement Network (FinCEN), as part of its efforts to make the administration of the Bank Secrecy Act (BSA) more efficient and effective, has published a proposal to simplify its rules and regulations by centralizing them in its own new chapter of the Code of Federal Regulations (CFR). The proposal would streamline the BSA regulations into general and industry-specific parts, ensuring that a financial institution will be able to identify its obligations under the BSA in a more organized and understandable manner.

"Making our rules more accessible, easier to research and easier to understand serves our important anti-money laundering mission by facilitating compliance by financial institutions. We write rules to protect our financial system and to provide our law enforcement and regulatory partners with critical information. We hope to make our rules easier to find, easier to read, and therefore easier to follow," explains James H. Freis, Jr, Director of FinCEN.

The proposal includes two structural changes to the organization of the BSA regulations. FinCEN regulations would be reorganized into a ‘General Provisions' part and then separate parts for each type of financial institution that has a BSA obligation.

Source: Bank Info Security

Casinos Continue to Be Vulnerable to Money Laundering

2008-10-14T18:36:00.001-04:00

The conviction in August of two former Bank of China managers and their wives in Las Vegas for money laundering and other crimes illustrates the continuing vulnerability of casinos to money laundering. U.S. v. Xu Chaofan, et al. (2:02-CR-0674-PMP (LRL)). Over the course of several years, the defendants facilitated the theft of $482 million from the Bank of China, established offshore shell companies, and laundered funds, including through accounts at several U.S. banks. They also deposited a total of $3.1 million to accounts at four Las Vegas casinos by check or with currency, including four checks totaling $2 million to an account maintained by one of the casinos in Hong Kong.

Click here for full article

Frequently Asked Questions on the New FinCEN CTR-C Form

2008-09-13T11:46:00.007-04:00

The following questions have been routinely asked by casino compliance department directors as it pertains to the new FinCEN Form 103 CTR-C released for production on September 1, 2008. The answers are provided for guidance below:

1. When will the final production version of the CTR-C hard copy layout be provided?

The link provided on the FinCEN website is the final version, no more changes to the layout will be made. The “for planning only” is probably not the best language to use, but FinCEN did not want people to start printing this out and submitting.

2. When will the final production version of the CTR-C BSA e-filing file format be provided?

The link provided on the FinCEN website is the final version. No more changes are planned to the layout.

3. What is the soonest date and the latest date that casinos can use the new CTR-C hard copy format?

Casinos can use the new hard copy format September 1, meaning they can begin submitting the new form starting September 1st. They can continue to submit the “old”/current version until March 31, 2009.

4. What is the soonest date and the latest date that casinos can use the new CTR-C BSA e-filing file format?

Same as above. FinCEN will turn on their system to accept the new file format on September 1st. The FinCEN system will continue to accept the old/current format until March 31st, 2009.

5. When are casinos expected to begin collecting transaction data to be used to populate field 31h (e.g. Bills inserted into gaming devices) on the CTR-C forms?

When they are able to start filing on the new form/file, that is when they would start entering that information.

Note: This information is provided as a guideline and is not meant to represent the most current FinCEN regulation requirements. For official responses and clarifications to these questions, contact your FinCEN representative.

Revised CTR Form for Casinos and Card Clubs Effective September 1, 2008

2008-09-01T11:42:00.000-04:00

Effective September 1, 2008, casinos and card clubs are required to file Currency Transaction Reports using a revised form. FinCEN announced in April that it was revising FinCEN Form 103, the Currency Transaction Report for Casinos and Card Clubs (CTR-C). This revision incorporates regulatory changes and accommodates database-programming requirements.

Additionally, FinCEN has issued revised specifications for casinos and card clubs who wish to electronically file (E-File) the revised form.

FinCEN Issues Extensive Casino Red Flags

2008-08-02T12:45:00.001-04:00

August 1, 2008

Today, FinCEN issued its guidance publication called "Recognizing Suspicious Activity - Red Flags for Casinos and Card Clubs"

This guidance is intended to assist casinos and card clubs with the reporting of suspected money laundering, terrorist financing and related financial crimes.

Clarification of Amended CTR-C Reports

2008-07-23T21:24:00.003-04:00

July 22, 2008

FinCEN has expanded the section titled “How to file amended CTRC’s to invalid files” section, please see page 9 of the revised Requirements Specifications document that will be Effective August 2008.

Click here for details

FinCEN Announces Details on Intended Retirement of BSA Magnetic Media Filing Program

2008-07-21T21:33:00.001-04:00

July 21, 2008

In keeping with its efforts to make Bank Secrecy Act (BSA) filing requirements more secure, efficient, and effective, the Financial Crimes Enforcement Network (FinCEN) today announced its intention to retire the BSA Magnetic Media Filing Program. Current Magnetic Media filers must transition to BSA Electronic Filing (E-Filing) no later than December 31, 2008.

Click here for more details.

Suspicious Activity Reports: Perceptions & Reality in Anti-Money Laundering Investigations

2008-06-20T13:32:00.000-04:00

This is an excerpt from an interview with BSA Investigator Kevin Sullivan as published in CU Info Security on June 18, 2008

At the heart of the Bank Secrecy Act (BSA) and the core of any good Anti-Money Laundering (AML) program is the Suspicious Activity Report (SAR), which all financial institutions - banks, credit unions, brokers, casinos, insurance companies, etc. - must file when confronting questionable transactions. Between FinCEN's guidelines on SAR reporting and the new FFIEC manual written guidelines, all these rules are now available and it is less of a guessing game than it used to be.

CU Info Security : Now, you have spent years in anti-money laundering investigations, what do you find is most misunderstood about SARS?

SULLIVAN: I think the concept that drops the drawer of most bankers I talk to is the fact that law enforcement actually does read the SARS. We find them very valuable with providing us with intelligence. Usually we investigate a crime and then try to find the assets, however with SARS we are able to do what we call reverse engineering. That is where we take the situation and now we are finding the money and are looking to discover what crime was committed.

CU Info Security : Now, Kevin you have been in this business a long time. How many SARS would you say you review in the course of a month?

SULLIVAN: We look, at the New York HIFCA where I'm assigned at, we only look at the BSA SARS and we read over 4,000 BSA SARS each month. Of the 4,000 we try to use a filtering process and we narrow it down to maybe a couple hundred that we can do some enhanced due diligence on and then at the end of the month we try to have it down to about maybe 35-40 SARS that we are actually taking active looks at.

CU Info Security : So you see a lot of these Kevin, I am sure that there are some bad habits that emerge form these. What are some of the worst traits that you currently see in the SARS that you review?

SULLIVAN: I must say that the SARS really have dramatically improved over the last several years. However, if I were to put my finger on it I would say that incomplete narratives are probably the largest common mistake. For a long time there were just so many conflicting concepts about what to put into the narrative.

Of course as the institutions, the regulators and law enforcement each put their two cents in, some better guidelines were eventually crafted and hence the FinCEN Report and the FFIEC Manual.

CU Info Security : You deal with an awful lot of SARS in your business, you've been in the anti-money laundering business for a long time. When it comes to SARS what would you say is the most frequently asked question that you get?

SULLIVAN: "Do you guys read them?" That, hands down by far, do you guys read them, meaning law enforcement. "Do you guys in law enforcement read these things?" Because that is the perception out there, is that nothing ever happens. Well, we read every one of them and we have to have human eyes on it because we can't use software because every institution writes the narrative a little differently, so no software can pick up on it. We have to have human eyes; a human experience and human skills look through it and decide if it is something that we want to proceed with.

And, sometimes we can't call you up and tell you we have a case going on. First of all, we can't share information, and secondly we may be looking at other things and we can't talk to you about it. But sometimes you do get the phone call, I'll give a call to one of the bankers and say I read one of your SARS and I am interested in this case and then we have to get the nurse up thee because he just had a coronary because he cant believe that law enforcement actually called him on it, but we are doing more of that also. You are seeing more and more law enforcement dedicating to looking at the SARS now because we have realized this is just a wealth of possible leads for us.

FinCEN Releases 2008-2012 Strategic Plan

2008-06-18T13:50:00.000-04:00

The Financial Crimes Enforcement Network views strategic planning as an ongoing leadership activity crucial for maintaining organizational effectiveness and relevance. Our strategic plans serve as the foundation for operational planning, day-to-day management, and ongoing assessment of our accomplishments.

View the FinCEN 2008 - 2012 Strategic Plan here:

http://www.fincen.gov/news_room/rp/files/strategic_plan_2008.pdf

FinCEN SAR Activity Review - Issue 10 Available

2008-06-04T14:27:00.002-04:00

FinCEN has made its most recent "SAR Activity Review - By The Numbers" report available on its new website. Issue 10 dated May 2008 can be found at:

http://www.fincen.gov/news_room/rp/sar_by_number.html

FinCEN Launches New Website; Casino-Specific Subsite Now Available

2008-05-14T13:25:00.004-04:00

Emphasizing its commitment to providing quality feedback and useful information to both the users and providers of Bank Secrecy Act (BSA) information, the Financial Crimes Enforcement Network (FinCEN) today launched a redesigned and enhanced website.

