The Bank Secrecy Act (BSA), which was expanded and strengthened by the passage of the USA PATRIOT Act in 2001, requires “financial institutions” to help the federal government detect and prevent money laundering. The businesses it defines as “financial institutions” include not only banks, but securities broker dealers, money services businesses, operators of credit card systems, the insurance industry and casinos with more than $1 million in gaming revenue. All of them are required to implement an anti-money laundering program.
One way in which this law aims to combat money laundering is by requiring the covered institutions to fill out currency transaction reports (CTR) for transactions that meet any of 37 criteria that would mark them as suspicious.
There are very specific guidelines for filling out and filing transaction reports, and if these are not followed, the Financial Crimes Enforcement Network (FinCEN), which administers the BSA, can fine the offending casino heavily. In 2003, one large Las Vegas casino chain was fined a record $5 million for failing to appropriately file CTRs under Nevada’s own anti-money laundering statute, which has since been repealed in favor of the BSA rules. Frank Salensky, president of AP-ID Inc., says that many compliance problems have to do with filing inconsistencies, such as having a single person filed under John Doe, John D. Doe and John David Doe.
Before a casino patron can complete the forms necessary for the casino to file a CTR, the casino must authenticate his or her ID documents. This can prove difficult for some casinos, and the BSA doesn’t offer detailed specifics on how it should be done. Salensky’s company sells a hardware/software product that can scan any of 2,000 types of government-issued domestic and foreign identification documents, make a two-sided color copy of it, validate its authenticity, and run it against multiple watch lists in around five seconds.
Tribal casinos have been acclimating to the BSA rules for years, but until recently, Nevada casinos were exempted from complying because there were strict state laws already governing this arena. On June 30, 2007, the federal government officially took over. Nevada casinos will need to catch up on compliance quickly.
For information on the BSA, visit www.fincen.gov. FinCEN maintains an FAQ on the site specifically for casinos dealing with the BSA rules.
Marleah Blades is senior editor for the Security Executive Council, an international professional membership organization for leading senior security executives spanning all industries, both the public and private sectors, and the globe. The Security Executive Council maintains a large and growing list of laws, regulations, standards and guidelines that impact security (https://www.securityexecutivecouncil.com/public/lrvc). For more information about the council, visit www.SecurityExecutiveCouncil.com/?sourceCode=std.