LAS VEGAS -- Caesars Palace appears to be better at taking gamblers' money than tracking where that money comes from.
The U.S. Treasury Department said Tuesday that the casino will pay a total of $9.5 million to resolve federal and state allegations that it failed to prevent money laundering. That financial penalty includes an $8 million settlement and a $1.5 million fine by Nevada gaming regulators.
The investigations stems from actions the casino made as early as 2012.
The federal agency says Caesars Palace willfully and repeatedly violated the Bank Secrecy Act, including allowing high-rollers to gamble millions anonymously in private areas of the casino. The agency says the casino marketed the private gambling rooms in the U.S. and abroad, particularly to Asian gamblers, but didn't watch for possible suspicious activity in the cash flow that resulted, including large wire transfers.
As a a result, Caesars failed to report some the "most lucrative and riskiest" financial transactions at the casino, according to the government.
While there's no indication that actual money laundering occurred, the Treasury Department said the lack of scrutiny "exposed the casino and the U.S. financial system to illicit activity."
"Caesars knew its customers well enough to entice them to cross the world to gamble and to cater to their every need," said FinCEN Director Jennifer Shasky Calvery in a statement. "But, when it came to watching out for illicit activity, it allowed a blind spot in its compliance program."
A Caesars Entertainment spokeswoman says in a statement that the Las Vegas Strip casino has since improved its methods to prevent and detect money laundering and is committed to fully complying with the rules.
The settlements will need to be approved by a federal bankruptcy court in Chicago since the casino company's bankrupt operating unit would be responsible for paying the fines. They would be considered unsecured claims which are paid behind any priority liens.
Caesars Entertainment Operating Co. filed for bankruptcy protection in January in hopes of shedding some $10 billion of its $18.4 billion in debt.
The $1.5 million state settlement would still need to be approved by the five-member Nevada Gaming Commission before being sent to the bankruptcy court for approval.
"Caesars has been very cooperative," said Nevada Gaming Control Board Chairman A.G. Burnett.
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