FinCEN's redesigned website has a standardized format and restructured navigation by industry to make it easier for users to find information quickly. In particular, casinos now have their own subsite dedicated to the issues surrounding BSA compliance in the gaming industry.

Click here to access the casino-specific FinCEN subsite

"Quick links" have been added to the right side of most pages to allow for fast navigation to useful supplemental information. Based on feedback from the industry, some of the most-requested information is now listed on the homepage and other items are more efficiently and intuitively categorized.

May 14, 2008

New CTR-C FinCEN Form 103 Version

2008-05-06T13:23:00.003-04:00

Per FinCEN's recent "Special Notice CTRC Posting", database improvements that FinCEN has planned for June 2008 may require more programming than originally envisioned.

As a result, FinCEN has decided to extend the use date of the current CTR-C Form 103 until September 1, 2008. The new form will be required to be used after that date.

Click here for details

Title 31 Compliance At National Indian Gaming Association Trade Show

2008-04-16T17:28:00.006-04:00

Resort Advantage has teamed up with AP-ID, the ID-Authentication experts, to present their complete integrated Title 31 compliance management solution at the upcoming National Indian Gaming Association (NIGA) trade show in San Diego.

Attendees will be able to visit Booth No. 1020 to learn all about the most advanced Title 31 compliance management system for casinos in the industry. With electronic filing support for the FinCEN reporting requirements and the immediate validation of patron IDs and OFAC compliance confirmation, this solution will dramatically reduce the risk associated with maintaining BSA compliance.

The NIGA conference exhibition takes place Tuesday, April 22 and Wednesday, April 23 at the San Diego Convention Center.

World Series of Poker - Title 31 Reportng Requirements

2008-04-08T12:08:00.001-04:00

Those that are paying money for the World Series of Poker in the form of cash are required to produce their individual Tax Payers Identification Number. This is applicable for those that are making a buy in for values more than $3000. This is in accordance with Title 31. Players that do not have an ITIN are required to buy an ITIN to avoid rejection of participation due to such issues.

Cayman Labelled 'Major Money Laundering Country'

2008-04-01T10:16:00.003-04:00

Source: Cayman Net News

A major US government report has included the Cayman Islands in a worldwide list of major money laundering countries.

The 2008 list of major money laundering countries includes all countries and other jurisdictions whose financial institutions engage in transactions involving significant amounts of proceeds from all serious crime.

Globally, major countries like Australia, Canada, China, France, Germany, India, Israel, Italy, Japan, Russia, the United Kingdom and the United States all find themselves listed.

The report identifies the Cayman Islands as home to a well-developed offshore financial centre that provides a wide range of services, including banking, structured finance, investment funds, various types of trusts, and company formation and management.

In the 2006/7 financial year, 219 Suspicious Activity Reports (SAR) were filed and, as of August 2007, nine requests for information from outside the Cayman Islands had been dealt with and seven disclosures to foreign law enforcement organisations had been prepared.

The report also states that there have been five money-laundering convictions in the Cayman Islands since 2003 and over US$120 million in assets has been frozen or confiscated in the same period.

April 1, 2008

Harrah's Announces World Series of Poker Rules Change to Comply With Title 31 Requirments

2008-03-07T10:36:00.002-05:00

LAS VEGAS, March 4, 2008 /PRNewswire via COMTEX/ -- HET news PowerRating PR Charts -- Harrah's Entertainment, Inc. said today individuals who pay cash to register for certain events at the 2008 World Series of Poker Presented by Milwaukee's Best Light will be required to provide Social Security or Individual Taxpayer Identification Numbers (ITINs).

The requirement, a direct response to Title 31 of the United States Code that became effective for Nevada last July, will be imposed on individuals who pay cash for events with buy-ins of $3,000 or higher or whose cumulative cash wagers and buy-ins exceed $10,000 a day.
Players who do not have an ITIN may apply for one at the following link: http://www.irs.gov/pub/irs-pdf/fw7.pdf.

They also may apply at the International Players concierge window in the tournament area at the 2008 WSOP, which will be held at the Rio(R) All-Suite Hotel & Casino May 30 through July 16. WSOP personnel will help players fill out and file ITIN requests.

FinCEN Releases Ninth Issue of SAR Activity Review - By The Numbers

2008-02-11T15:22:00.000-05:00

VIENNA, Va. - The Financial Crimes Enforcement Network issued today the latest edition of the SAR Activity Review - By The Numbers.

This report presents a compilation of numerical data gathered from Suspicious Activity Reports (SARs) filed through the first six months of 2007. While this report does not analyze specific trends, changes in the reporting of some suspicious activities are of note and will be of interest to financial institutions, regulatory, and law enforcement agencies.

To view the entire press release and report, please see http://www.fincen.gov/20080211.html .

Best Productivity-Enhancement Technology - RA Automated FinCEN eFiling Recognized

2008-01-28T11:12:00.000-05:00

LAS VEGAS, Jan. 23 /PRNewswire/ -- Global Gaming Business magazine today announced the winners of the Sixth Annual Gaming & Technology Awards. The Gaming & Technology Awards are the industry's standard in this field, recognizing excellence in innovation and practical application in allgaming disciplines. The awards were presented to the winners today at theInternational Casino Exposition (ICE) in London.

In the category of Best Productivity-Enhancement Technology, the following gaming industry leaders received Global Gaming Business' Gaming & Technology award recognition:

IGT sb Floor Manager
Aristocrat Ace Interactive Gaming Solution V4.0
Bally Technologies GameMaker Scheduler
Resort Advantage Title 31 Accelerator eSubmission Automated FinCEN e-Filing
Sona Mobile Gaming System

R&SB Telephone Wagering - Impact on Title 31 Reporting

2008-01-21T13:06:00.000-05:00

According to a recent article in the Thoroughbred Times, the Wynn Las Vegas race book has started accepting phone account wagers on Thoroughbred races. The race book at Wynn Las Vegas accepted its first out-of-state wager in December.

Wynn accepts only phone wagers as current Nevada law does not allow Internet account wagering. Wynn is taking a conservative approach, with casino lawyers carefully reviewing laws in each state to make sure Wynn is in compliance. Wynn can accept wagers from players in Kentucky, Maryland, Massachusetts, New Mexico, North Dakota, Ohio, and Wyoming.
Wagers are made into the pari-mutuel pools.

So what does this mean for Title 31 compliance? These transactions are subject to the same monitoring, MTL, and FinCEN CTR-C generation processes as transactions taking place within the casino when winnings are paid, cash is provided by a customer for a wager, etc.

Of particular importance is confirming that the property knows "who they are doing business with" at the point of accepting the telephone transaction request. Since the individual is not physically in front of the betting window, it is likely that the telephone wagering customers will be current player's club members with complete current personal information on file. The property's knowledge of these details is critical to the successful compliance with the Title 31 reporting regulations.

AML For UK Casinos: Similarities To US Policies

2008-01-08T17:22:00.000-05:00

Following extensive consultation since October 2007, the UK Gambling Commission has compiled and published its regulatory document: "The Prevention of Money Laundering and Combating the Financing of Terrorism" giving guidance for land-based and online gambling operations, including online poker or live tournaments, concerning their responsibilities under the Money Laundering Regulations, which came into effect on 15 December 2007, and the Proceeds of Crime Act.

The details of this document specify how the UK's recently implemented AML policies reflect those of the US FinCEN / BSA requirements.

The Prevention of Money Laundering and Combating the Financing of Terrorism

Offshore Banking - Advocates and Detractors

2008-01-08T16:42:00.000-05:00

Source: TraderPool

This article provides an overview of the offshore banking industry today, including a look at its reputation as a money laundering vehicle. Helpful topics include:

Definitions
Advantages
Disadvantages
Statistics
Regulation

Money Laundering 101

2008-01-02T18:08:00.000-05:00

Source: Money Laundering - A Preventive Guide

Why Criminals "Launder" Money

1) to increase profits
2) to appear legitimate
3) to evade taxes
4) to avoid prosecution
5) to avoid seizure of accumulated wealth

The principal objective of money laundering is to convert cash into some other form of asset in order to conceal its illegal origins. A criminal group's efforts to launder the proceeds from their crimes may come to your attention at any stage of its placement, layering or integration into the financial system.

Placement: The launderer introduces the illegal profits into the financial system. This may be done by breaking up large amounts of cash into less conspicuous, smaller sums that are then deposited directly into a bank account, or by purchasing a series of monetary instruments (like cashier's cheques and money orders) that are then collected and deposited into accounts at other locations.

