September 20, 2012

U.S. Regulators Concerned About Vegas Bets on Chinese VIPs

By Samuel Rubenfeld

U.S. regulators are worried about a Macau-based foreign tour industry they say exposes Las Vegas to money laundering.

Kin Cheung/Associated Press

A croupier sits at a baccarat gaming table inside a casino during the opening day of Sheraton Macao Hotel at the Sands Cotai Central in Macau on Sept. 20.

A report Thursday on Page One of The Wall Street Journal explained how some Chinese high-roller gamblers use “junkets,” as foreign-tour operators are known, to get around a requirement that Chinese residents only take $50,000 in currency abroad a year.

The junket industry, according to the Journal report, is long suspected by U.S. officials and diplomats of being involved in money laundering and organized crime.

And big U.S. casinos are increasing their bets on the business, much to the concern of regulators worried that junket operators are bringing new money laundering methods to Las Vegas.

The Journal report said the U.S. Treasury Department’s Financial Crime Enforcement Network, or FinCEN, issued a web alert last month to casinos advising them to monitor junket operations and junket patrons and report “all available information” on any suspicious activity.

Some junket industry activity on FinCEN’s radar includes obscuring the source of their funding, the method for transferring it to high rollers and the identities of the gamblers themselves, according to the Journal report.

Law enforcement authorities cited by the Journal said they’re concerned about casinos moving junket deposits across borders for patron gambling, but with little scrutiny. Without that due diligence, the fund movements carry high money-laundering risks, the authorities say.

Read more about Chinese VIPs using the Macau junket industry here

http://blogs.wsj.com/corruption-currents/2012/09/20/u-s-regulators-concerned-about-vegas-bets-on-chinese-vips/