The partnership that operates the Bicycle Hotel & Casino in Bell Gardens has agreed to pay $500,000 and undergo enhanced review and reporting requirements to resolve a federal probe into alleged violations of the anti-money laundering provisions of the Bank Secrecy Act, it was announced Friday.
According to the non-prosecution agreement with prosecutors, the casino accepted responsibility for failing to properly file reports for a high roller who conducted millions of dollars in cash transactions at the casino in 2016. The currency and suspicious activity reports are required under the BSA, a law intended to thwart money laundering.
Federal prosecutors entered into the agreement in recognition of the Bicycle’s remedial efforts to strengthen its anti-money laundering program, as well as its acceptance of responsibility, cooperation with authorities during this investigation and agreement to make a $500,000 payment, according to the U.S. Attorney’s Office in Los Angeles.
Also on Friday, California Attorney General Rob Bonta filed an administrative accusation with the state Gambling Control Commission against Bicycle after the company admitted wrongdoing as part of the federal agreement.
“Our gaming laws are about protecting the public and ensuring money from illicit activity isn’t funneled through card rooms and casinos,” Bonta said. “The federal government has taken action against Bicycle, and now it’s time to hold the casino accountable for alleged violations of our state laws.”
Under the banking act, casinos like the Bicycle are required to implement and maintain programs designed to prevent criminals from using the casino to launder the large sums of cash that illegal activity can generate. For example, casinos must record and report to the government the details of transactions involving more than $10,000 in cash by any one gambler in a 24-hour period. The law also requires casinos to file reports documenting suspicious activity, such as efforts designed to avoid the filing of accurate currency transaction reports.
As part of the NPA, the Bicycle admitted that the Chinese national gambled at the casino roughly 100 times over an eight-month period in 2016, playing high-limit baccarat in a VIP room with huge sums of cash that on some occasions he transported to and from the casino in duffle bags.
A statement of facts in the agreement also chronicles some of the high roller’s marathon play sessions, such as one occasion in which he withdrew $2 million from his player account about 2:45 p.m. and played in a VIP room through 1:20 a.m. the following morning.
When conducting cash transactions, the foreign national relied on an assistant to conduct over $100 million in cash-in or cash-out transactions on his behalf, federal prosecutors said.
As part of the agreement, the Bicycle admitted that from at least Jan. 7 to July 27, 2016 it improperly filed currency transaction reports in the name of the assistant when it should have referenced the high roller in those reports. The casino also failed to file any suspicious activity reports during this period, according to the government.
Under the agreement’s terms, the Bicycle agreed to pay the United States $500,000, which represents the revenue the Bicycle made from the high roller. The casino must also implement additional review and reporting requirements to assure BSA compliance, including an audit by a third party and regular reporting to the U.S. Attorney’s Office. The agreement also requires the Bicycle to cooperate with law enforcement in any additional investigations or proceedings arising from the conduct described in the agreement’s statement of facts.