Layering: The launderer engages in a series of conversions or movements of funds to distance them from their source. The funds may be channeled through the purchase and sale of investment products, or the launderer may simply wire the funds through a series of accounts at a number of different banks. In some instances, the launderer may disguise the transfers as payments for goods or services, thus giving them a legitimate appearance.
Integration: The illicit funds re-enter the legitimate economy. The launderer may choose to invest the funds into real estate, luxury assets, or business ventures.

Money Laundering Methods

Structuring ("smurfing"): Smurfing is possibly the most commonly used money laundering method. It involves many individuals who deposit cash into bank accounts or buy bankdrafts in amounts under $10,000 to avoid the reporting threshold.

Bank Complicity: Bank complicity occurs when a bank employee is involved in facilitating part of the money laundering process. Bank complicity is becoming increasingly difficult for criminals to use following the introduction of the Canadian Bankers Association's policy, procedures and training (see Canadian Bankers Association ).

Money Services and Currency Exchanges: Money services and currency exchanges provide a service that enables individuals to exchange foreign currency that can then be transported out of the country. Money can also be wired to accounts in other countries. Other services offered by these businesses include the sale of money orders, cashiers cheques, and travellers cheques.

Asset Purchases with Bulk Cash: Money launderers may purchase high value items such as cars, boats or luxury items such as jewelry and electronics. Money launderers will use these items but will distance themselves by having them registered or purchased in an associate's name.

Electronic Funds Transfer: Also referred to as a telegraphic transfer or wire transfer, this money laundering method consists of sending funds electronically from one city or country to another to avoid the need to physically transport the currency.

Postal Money Orders: The purchase of money orders for cash allows money launderers to send these financial instruments out of the country for deposit into a foreign or offshore account.

Credit Cards: Overpaying credit cards and keeping a high credit balance gives money launderers access to these funds to purchase high value items or to convert the credit balance into cheques.

Casinos: Cash may be taken to a casino to purchase chips which can then be redeemed for a casino cheque.

Refining: This money laundering method involves the exchange of small denomination bills for larger ones and can be carried out by an individual who converts the bills at a number of different banks in order not to raise suspicion. This serves to decrease the bulk of large quantities of cash.

Legitimate Business / Co-mingling of Funds: Criminal groups or individuals may take over or invest in businesses that customarily handle a high cash transaction volume in order to mix the illicit proceeds with those of the legitimate business. Criminals may also purchase businesses that commonly receive cash payments, including restaurants, bars, night clubs, hotels, currency exchange shops, and vending machine companies. They will then insert criminal funds as false revenue mixed with income that would not otherwise be sufficient to sustain a legitimate business.

Value Tampering: Money launderers may look for property owners who agree to sell their property, on paper, at a price below its actual value and then accept the difference of the purchase price "under the table". In this way, the launderer can, for example, purchase a $2 million dollar property for $1 million, while secretly passing the balance to the seller. After holding the property for a period of time, the launderer then sells it for its true value of $2 million.

Loan Back: Using this method, a criminal provides an associate with a sum of illegitimate money and the associate creates the paperwork for a loan or mortgage back to the criminal for the same amount, including all of the necessary documentation. This creates an illusion that the criminal's funds are legitimate. The scheme's legitimacy is further reinforced through regularly scheduled loan payments made by the criminal, and providing another means to transfer money.

Casino Entry Cards: ID or not ID?

2007-12-07T11:14:00.000-05:00

Source: St. Louis Post-Dispatch An excerpt from the article: Casino Entry Cards: ID or not ID?

What goes on in Las Vegas may stay there, but placing a bet in Missouri means the house knows who you are, where you're from and how much you've spent. Stepping foot in one of the state's casinos demands an entrance card that can be obtained only by sharing personal information.

Though the cards might be here to stay — they are tied to the state's "loss limit" rule — a lawyer is now challenging whether gamblers need to identify themselves before entering a casino.

"The question is: Does the Missouri citizen have a right to gamble and not have everybody know who he is?" The card is needed to pass through the turnstiles at all Missouri casinos. To sign up for one, visitors must provide a form of government-issued ID. Gamblers also must present the card when they buy in, ensuring they don't exceed the limit of purchasing more than $500 in chips in a two-hour period.

In addition to the loss limit, the card was developed by the Missouri Gaming Commission to track admissions, which determines how much tax casinos pay. It is also used to keep out addicts who have asked the state to bar them from gambling.

December 6, 2007

FinCEN Releases "Frequently Asked Questions" for Casinos

2007-11-14T23:37:00.000-05:00

Live at G2E 2007 - Today's report of Title 31 compliance news!

Financial Crimes Enforcement Network (FinCEN) Director James H. Freis, Jr. today announced the publication of a detailed set of Frequently Asked Questions (FAQs) developed to assist the casino and gaming industry in complying with its responsibilities under the Bank Secrecy Act (BSA). Director Freis made the announcement as he addressed a session of the Global Gaming Expo 2007, a convention which attracted over 28,000 international gaming professionals.

"An important part of FinCEN's mission is providing feedback and clarification to each of the unique industries it covers," noted Director Freis in his remarks. "There have been some recent changes to casino regulation and FinCEN is committed to making compliance information easily accessible and widely available."

Nevada Gaming Commission Regulation 6A was repealed effective June 30, 2007, and former Nevada Regulation 6A casinos became responsible for complying with, among other things, BSA currency transaction reporting and casino recordkeeping requirements. In collaboration with the appropriate state and federal regulators, FinCEN continues to engage in a coordinated educational effort to better inform the industry. This guidance furthers that effort and provides all casinos and card clubs nationwide with useful information.

Topics covered include: which gambling establishments are subject to the regulations; how to comply with the currency transaction reporting requirement; how to comply with the suspicious activity reporting requirement; what types of records to make and retain to comply with the recordkeeping requirements; and how to comply with the compliance program requirement. While comprehensive, the list is not exhaustive and additional FAQs will be published in the future.

"FinCEN's authorities apply to a very broad definition of 'financial institution' and we are committed to addressing all covered sectors to protect the financial system from abuse by criminals, and to understand the unique differences among businesses," said Director Freis. "The only way to successfully carry out this responsibility is to collaborate and consult with industry professionals and to provide quality feedback in return."

Click for FinCEN FAQs on Casino Recordkeeping, Reporting, and Compliance Program Requirements

G2E 2007 - Small Casinos, Card Clubs and Title 31

2007-11-14T22:09:00.000-05:00

Live at G2E 2007 - Today's report of Title 31 compliance news!

Small casino properties and card clubs are now investigating the use of Title 31 compliance software to more effectively manage their reporting process.

Since these properties are traditionally low-volume FinCEN form filers, they are not able to justify an in-house Title 31 compliance solution. However, they still have the need to accurately manage the Title 31 compliance process per the BSA requirements. Though they are smaller operations, they can benefit from the same MTL transaction entry, transaction analysis, compliance audit, reporting, and FinCEN e-Filing capabilities as those found in the larger, more prominent casino properties.

Fortunately, there is a new option for these smaller properties and card clubs. One Title 31 software vendor presenting at G2E has created a secure hosted subscription software service that allows a property's compliance and audit users to access complete Title 31 compliance reporting capabilities remotely for a low monthly fee. Since this is a hosted service requiring only a secure Internet connection to access, there is no need to install and maintain sophisticated Title 31 software internally.

The result: sophisticated Title 31 compliance capabilities at a fraction of the cost. Further, small casino properties and card clubs can be up and running with Title 31 compliance process management capabilities in days instead of months.

G2E 2007 - New ID Authentication Technology Enhances Title 31 Reporting

2007-11-13T23:17:00.000-05:00

Live at G2E 2007 - Today's report of Title 31 compliance news!

Title 31 requires that casinos make every attempt to know who they are doing business with, particularly those customers performing transactions that result in exceeding the Title 31 reporting threshold.

Today at G2E, AP-ID, Inc. showed their ePAC real-time ID scanning / authentication / verification capabilities which can “front-end” the Title 31 MTL transaction logging process. AP-ID’s innovation offers a critical piece in the real-time gathering and monitoring of Title 31 / AML reportable transactions.

This industry innovation was developed to provide advanced turnkey Title 31 compliance and AML monitoring capabilities based on the premise of proactively identifying the customer and determining their disposition at the point of MTL transaction logging.

The proactive authentication/validation of a patron’s ID document type (supports over 2,000 different drivers license, passport, military ID, visa document types), a comparison of its content to the casino’s players club system, and the cross referencing of a number of external government watch lists during the transaction logging effort is proving to be invaluable in a casino’s AML program.

Whether a casino is using a manual MTL or an electronic MTL logging/monitoring tool (such as Resort Advantage’s Title 31 Accelerator), the ability to immediately verify a patron’s credentials quickly at the point of transaction is extremely valuable and is fast becoming an industry best practice within the Title 31 compliance process.

Further, casinos implementing a tightly integrated ID validation scanning and electronic MTL logging/monitoring solution that provides this immediate confirmation of “who you are doing business with” at the point of transaction entry are the proud owners of a simple, yet robust and extremely efficient process that supports world class Title 31 and AML compliance reporting.

