Wynn Las Vegas forfeits $130M in San Diego settlement

The casino Wynn Las Vegas agreed Friday to forfeit a record $130.1 million to settle criminal indictment brought by federal prosecutors in San Diego that the casino conspired with unlicensed money transmitting businesses around the globe to circumvent US laws and financial regulations.

“Today’s settlement is believed to be the largest forfeiture by a casino based on admissions of criminal wrongdoing,” the US Attorney’s Office in San Diego said in a statement announcing a non-prosecution agreement with the casino.

Federal prosecutors in San Diego handled the case because a key bank account controlled by Wynn Las Vegas for one of the alleged criminal schemes was located here. Foreign gamblers and debtors, many of them from Latin America, placed funds into the local account through unlicensed money transmitting businesses. Those funds were then transferred to the Wynn’s cage, where casino employees, with the knowledge of their supervisors, eventually moved the funds into the gamblers’ individual accounts at the casino.

“The convoluted transactions enabled foreign gamblers at (Wynn Las Vegas) to evade foreign and US laws governing monetary transfer and reporting,” the US Attorney’s Office said in its statement.

Federal prosecutors said high-ranking executives of the company were involved in the conspiracy and involved in facilitating financial transactions for individuals who they knew had ties to criminal organizations or had been publicly linked to illegal gambling and other financial violations. The non-prosecution agreement signed Friday requires the casino to comply with a list of obligations for the next two years and pay the forfeiture amount in two installments to avoid criminal charges.

“Wynn Resorts is committed to acting with the highest integrity and in full compliance with all laws and regulations governing our industry,” the company said in a statement provided by a spokesperson. “The improper actions that are the subject of the settlement were undertaken by individuals with whom we severed ties years ago. The actions of these individuals, for which Wynn has accepted responsibility, date back many years and violated Wynn’s compliance policies and procedures. We are pleased that the Company has now resolved this long-standing legal matter.”

The non-prosecution agreement drafted by prosecutors confirms that Wynn Las Vegas “no longer employs or is affiliated with the individuals who were implied or involved in” the conduct in question.

The casino said in its statement that it also recently settled a class-action lawsuit filed by some of its shareholders. Those shareholders sued in February 2018 in connection with the company’s response to the sexual misconduct accusation against Steve Wynn, the company’s founder and former chairman and CEO who also served as finance chair for the Republican National Committee.

“Beginning in 2018, we took decisive action to transform our workplace environment and governance and begin a new chapter for Wynn,” the company said in its statement. “These settlements are the final milestone in that process, as we put legacy issues fully behind us and focus on our future.”

The non-prosecution agreement includes an eight-page statement of facts laying out a series of criminal prosecution and alleging that the conspiracy began no later than July 2014. The casino acknowledged in the agreement that those facts “are true and accurate and that (the ) United States would have proven the facts if this case had proceeded to trial.”

Among the examples given in the statement of facts are stating that center around an Argentine, Juan Carlos Palermo, who acted as an independent agent for the casino. Palermo operated multiple unlicensed money transmitting businesses based in the US and abroad that conducted more than 200 transfers, in excess of $17.7 million, with bank accounts controlled by Wynn Las Vegas or associated entities. Prosecutors said the use of Palermo’s accounts allowed his gaming clients — many of whom came from countries designated as major money launderers by the Department of State — to transfer funds and exchange currency while circumventing US and other nations’ laws.

Palermo guilty to related charges in April 2022 in San Diego federal court, but also agreed to a two-year deferral of judgment as part of a deal to cooperate in the Wynn Las Vegas investigation. A judge dismissed the case against him earlier this year after prosecutors confirmed he forfeited $200,000 and complied with the terms of his deferral agreement.

Prosecutors said the Wynn Las Vegas also took part in two Chinese gambling schemes. One known as “human head” or “human hat” involved a person purchasing chips at the casino and gambling as a proxy for another person who was unable to gamble or unwilling to conduct financial transactions due to federal banking and anti-money laundering laws.

“The true patron, however, would direct the Human Head’s gaming,” prosecutors said in a statement. “(Wynn Las Vegas) knowingly allowed this form of gambling without scrutinizing the true patron’s funds and without reporting the suspicious activity.”

A second scheme known as “flying money” involved the Wynn Las Vegas allowing patrons who it knew could not lawfully access cash in the US to do so through independent third parties and a series of foreign currency transfers involving foreign bank accounts and unlicensed money transmitting businesses .

Prosecutors said 15 other defendants previously paid more than $7.5 million in criminal penalties and admitted to money laundering, unlicensed money transmitting and other crimes as part of the investigation into Wynn Las Vegas.

Originally Published: September 7, 2024 at 10:05 am