Wynn Las Vegas forfeits $130 million for illegally conspiring with unlicensed money transmitting businesses

SAN DIEGO — Wynn Las Vegas, the Las Vegas casino and subsidiary of Wynn Resorts, Limited, agreed today to forfeit $130,131,645 to settle criminal allegations that it conspired with unlicensed money transmitting businesses worldwide to transfer funds for the financial benefit of the casino.

Today’s settlement is believed to be the largest forfeiture by a casino based on admissions of criminal wrongdoing.

“Casinos, like all businesses, will be held to account when they allow customers to evade U.S. laws for the sake of profit,” said U.S. Attorney Tara McGrath. “Federal oversight seeks to prevent illegal funds from tainting legitimate businesses, ensuring that casinos offer a clean, thriving, and safe entertainment option.”

As part of a Non-Prosecution Agreement, which allows a company or individual to avoid criminal prosecution in exchange for meeting certain criteria, Wynn Las Vegas (WLV) admitted that it illegally used unregistered money transmitting businesses to circumvent the conventional financial system.

For example, WLV regularly contracted with third-party independent agents acting as unlicensed money transmitting businesses to recruit foreign gamblers to WLV. For the gamblers to repay debts to WLV or have funds available to gamble at WLV, the independent agents transferred the gamblers’ funds through companies, bank accounts, and other third-party nominees in Latin America and elsewhere, and ultimately into a WLV-controlled bank account in the Southern District of California.

Funds deposited into the WLV-controlled account were transferred into the WLV cage account. WLV employees, with the knowledge of their supervisors, and working with the independent agents, eventually credited the WLV account of each individual patron. The convoluted transactions enabled foreign gamblers at WLV to evade foreign and U.S. laws governing monetary transfer and reporting.

In one example, Juan Carlos Palermo, while acting as an independent agent for WLV, operated and controlled multiple unlicensed money transmitting businesses in the United States and abroad that conducted more than 200 transfers with bank accounts controlled by WLV or associated entities. These transactions, on behalf of more than 50 foreign casino patrons, exceeded $17.7 million.

WLV also facilitated the unlicensed transfer of money through “Human Head” or “Human Hat” gambling, known in Mandarin as “人头” or “ren tou.” In this scheme, a person known as a “Human Head” purchased chips at WLV and gambled at WLV as a proxy for another nearby person who, in some instances, because of federal Bank Secrecy Act or Anti-Money Laundering (BSA/AML) laws, was unable or unwilling to conduct financial transactions or gamble under their own identity. The true patron, however, would direct the Human Head’s gaming. WLV knowingly allowed this form of gambling without scrutinizing the true patron’s funds and without reporting the suspicious activity.

In another example, WLV facilitated the unlicensed transfer of money to and from China through a method known as “qian chen” or “Flying Money.” A money processor, acting as an unlicensed money transmitting business, collected U.S. dollars in cash from third parties in the United States and delivered that cash to a WLV patron who could not otherwise access cash in the U.S. The patron then electronically transferred the equivalent value of foreign currency from the patron’s foreign bank account to a foreign bank account designated by the money processor. The WLV patron paid the money processor a percentage of the value transferred. Like Human Head gambling, WLV knowingly allowed this form of gambling without scrutinizing the source of funds and without reporting the suspicious activity.

WLV also facilitated the international transfer of money and conducted other financial transactions for WLV patrons whose activity should have triggered the filing of Suspicious Activity Reports. For example, in 2018, WLV facilitated financial transactions worth approximately $1.4 million for an individual who two years earlier had been publicly linked to proxy gambling and a year earlier, while in the company of the President of Marketing of a WLV international affiliate, was denied entry to the United States because of suspected associations with a criminal organization.

In another instance, WLV allowed and did not report transactions involving millions of dollars by an individual who, according to publicly available information, had spent six years in prison in China for conducting unauthorized international monetary transactions and violations of other financial laws.

“Of the many unique authorities HSI is able to enforce, understanding and investigating complex financial crimes that lead to holding criminals accountable for their actions, is one that HSI does best,” said Christopher Davis, acting special agent in charge for HSI San Diego. “The success of this investigation is in part due to our partner agencies’ cooperation and dedication to seeing these long-term investigations through to bring justice to these companies and protect American financial institutions.”

“Federal laws that regulate the reporting of financial transactions are in place to detect and stop illegal activities. Deliberately avoiding Bank Secrecy Act requirements is a form of money laundering. IRS Criminal Investigation is committed to following the money and enforcing these laws, wherever it leads” said Carissa Messick, Special Agent in Charge for IRS-CI in Las Vegas.

“Law enforcement put their collective authorities together to ensure the integrity of our financial systems and that they are not circumvented,” said DEA Special Agent in Charge Brian Clark.

As part of this investigation, 15 other defendants previously have admitted money laundering, unlicensed money transmitting, or other crimes, with associated criminal penalties of over $7.5 million.

This case was prosecuted by Assistant U.S. Attorneys Mark W. Pletcher and Carl F. Brooker IV.