Value-Add For Property Using ID Authentication Innovation:

It is currently estimated that, on average, 3% of all IRS / FinCEN reportable transactions W2G, 1099, etc.) have inaccurate patron information due to non-authentic / inaccurate IDs.

Security and surveillance alerts at the point of transaction results in the immediate identification of individuals who should be turned over to the authorities

Properties with robust ID authentication quickly become a deterrent to other individuals attempting transactions with false IDs or other improper credentials

An example:

A casino generates 200,000 W2G and 1099 transactions over the course of a year

6,000 of these transactions are susceptible to an IRS fine of $50 each

Total potential fine = $300,000 per year

G2E 2007 - Nevada's First Three Months Under Title 31

2007-11-12T20:45:00.000-05:00

Live From G2E 2007 - Today's report of Title 31 compliance news!

This afternoon at G2E, a panel discussion session was held with industry experts and FinCEN to discuss the practicalities of implementing Title 31 and comprehensive AML programs at Nevada's casinos.

For decades Nevada casinos operated under an anti-money laundering regulation of the state's Gaming Control Board known as Regulation 6A. As of July 2007, however, Regulation 6A was repealed and Title 31 was implemented in its place. Now under Federal regulation via the U.S. Treasury Department's Bank Secrecy Act, Nevada casino operators have had three months to evaluate the new system.

Nevada casino executive panel members discussed their own experiences during the recent July transition to Title 31, and suggested solutions to compliance questions posed by the audience participants.

This session, moderated by Thomas Peterman, Senior Vice President & General Counsel, MGM Mirage, leveraged input from these industry luminaries:

Peggy Jacobs - Executive Director & Casino Controller, MGM Grand Hotel & Casino
Barbara Rose - Manager, Audit Research & Special Projects, Harrah's Entertainment, Inc.
Len Senia - Senior Regulatory Program Specialist, FinCEN, U.S. Department of the Treasury

Panel members presented a number of key considerations from their Title 31 transition experiences:

Maintaining a log of patrons refusing to provide their SSN
Handling barred patrons since Title 31 does not have a provision for this
State regulators requesting the logging of non W2-G jackpots, though Title 31 CTR-C reporting does not require it
Handling "cash for cash" types of transactions
Changes to the IRS audit process for casinos' AML program
Components of a property's AML program (e.g. risk analysis, required documentation, staff training, testing, etc.)
The creation and function of the SAR and AML Compliance committees
The potential impact of Marketing / Player Development in the property's AML program
The number of SAR-C filings are generally not in line with the risk level associatged with the industry
Challenges in logging transactions and reporting on the NIL

Chip Tracking with RF ID - Impact on Title 31

2007-11-09T16:49:00.000-05:00

Source: The Star Ledger on NJ.com

An excerpt from the article: Casinos' Advantage - Regulating the Game

Q & A with Yvonne Maher, Acting Director of the New Jersey Division of Gaming Enforcement

How about "chip-tracking"?

"Chip-tracking is another interesting thing, and how the casinos might use it and how we might use it might be two different things. With chip-tracking, (the casinos) can put radio frequency devices in the chips. Obviously they can track where the chips go. So the casinos can do the player ratings and (see) what the players do and track the play (and) cater to the player.

We here can see: Are you walking with chips? Where are the chips going? Are you passing the chips off? How are the chips coming back into the cage?

Again, to bring you back to money laundering, what we find happens in the casinos is people are trying to avoid the CTRC's (Currency Transaction Report by Casino -- any transaction above $10,000). So they get $20,000 worth of chips and they give $10,000 to their friends to turn in or cash out and they keep $10,000 to cash out and they're trying to fly under the radar. So not only can the chip tracking work for the casino to cater to the customer, it can also work for us here in law enforcement."
November 7, 2007

Does Your Property Meet OFAC Compliance Requirements?

2007-11-01T10:34:00.000-04:00

The Office of Foreign Assets Control (OFAC) is a division of the U.S. Treasury Dept. OFAC administers economic sanctions involving certain nations. OFAC also maintains a database of individuals, called the SDN list, who are restricted from doing business with U.S. businesses (e.g. casinos) or whose assets are frozen.

OFAC Compliance FAQ:

1) What are the basic steps towards OFAC compliance?

If a transaction is taking place by someone on the SDN list:

Company must determine if the individual is subject to OFAC actions
Company should call OFAC to verify that the hit is not a false positive first
Company must block the asset or reject the transaction
Company must file a SAR report within 10 business days to OFAC

2) What is the SDN list?

SDN stands for Specially Designated Nationals and Blocked Persons, and is a public database maintained by OFAC and the U.S. Treasury. This list consists of individuals and entities that are subject to the sanctions programs of the OFAC.

3) What is a SAR report and when do we need to fill one out?

OFAC compliance involves the use a Suspicious Activity Report (SAR). If you are aware of, or observe, suspicious activity involving an individual on the OFAC list, you are required to fill out a SAR.

4) Can we tell the patron they are on the OFAC list?

You are permitted to inform customer they are on the OFAC list, and that is the reason their assets were blocked or transaction rejected.

5) How long do we need to keep OFAC records for?

OFAC-affected transactions must be kept for five years and made available to OFAC on request.

6) What is the punishment for OFAC non-compliance?

Failure to comply with OFAC can result in fines up to $1 million and 12 years in prison.

FinCEN Publishes SAR Activity Review

2007-10-30T10:28:00.000-04:00

Last Friday, FinCEN released the most recent issue of its SAR Activity Review - Trends, Tips and Issues. The publication is always a good read for BSA junkies.

http://www.fincen.gov/sarreviewissue12.pdf

Of particular interest in this report was the use of the “Other” field in the institution’s classification of the SAR type. According to FinCEN, this field should be more accurately used by the SAR filer to allow for a more representative characterization of the report, thus yielding better analysis of the suspicious activity report trends.

From Casinos to Counterterrorism

2007-10-29T10:24:00.000-04:00

Source: Washington Post and Identity Resolution Daily

Identity resolution guru Jeff Jonas, distinguished engineer and chief scientist, Entity Analytic Solutions, IBM, is back in the news again. The Washington Post recently featured him in an article on how technology developed for casinos is being applied to solve other problems like terrorist threats and money laundering. Who knew that Las Vegas was not only a great place to see the Rock Paper Scissors national championship or to (allegedly) commit a hotel room sports memorabilia theft but is also a hub of technology R&D?

Jonas originally created his Non-Obvious Relationship Awareness or NORA technology to detect aliases used by people trying to defraud the casinos. He then was able to use the technology to discover employees and fraudsters who were working together by, for example, identifying a shared home address. In other words, determine who’s who and who knows whom.

From the article:

“The casino industry, like the national security industry, is seeking
information to answer a fundamental question: Who are you? ‘It’s, are you a good guy or a bad guy? A threat or a non-threat?’ explained Derk Boss, the vice president for surveillance for the Stratosphere hotel and casino . . . ‘There are going to be people that just want to come and gamble and enjoy your services,’ he said. ‘And there are going to be people that are going to come to take your money. Our job is to distinguish between those two groups.’”

After 9/11, the Department of Homeland Security had an even more pressing need to separate the good guys from the bad guys, the threats from non-threats. They produced a request for technology that could:

Compare information contained in a passenger reservation with data contained in watch list records
Verify, report, and validate matches between passenger and watch list information
Resolve potential matches identified in the execution of the processes
Adjust the process in response to changes in security threat levels
Protect individual privacy and civil liberties

They received over 1,000 responses but ultimately they selected an identity resolution solution because that was the only type of technology that could meet the needs of the program. There are only two companies that produce identity resolution software as we define it - IBM (formerly SRD) and Infoglide Software. DHS chose Infoglide Software’s solution. Interestingly enough Infoglide Software’s origins also tie back to gambling as the technology was originally created to help investigators solve a murder that was linked to gambling activities.

This technology with its birth in the big money world of Vegas also can be applied to the problem of money laundering.

“At the U.S. Treasury’s Financial Crimes Enforcement Network, for example, investigators have used [Jonas’ technology] to track money laundering. From one Suspicious Activity Report — which financial institutions are required to send to the government — they have identified a money launderer’s partners in crime. FinCEN has a decade’s worth of data on 170 million report forms. ‘We find a tremendous amount of connectivity,’ said Steve Hudak, FinCEN spokesman. ‘We find suspects linked by addresses, suspects linked by phone numbers. So we definitely know that these people are operating together.’”

Other technologies, like surveillance equipment and biometrics, are also finding their way from the casinos to homeland security and other industries. So apparently what happens in Vegas doesn’t always stay in Vegas.

H.R. 2046: Internet Gambling Regulation and Enforcement Act of 2007

2007-10-29T10:06:00.000-04:00

To amend title 31, United States Code, to provide for the licensing of Internet gambling facilities by the Director of the Financial Crimes Enforcement Network, and for other purposes.

http://www.govtrack.us/congress/bill.xpd?bill=h110-2046

Standardizing Your Casino's Title 31 Compliance Processes

2007-10-22T16:44:00.000-04:00

Excerpts taken from an article written by Steve Jones, President of Jones Consulting, Inc.

