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Casino fined over failure to report ‘drug dealer’, ‘tax evader’ to watchdog

Casino fined over failure to report ‘drug dealer’, ‘tax evader’ to watchdog

A casino’s failure to report potentially suspect activities by an alleged drug trafficker and another player linked to bribery and tax evasion has landed it in hot water with the FIAU.

In a public notice, the anti-money laundering body announced it had fined Casino Malta, which is run by Eden Leisure Gaming, €233,000 for certain serious and systemic failures in its measures to prevent financial crime.

Casinos are expected to maintain tight control on gamblers, due to the prevalence of money laundering in the gambling industry.

The FIAU highlighted how, in one case, a registered plasterer facing drug trafficking accusations was allowed to continue to wager “substantial amounts”, despite a freezing order.

Although the casino was “unaware” of the freezing order, it knew that the player was facing drug trafficking proceedings in court but failed to report his potentially suspicious activities to the FIAU.

In another case, a formerly politically exposed person was allowed to bet “great amounts of cash”, despite his alleged involvement in bribery and tax evasion.

Again, the casino failed to make a suspicious transaction report to the FIAU.

Yet another player with €500,000 in unpaid taxes was allocated a low-risk rating by the casino, despite the company having adverse records suggesting that this customer had been involved in “fraudulent events which included tax evasion”.

Student with links to China gambles €200,000

The casino was found to have also tolerated large cash drops by customers, without adequately questioning the source of those funds.

In one example, the FIAU said a student “with links to China” gambled €200,000 in cash and lost €80,000.

The FIAU said the casino had not provided it with any reassurances about how the student could afford such substantial amounts in a relatively short period of time between January and December 2019.

A CEO “with connections to Turkey” also wagered huge cash amounts without being challenged by the casino about his wealth.

The FIAU said the casino allocated the player a medium-risk rating, which was subsequently increased to high. The player dropped over €1 million at the casino, the majority of which amount was in cash, using eight different bank accounts.

Contrary to its anti-money laundering obligations, the FIAU noted how the casino failed to gather any information or documentation on the player’s source of funds and wealth.

The FIAU said the ultimate aim of anti-money laundering controls is to capture potentially suspicious transactions or activity.

The casino expressed surprise and disappointment at the size of the penalty given its investment to adhere to anti-money laundering legislation, including software and human resources.

It also said it was happy at the FIAU’s acknowledgement of improvements following its compliance visit and added it was evaluating the way forward.

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