In 2006, the Financial Crimes Enforcement Network (FinCEN) assessed a casino in Oklahoma with a $2.5M penalty for not having a Title 31 program in place. Did that get your attention? As a result of that hefty action, I felt it was time to write a standardization article concerning Title 31, to ensure that you and your casino do not find yourself on the wrong side of FinCEN.

Internal Revenue Service and FinCEN have set forth confusing guidelines regarding their mandatory anti-money laundering program known as Title 31. Although the regulations are not specifically confusing, they are somewhat vague and ambiguous. For example, the basic guidelines for each casino are: “To produce an anti-money laundering program, based on an analysis of risks presented by the casino’s products and services. An assessment of risk should be made for each product or service offered by the casino.” It is this vague guidance that leads to varied forms of interpretation throughout Gaming and as a result, a tremendous amount of disparity from casino to casino.

Specifically, some casinos have small Title 31 programs and act according to the interpretation of the day, while others have highly organized franchise operations, with clear guidelines, procedures, and the personnel and training required. The lack of clear, concise, and uniform Title 31 regulations coupled with the absence of minimum internal control standards has resulted in casino Title 31 compliance being one of the most diverse and inconsistent areas throughout Indian Gaming.

In order to standardize operations, and create the perfect Title 31 program, lets start from the beginning.

Program Requirements – The Basics

Although vague, there are actually some very specific requirements that must be included in every Title 31 program. Specifically, the IRS categorizes casinos as financial institutions subject to the requirements of the Bank Secrecy Act and requires every casino to have a designated Title 31 compliance officer and a written anti-money laundering program, created using risk analysis based upon the casino’s size, location, dollar volume, types of games, nature of customers, and internal controls related to money laundering. In addition, the IRS has mandated that the following items must be included in your anti-money laundering program:

Internal controls designed to assure compliance with the Bank Secrecy Act
Casino employee training
Independent compliance testing
A compliance officer, responsible for day-to-day compliance with the Bank Secrecy Act and the casino’s anti-money laundering program
Procedures for using all available information to determine the name, address and SSN, and to verify the identity of a patron
Procedures for using all available information to determine any transactions or patterns of transactions required to be reported as suspicious
Procedures for using computers to aid in compliance

Aside from some reporting and filing requirements, these are the ONLY guidelines for casinos, and they leave the specific details such as Multiple Transaction Logs (MTL) and other tracking programs up to the individual casino, and it is precisely these homemade tracking forms where Title 31 Compliance Officers spend the majority of their time.

In an effort to simplify the Title 31 compliance requirements let’s review the above stated guidelines, and pair them with the solution your casino should have in place:

Internal Controls
Title 31 Regulation. A detailed Title 31 regulation must be prepared by the casino Title 31 department, outlining the parameters used by the casino, such as gaming day, sample forms, employee procedures, etc… Many casino’s fall short in this area and fail to create a stand alone document that all operational departments can reference when a question arises.

Multiple Transaction Logs (MTL) – Everyone should be familiar with these, however these logs must be easy to use or electronic if possible, so that casino employees can easily track patron activity and forward the information to accounting. User friendliness is the key to casino forms.

Employee Training
Employee training is critical to a successful Title 31 program, however casino management must first decide which personnel require training and the frequency of the training. Some casinos train every employee in the casino, and some choose to only train supervisors who will be involved in cash transactions on the casino floor. I recommend that you provide training at least semiannually, using relevant information complete with numerous real world scenarios that arise on the casino floor.

Independent Testing
This is easy, and is probably already being completed by your Gaming Regulatory Agency or Internal Audit staff, if not, schedule this with one of these departments or an outside accounting or consulting firm.

Compliance Officer
This is your day to day Title 31 specialist, who is the go to person that all casino personnel can rely on for questions regarding Title 31. If this person is not readily available to casino operational personnel and there is not direct two-way communication, then you are leaving the casino open to multiple interpretations of Title 31 regulation. Make sure that your Title 31 Compliance Officer regularly meets with casino operational personnel and is available throughout the gaming day to answer questions.

Identification Gathering
Continually asking patrons for their identification is a never ending task that is often where casino’s can easily improve in both customer service and efficiency. Ensure that you are using technology fully with products such as drivers license scanning or other fields in your slot accounting management software to store patron identification. If you are still making thousands of photo copies of patron identification documents, it is definitely time to spend a little time and effort on technology, which will pay numerous dividends in the form of improved customer service coupled with the accuracy and efficiency improvements that technology can provide.

Suspicious Transactions
This area is more ambiguous than the basics of Title 31 and requires determining amongst casino management and your regulatory body, what you consider suspicious, then document sample transactions in your Title 31 Regulation, teach it in your training sessions, and allow plenty of opportunity for casino employees to give you everything they think is suspicious and let the Title 31 Compliance Officer figure out whether it is suspicious or not. With the IRS specifically looking closely at this area, it is better to be safe than sorry.

Computer Aids
With slot accounting management software installed in every casino tracking every bit of play on the casino floor, you would be surprised at the number of casino’s that do not have custom reports or even basic access to the slot accounting software reports. Because most Title 31 personnel are not operational casino employees, they often do not know what they do not know. Most of the required information needed to properly track and cross reference Title 31 transactions is already contained in your slot accounting system. If you are not fully using technology now, it is time to set up an appointment with your IT department to see if there are reports available that the Title 31 department has not been granted access to.

Incorporate these basic requirements and your Title 31 Compliance program will be fully functional and meet all IRS and FinCEN guidelines. Your casino must start with three basic elements: written procedures, employee training, and technology use. Specifically, a clear and concise Title 31 Regulation, relevant and standardized training, plus a dash of technology will make your Title 31 program as good as a steaming cup of java.

Global Payments VIP Lightspeed Supports Title 31

2007-10-17T17:02:00.000-04:00

Source: Money CNN

Global Payments Inc., a leader in both payment processing and gaming cash access services, today announced agreements to provide its VIP LightSpeed suite of cash access products to The Meadows Racetrack & Casino in Meadowlands, Pennsylvania; Prairie Band Casino & Resort in Mayetta, Kansas; Terrible's St. Jo Frontier Casino in St. Joseph, Missouri; and Terrible's Mark Twain Casino in La Grange, Missouri.

These casinos have signed contracts to utilize various LightSpeed products including VIP Preferred(R) check-cashing services, PlayerCash @dvantage(R) credit and debit card cash advance services, and ATM Cash @dvantage(R), which allows gaming patrons to initiate electronic check transactions at the ATM without casino cage assistance.

VIP LightSpeed is an Internet-accessible, PC-based platform that provides cash access services for traditional and electronic check cashing, ATM check cashing, credit and debit card cash advances and credit reports. In addition, VIP LightSpeed provides high speed processing of cash access transactions, reduction of risk associated with check-cashing and cash advance services, and a full spectrum of management and Title 31 reporting tools.

October 16, 2007

FinCEN E-Filing For Low Volume CTR-C Filers

2007-10-05T17:55:00.000-04:00

Resort Advantage announces the availability of "Title 31 Accelerator Online!", the gaming industry's first and only hosted Title 31 compliance software application suite. Title 31 Accelerator Online! offers the same transaction analysis, compliance audit, and powerful reporting capabilities as those found in Title 31 Accelerator's robust Back Office and eSubmission modules installed at the world's most prominent casino properties.

Title 31 Accelerator Online! was designed for casino properties with:

Low-volume FINCEN filing requirements do not justify an in-house Title 31 compliance solution yet they still have the need to accurately manage the Title 31 compliance process
An existing legacy CMS system that currently generates hard copy FINCEN forms internally and desires to file electronically

Title 31 Accelerator Online! is offered to customers as a secure hosted subscription service requiring only a secure Internet connection for the property's compliance and audit users to access its capabilities. Since this is a hosted service, there is no need to install and maintain sophisticated Title 31 software internally. The result - a sophisticated Title 31 compliance capabilities at a fraction of the cost! Further, you can be up and running with Title 31 compliance process management capabilities in days instead of months.

From historical transaction and FINCEN form filing history, to internal legacy system Title 31 reportable transaction upload capabilities, to electronic filing and acknowledgement of FINCEN form submissions, Title 31 Accelerator Online! will provide your Compliance and Internal Audit staff with all of the tools necessary to navigate the Title 31 compliance process.

"We have listened carefully to the needs of the gaming industry - casinos, state gaming boards, and FINCEN - to innovate a cost-effective means by which the capabilities of sophisticated Title 31 compliance reporting and electronic FINCEN forms filing can be made available to every casino in the country. Whether they file one CTR per month or one hundred, whether they have internal legacy systems generating hard copy CTRs or not, the benefits of complete, accurate, and auditable Title 31 compliance records can now be quickly realized by even the smallest property", states Brian Ferrilla, Managing Director of Resort Advantage.

Resort Advantage specializes in developing compliance software applications for the gaming community.

Real-Time ID Authentication / Verification For Title 31

2007-10-03T17:43:00.000-04:00

Resort Advantage, makers of the Title 31 Accelerator suite of Title 31 compliance software, announces the availability of real-time ID scanning / authentication / verification capabilities for the Title 31 Accelerator Casino Floor Monitor.

Through a formal technology partnership with AP-ID, Inc., makers of the ePAC Service Solution ID authentication and verification solution, the most advanced ID authentication solution available today, Resort Advantage is able to provide the gaming industry's most sophisticated Title 31 compliance and AML monitoring tools to its casino customers.

With the only integrated ID authentication scanning solution that supports up to 2,000 identification document types, real-time verification of patron SSN and Patriot Act watch lists, Title 31 Accelerator provides immediate confirmation of “who you are doing business with” at the point of transaction on the casino floor, and performs real-time cross-reference of your patron’s data currently on file.

Title 31 Accelerator is also able to "read" the ID contents and use the data to update your player master files and gather additional image information to be used in future transactions with that patron.

"Our relationship with AP-ID allows both of our firms to deliver the most advanced turnkey Title 31 compliance solution in existence to our casino customers. We can now provide a simple yet robust and efficient process for the ID authentication, verification, and transaction entry effort that supports world class AML compliance reporting", states Brian Ferrilla, Managing Director of Resort Advantage.

Resort Advantage specializes in developing compliance software applications for the gaming community.

Fincen Ruling 2005-5 – Definition of Money Services Business (Casinos as Money Services Businesses)

2007-09-18T13:34:00.000-04:00

Excerpts from a letter dated July 6, 2005, written by William D.Langford, Jr., Associate Director, Regulatory Policy and Programs Division, Department of Treasury.

I write in response to your letter or June 6, 2005 to the Financial Crimes Enforcement Network, in which you request guidance on whether casinos must comply with rules under the Bank Secrecy Act specific to money services businesses.

Casinos and card clubs, as defined in our regulations, are NOT required to comply with rules specific to money services businesses. Instead, casinos and card clubs must comply with Bank Secrecy requirements designed specifically for these industries. I address below additional issues potentially implicated by your question.

Rules applicable to money services businesses could apply to a gaming establishment that does not fall within the definition of a casino or card club under our regulations. For example, a gaming establishment with gross gaming revenue of $1 million or less does not fall under the definition of a casino, and therefore is not required to comply with the Bank Secrecy Act regulations applicable to casinos. However, if that gaming establishment otherwise provides services that fall within the definition of a money services business, the gaming establishment would be considered a money services business and must comply with Bank Secrecy Act rules specific to that industry.

There are certain reporting, recordkeeping, and other requirements under Bank Secrecy Act that apply to all financial institutions, including casinos and card clubs. Such requirements include: (i) the requirement to report the transportation of currency or monetary instruments into or out of the United States; (ii) the requirement to report foreign financial accounts; (iii) the requirement to file complete currency transaction reports within a specified period of time; (iv) the requirement to identify persons involved in currency transactions; (v) the requirement to maintain records relating to foreign financial accounts; (vi) the requirement to maintain records relating to funds transfers and other specified transactions; (vii) requirements relating to the form records must take, and the rendition period for records; and (viii) the requirement not to structure, attempt to structure, or assist in structuring transactions.

In addition, the mere use by a third party of space in a casino or card club would have no effect on whether the third party must comply with rules under the Bank Secrecy Act specific to money services businesses. For example, if a tribal casino leases space within the establishment to a person that provides money services, such as the cashing of checks or funds transfers, that person must comply with rules under the Bank Secrecy Act specific to money services businesses, provided that the person’s activities meets the definition of a money services business in our regulation.

Title 31 Compliance For the Layman

2007-09-17T17:24:00.000-04:00

Why Does Title 31 Exist?

The intent of Title 31 is to discourage criminals involved with laundering money (either from drug transactions or other deceitful and illegal acts) or attempting to evade income tax reporting by using banks and other financial institutions in the United States and Puerto Rico.

The Financial Crimes Enforcement Network (referred to as “FinCEN”) was established by order of the Secretary of the Treasury on April 25, 1990 as a bureau in the Department of the Treasury. Title 31 compliance for all financial institutions, of which casinos are included, is managed by FinCEN.

Why Are Casinos Under Title 31?

Casinos, by their very nature, have a great deal of money on hand. Because of this, they are vulnerable to money launderers. Thus, gaming industry compliance with Title 31 became necessary in the United States and Puerto Rico.

With the subsequent expansion of gaming, including Indian gaming, has come expansion of the requirement for Title 31 compliance, which now applies to all landbased and riverboat operations, as well as all Tribal casinos.

What is Required For Title 31 Reporting at Casinos?

At all casinos, any individual performing a cash transaction (both incoming and outgoing) that exceeds a certain threshold must be noted on a transaction log by the casino staff. Further, if the aggregate of all cash transactions for an individual exceeds $10,000 for a particular 24 hour gaming day period, they must be reported. So, if you win big, you'll be asked to provide: name, address (proof of address), occupation, social security card, and driver's license number or valid government photo identification.

All of this will ensure that in your dealings with the government, you can verify the source of these funds as legal wagering, rather than from any questionable activity. And, of course, it protects the casino by creating a verifiable record of all such transactions.

Financial Crimes Enforcement Network (FinCEN)

2007-09-12T09:55:00.000-04:00

The Financial Crimes Enforcement Network (FinCEN) is a network to fight the complex problem of money laundering. Created in 1990, FinCEN has worked to maximize information sharing among law enforcement agencies and its other partners in the regulatory and financial communities. Working together is critical in succeeding against today's criminals. No organization, no agency, no financial institution can do it alone. Through cooperation and partnerships, FinCEN's network approach encourages cost-effective and efficient measures to combat money laundering domestically and internationally.

Wikipedia on FinCEN

Instructions for Suspicious Activity Report (SAR) by Casinos and Card Clubs – FinCEN Form 102

2007-09-12T09:40:00.000-04:00

Every casino and card club (for purposes of 31 CFR 103, a “reporting casino”), shall file with FinCEN, to the extent and in the manner required by 31 CFR 103, a report of any suspicious transaction relevant to a possible violation of law or regulation. A casino may also file with FinCEN, by using the Suspicious Activity Report by Casinos(SARC), a report of any suspicious transaction that it believes is relevant to the possible violation of any law or regulation but whose reporting is not required by 31 CFR 103.
A transaction requires reporting under the terms of 31 CFR 103.21 if it is conducted or attempted by, at, or through a casino, and involves or aggregates at least $5,000 in funds or other assets, and the casino knows, suspects, or has reason to suspect that the transaction (or a pattern of transactions of which the transaction is a part):
Involves funds derived from illegal activity or is intended or conducted in order to hide or disguise funds or assets derived from illegal activity (including, without limitation, the ownership, nature, source, location, or control of such funds or assets) as part of a plan to violate or evade any federal law or regulation or to avoid any transaction reporting requirement under federal law or regulation;
(i) Involves funds derived from illegal activityor is intended or conducted in order to hide ordisguise funds or assets derived from illegal activity(including, without limitation, the ownership,nature, source, location, or control of such fundsor assets) as part of a plan to violate or evade anyfederal law or regulation or to avoid any transactionreporting require-ment under federal law orregulation;
(ii) Is designed, whether throughstructuring or other means, to evade anyrequirements of 31 CFR 103 or of any otherregulations promulgated under the Bank SecrecyAct, Public Law 91-508, as amended, codified at12 U.S.C. 1829b, 12 U.S.C. 1951-1959, and 31U.S.C. 5311-5332;
(iii) Has no business or apparent lawfulpurpose or is not the sort in which the particularcustomer would normally be expected to engage,and the casino knows of no reasonable explanationfor the transaction after examining the availablefacts, including the background and possiblepurpose of the transaction; or
(iv) Involves use of the casino to facilitate criminal activity.

Instructions for Suspicious Activity Report by Casinos and Card Clubs – FinCEN Form 102

FinCEN Form 103, Currency Transaction Report by Casinos

2007-09-12T09:32:00.000-04:00

FinCEN Form 103, Currency Transaction Report by Casinos Revised Instructions for Completing the Form The Financial Crimes Enforcement Network (FinCEN) amended the Bank Secrecy Act regulation requiring casinos to report transactions in currency (see 72 FR 35008 (June 26, 2007).

Specifically, the amendments exempt, as reportable transactions in currency, jackpots from slot machines and video lottery terminals, as well as transactions, under certain conditions, involving certain money plays and bills inserted into electronic gaming devices. Based on these changes:

Slot jackpots are no longer required to be reported in item 31d (or elsewhere on the
Form)
Money play bets are reported as cash in transactions in item 30d (“currency wager(s)”)
Bills inserted into electronic gaming devices are reported as cash in transactions in item
30h (“other (specify)”), with the words “bills inserted in EGDs” in the space immediately
following “(specify)”
Ticket redemptions (includes slot machines/video lottery terminals) are reported as cash out transactions in item 31a (“redemptions of casino chips, tokens and other gaming instruments”)

Casinos may continue to use the previous version of Form 103 (Rev. 3-03) if they complete it in accordance with this guidance; revised Form 103 has updated instructions to reflect the changes found in 31 C.F.R. § 103.22(b)(2)(iii). Also, the casino or card club gross annual gaming revenue continues to be in excess of $1 million.

FinCEN Form 103, Currency Transaction Report by Casinos

Bank Secrecy Act (BSA) Forms and Filing Requirements

2007-09-12T09:27:00.000-04:00

There are hundreds of thousands of financial institutions currently subject to Bank Secrecy Act (BSA) reporting and recordkeeping requirements for which the Financial Crimes Enforcement Network is authorized responsibility.

Depository institutions, e.g., banks, credit unions and thrifts
Brokers or dealers in securities and/or futures
Money services businesses (MSBs) [e.g., money transmitters; issuers, redeemers and sellers of money orders and travelers’ checks; check cashers and currency exchangers]
Casinos and card clubs
Insurance companies Mutual funds
Individual(s) transporting over $10,000 in currency or other monetary instruments into/out of the US
Shippers/Receivers of over $10,000 in currency or other monetary instruments into/out of the US
Individuals or entity's that receive more than $10,000 in cash in one or more related transactions in a trade or business
US persons who have a financial interest in or signature or other authority over a foreign financial account if the aggregate value exceeds $10,000 at any time during the reporting year

The following are links to PDF versions of the BSA forms, which you may search in three ways: most frequently requested, type or form number.

Tonkawa Gaming Cleans Up

2007-08-17T17:13:00.000-04:00

Source: Casino Enterprise Management

Like many Native American Nations, the Tonkawa Tribe of Oklahoma embraced gaming after passage of the Indian Gaming Regulatory Act (IGRA) as a means of improving the overall conditions for its people while promoting Tribal economic development and self-sufficiency.

In 1999, the Tribe opened a small casino and off-track betting operation (The Tonkawa Bingo and Casino) on reservation land at Fort Oakland near Tonkawa, Okla. The enterprise enjoyed a degree of success and the Tribe began to prosper for the first time since moving to the reservation from Texas in the mid-1880s.

By the fall of 2005, the Tribe was anxiously awaiting the opening of a brand new facility - the Native Lights Casino - on tribal lands near the Kansas border, north of Newkirk, Oklahoma. Unfortunately, the management company engaged by the Tribe to operate the Tonkawa Casino, which was headed by a prominent Tribal member, repeatedly failed to obtain approval of its management contract by the National Indian Gaming Commission (NIGC), as required by 1GRA.

The NIGC finally took enforcement action in February 2006 by issuing a notice of violation and closure order, and later demanded strict adherence to a number of pre-opening conditions for resumption of gaming activity by the Tribe.

A further blow fell in March 2006 when the Financial Crimes Enforcement Network (FinCEN) cited the Tribe for numerous Bank Secrecy Act violations related primarily to operation of its off-track betting operation.

FinCEN found that large cash transactions at the Tonkawa Bingo and Casino had routinely gone unreported and that there was evidence that East Coast mob figures had used the casino and OTB operation to launder money.

FinCEN ordered remedial measures and imposed a $1 million fine on the Tribe and $1.5 million fine on its casino management contractor.

The Tribe's situation and financial future at this point looked very bleak. Though they had brought in a new management company prior to the actions by the NIGC and FinCEN, the Tribe's primary source of revenue was now gone and its substantial investment in the new facility was at risk. There was little apparent prospect for any immediate relief.

Chair of the NIGC, Phil Hogen, characterized the Tribe as "the poster child for how not to run a casino." Commissioner Chuck Choney also stated that it would be a long time before gaming would resume on Tonkawa land.

Rather than bemoan misfortune or embark on self-destructive defensive responses, the Tonkawa Tribe and its leaders reached into its ancient history and traditions to take decisive and courageous corrective action.

The Tribal Council, which had replaced the previous administration while the NIGC and FinCEN investigations were pending, realized that an aggressive, positive response was necessary.

Under the strong leadership of President Anthony E. Street, the council embarked on an effort to create a model regulatory structure while at the same time distancing the Tribe from past mistakes.

As a crucial first step, council members essentially fired themselves as gaming commissioners. The council next adopted a resolution amending the tribal gaming ordinance to establish a truly independent gaming commission.

After a nationwide recruitment effort, the council then brought in a trio of highly respected former gaming regulators to serve one-year terms on the new commission to oversee development of a solid Tribal regulatory structure.

In addition, they engaged Nelson Westrin, former vice-chair of the NIGC, to serve as general counsel to the commission. In addition to developing a strong regulatory structure, the commission and its counsel were charged to identify and mentor able 'Tribal members to effectively take on the responsibilities of commissioners and commission staff after one year.

The new commission, made up of former Michigan Gaming Control Board regulators Tom Nelson and Pat Leen, and long-time Oklahoma tribal gaming regulator, Les Cusher, hit the proverbial ground running.

Within eight weeks of their May 1, 2006 appointment, the commission had adopted new gaming regulations that effectively implemented the commission's licensing and regulatory powers and duties contained in the amended ordinance, and also provided detailed requirements for suitable conduct and operation by licensees.

The new commission also adopted Tribal Internal Control Standards (TICS) based on the latest NIGC requirements; identified and arranged for secure office space; and developed position descriptions for an adequate staff of licensing specialists, compliance inspectors, game device technicians, and auditors, along with necessary support staff.

Tribal council strongly supported each step of the new commission by approving the commission's proposed annual budget and establishing a separately funded Tribal bank account for the approved budget under the commission's control.

Early on, the commission, with the Tribal Council's unwavering support, made it clear that the closed Tonkawa casino would not reopen until issues related to the underlying causes for its closure were fully investigated and resolved. The focus, therefore, turned to inspections and assessment of the proposed new Native Lights Casino.

Pat Leen, vice-chair of the commission and acting executive director, embarked on a series of detailed inspections of the proposed new casino.

Using a detailed 20-page checklist specifically developed by the commission to assess the proposed new gaming operation, he conducted three separate on-site inspections over a six-week period and reported his findings in detailed reports covering all aspects of casino operations, including cash handling controls, surveillance, security, staffing, training, gaming device compliance, NIGC mandated pre-opening issues, and state-tribal compact
issues.

As the operational inspections took place, the commission also proceeded to develop new licensing forms for employees and vendors. Casino management was instructed that all employees and vendors that were required to hold gaming licenses had to submit complete applications, undergo preliminary background checks, and be licensed before the casino could open.

The commission and its general counsel approached the NIGC and its Tulsa regional office early in this process to ensure that all requirements for resumption of gaming activities at Tonkawa would be met or exceeded.

Representatives of the NIGC attended all commission meetings (the first ever public commission meeting held by the Tonkawa Tribe), received copies of all commission inspection reports, and were kept up to date regarding all commission actions and activities.

Three critical issues emerged from the various inspections and reviews that required resolution prior to any resumption of gaming activities.

First, the NIGC mandated as pre-opening condition that the Tribe's prior management contractor and close associates had to be disassociated from any future gaining activity on tribal lands.

Second, a questionable existing contract with a gaming device distributor had to be thoroughly investigated to ensure that the contractor was suitable and that the terms of the contract were lawful and commercially reasonable.

Third, since the Oklahoma state-tribal compact allowed for certain types of Class III games in addition to Class II devices, proposed devices for the new casino had to be thoroughly reviewed for correct classification.

The first issue was resolved by the Tribe's formal pre-opening agreement with the NIGC and the entry of a formal exclusion order by the commission at its June 30, 2006 public meeting, ensuring that the prior management contractor and several close associates would not be involved in any fashion in the new gaming operation.

The exclusion order, which banned the former management contractor from even entering the new casino, received full support from the "tribal council even though the order affected an influential tribal member.

The Tribal president resolved the second issue by negotiating a mutual rescission of the questionable distributor contract.

Finally, casino management eliminated the electronic game classification question by agreeing to open the casino as a wholly Class III compacted game facility, even though it required revenue payments to the state that might not have been necessary if certain games had been classified as Class II.

The combination of the above regulatory actions culminated in the issuance of a gaming facility license by the commission on June 29, 2006.

Issuance of a license by the 'tribal commission, however, did not end the Tribe's odyssey. It still needed the approval of NIGC Chair, Phil Hogen, to open the new casino. This finally came on July 6, 2006, after a thorough, independent final inspection of the new casino and its operations by the NIGC's Tulsa Regional Office, which found that the Tribe had satisfactorily met all agreed pre-opening conditions.

What was clear to the commission from its early meetings with NIGC staff was that the NIGC had been initially skeptical about the Tribe's commitment to a fresh start and the efficacy of the new gaming commission.

At the conclusion of the process, the staff and Chair Hogen were all pleasantly surprised by the success of the Tribe's rapid turnaround. At the end of the day, Chair Hogen stated that he was "cautiously optimistic" that the regulatory framework the Tonkawa Tribe had put in place would ensure continued future compliance with IGRA and NIGC regulations.

This statement by Chair Hogen summarized in very straightforward terms the ongoing regulatory challenge that the Tonkawa Tribe, like every other gaming Tribe in America, must continually meet to ensure the success of their tribal gaming operations.

The Native Lights Casino opened to the public on July 6, 2006 and has been operating smoothly.

New automated records systems and intense training have ensured Bank Secrecy Act compliance. A respected contract accounting firm reviews all financial activity on a daily basis.

The commission is in the process of hiring and training additional staff and continues to conduct periodic inspections of gaming operations.

The rapid turnaround in the fortunes of the Tonkawa Tribe is attributed to the swift, decisive, and forceful actions of its leadership. Their efforts ensured that the tribe, through its independent gaming commission, regained its role as primary regulators of its gaming activity.

It has also laid the groundwork for transfer of knowledge from the current commissioners to mentored tribal members so that the regulatory structure now in place will achieve institutional status and continuity in the years to come.

Cooperation with NIGC and state officials, adoption of generally accepted industry standard rules and internal controls, instead of compromising tribal sovereignty, has strengthened it. The serious commitment by the Tribal leadership to self-regulation will not only ensure that the violations of the past do not reoccur, but will also go far to ensure that assets and revenues generated by the Tribe's gaming operations are protected and flow without interruption to the maximum benefit of the Tribal community.

This latest battle for survival is one of the most important and decisive battles this Tribal nation has ever waged to ensure its long-term existence and the continuance of its Tribal heritage. Thus far, the Tribe's strong leadership and tradition of courageous confrontation has served it well.

Going forward, the Tribe will need the same superior leadership and vigilance to ensure that its newly-opened gaming operations remain well regulated and capable of promoting economic development and adequately funding vitally-needed Tribal governmental programs and services for the Long-term benefit of the Tribe and its members.

AGA and FinCEN Announce Revised Currency Transaction Reporting Standards Exempting Slot Jackpots

2007-07-04T10:55:00.000-04:00

Source: Detroit News

The U.S. casino industry received some good news last week when the Financial Crimes Enforcement Network (FinCEN) announced an amendment to the Bank Secrecy Act allowing casinos to be exempt from filing currency transaction reports (CTRs) on jackpots paid out by video lottery terminals or slot machines. The new regulation does not, however, change the requirement for casinos to report other currency transactions greater than $10,000.

The exemption, first proposed by The American Gaming Association (AGA) in 1995, was announced on June 21, and went into effect on June 26, 2007. This reporting change, along with a few other regulatory pronouncements made last week, may have come as a surprise to the casino industry, since it was the first noteworthy reduction in currency reporting requirements in twenty-two years.

The FinCEN is a regulatory body of the U.S. Department of Treasure that's mission is "to safeguard the financial system from the abuses of financial crime, including terrorist financing, money laundering, and other illicit activity." Originally, reports were required for jackpots from slot and video terminals for fear of it being a channel for money laundering. The AGA has continued to argue that this is not possible due to the fact that slot and video terminal jackpots are controlled and determined by a random number generator, and therefore would be an unlikely avenue for these crimes.

According to a press release issued by the FinCEN, it believes the announcement "highlights the regulatory efficiency and effectiveness that can be reached through outreach with the industry on the mutual goal of improving the reporting requirements to make appropriate information available to law enforcement users."

While this ruling does not change the fact that jackpots must still be reported to the IRS on W2-G forms, it will save casinos time since these jackpot CTRs make up ten to fifteen percent of all CTRs filed. Casinos can also look forward to the other regulatory changes announced with the slot and video jackpots exemption. According to AGA's Federal Issues Update, these pronouncements include:

For bets of currency (or "money plays," which are permitted only in Nevada,
Mississippi, and certain tribal casinos), FinCEN changed its original proposal so that a casino need report as a "cash in" or "cash out" transaction only those amounts bet by a patron with "new" money, not bets made with currency wagered in an earlier transaction.

For cash inserted directly into slot machines and other electronic terminals, FinCEN
reaffirmed its earlier statement that such transactions must be reported only if the casino has knowledge that the individual bettor inserted the specific currency.
FinCEN clarified regulatory language describing reportable transactions by (i)removing the confusing term "plaques," (ii) inserting the term "tickets," which describes tickets issued by "cashless" slot machines, and (iii) replacing the term "entertainment expenses" with "complimentary expenses and gaming incentives."

An exemption from reporting all transactions between a casino and either (i)currency dealers or exchanges, or (ii) check cashing services, so long as those transactions are conducted under a contract between the casino and the outside service, Since money services businesses have to file reports of those transactions, FinCEN concluded that the casino-filed CTRs are duplicative.

The AGA should be proud of what it has accomplished in getting some common sense solutions from the federal government on behalf of the industry. FinCEN also deserves praise for listening, and working to improve reporting requirements in a reasonable manner that still makes appropriate information available for law enforcement.

Final Rule Amending Casino Currency Reporting

2007-06-23T11:06:00.000-04:00

June 21, 2007

VIENNA, Va. - The Financial Crimes Enforcement Network announced today a final rule that exempts casinos from the requirement to file currency transactions reports (CTRs) on jackpots from slot machines and video lottery terminals. The final rule also exempts reportable transactions in currency, under certain conditions, involving certain money plays and bills inserted into electronic gaming devices. This final regulation, which amends Bank Secrecy Act regulations, does not change the regulation requiring casinos to report all other transactions in currency of more than $10,000. The final rule will be effective when it is published in the Federal Register, which is expected to occur on June 26.

The casino industry sought relief from this reporting requirement relating to jackpots from slot machines and video lottery terminals because these particular jackpots make up a significant percentage of CTRs filed by casinos but present a low risk of money laundering. FinCEN accepts that customers who win more than $10,000 in jackpots will have won those funds because of the workings of the random number generator in electronic gaming devices and, thus, are not likely to form part of a scheme to launder funds through casinos. FinCEN believes today's announcement highlights the regulatory efficiency and effectiveness that can be reached through outreach with the industry on the mutual goal of improving the reporting requirements to make appropriate information available to law enforcement users.

On a related note, effective July 1, 2007, Nevada casinos with gross annual gaming revenues of $10,000,000 or more and "table games statistical win" of $2,000,000 million are required to file FinCEN Form 103 (Currency Transaction Report by Casinos). Thus, all casinos will be subject to the same reporting requirements using the same form. With the repeal of Nevada Gaming Commission Regulation 6A effective at the close of business on June 30, 2007, FinCEN Form 103-N (Currency Transaction Report by Casinos - Nevada) will be rescinded and not acceptable for reporting transactions after June 30, 2007.

ID Verification: True Identity Clues All In The Cards

2006-10-29T09:55:00.000-05:00

Source: Bank Technology News

Dressed sharply in nice suits and white shirts, would-be casino patrons are videotaped bolting out the front doors like Edwin Moses. They're not being chased, and they haven't stolen anything. But they are in flight for a good reason.

Many of these runners were fakes who had presented false drivers licenses and bogus wealth credentials to parlay a fat credit line and cash privileges from the house. Before they turned tail, they most likely saw a casino patron swiping the license through an ID authentication scanner, which would immediately alert personnel to the scam, according to Frank Mandelbaum, CEO of ID authentication tech firm Intelli-Check.

Mandelbaum hasn't seen these blooper reels himself, but his casino clients always bring them up when they tell Mandelbaum about the "soft case" savings they are getting out of the Intelli-Check system, which reads and validates the encoded information on state drivers licenses and identity cards.

If the casinos are right about these fleet-footed crooks, then banks should perhaps consider installing revolving doors. Intelli-Check, which has roots in age verification technology for casinos and bars, has for the past year started to move its ID authentication technology into the retail and financial services arena. For the likes of Comerica Bank, Certegy and, according to reports, Target (Intelli-Check neither confirms nor denies them as a client), the use of Intelli-Check's products like ID-Check and ID-Compass is fast becoming a way to quickly spot fraudulent IDs and to speed up business productivity. "We have seen a huge amount of traction," says Mandelbaum of the publicly American Stock Exchange-traded Intelli-Check, which reported $3 million in booked orders for 2005.

Intelli-Check's hardware and software technology works through verifying the bar-code and mag-stripe encoded information on the back of driver's licenses or other state- or military-issued ID. Intelli-Check helped develop that technology for state DMVs (currently 49 states have readable drivers licenses, as well as some of the Canadian provinces), and can tie into DMV data for verification purposes.