Wynn LV agrees to pay $130m Department of Justice settlement

Wynn Las Vegas (WLV), the Las Vegas-based subsidiary of Wynn Resorts Limited, has reached a record settlement with the US Department of Justice (DoJ) agreeing to pay $130,131,645. The settlement has to do with criminal allegations levelled against the company, which will however not result in prosecution.

Wynn LV makes history with the largest DoJ settlement

DoJ alleged that Wynn LV conspired with unlicensed money-transmitting money businesses worldwide to transfer money to benefit its own operations. Prosecutors said that such attempts by reputable companies no less will be pursued with the full force of the law.

In a statement, US Attorney Tara McGrath said that casinos were "held to account when they allowed customers to evade US laws for the sake of profit."

The news did not impact Wynn’s shares, with shareholders remaining confident in the amicable outcome of the settlement, and not least – looking forward to a three-day investor day in October, which is rumored to reveal further details about the upcoming Wynn Al Marjan casino resort, which is yet to obtain the necessary license to set-up the casino floor.

McGrath said that the onus was on the federal government to ensure that illegal funds were not mixed with legitimate businesses, and that casinos remain a safe entertainment option where dirty money is not allowed.

For its part, Wynn Las Vegas may have gotten the better part of the deal, having agreed to a Non-Prosecution Agreement, which means that neither the company, nor its top brass, would face criminal prosecution providing they agree to DoJ’s terms, which they have done.

As part of the NPA, WLV admitted that it had indeed used unregistered money-transmitting businesses to bypass the established banking system that is also governed by the Bank Secrecy Act. Avoiding the act constitutes a form of money laundering, Special Agent in Charge for IRS-CI in LV Carissa Messick said in the statement released by DoJ.

Wynn’s financial transactions are partially traced to China

DoJ went out to outline several instances that it had used to build its case against Wynn LV. Among the cases outlined by the department’s press release were instances of "human head" or "human hat" betting, in which a well-heeled patron would use a proxy to place his wagers for fear of placing the wagers themselves and appearing on any paperwork, which violates both the BSA and the Anti-Money Laundering laws in the country.

DOJ said that Wynn LV allowed such behavior to occur on its gaming floor. This scheme is known as "ren tou" by its Chinese acronym.

Another instance of a scheme that the DoJ discovered on the casino’s floor was the so-called "flying money," or "qian chen" for its Chinese acronym. In this case, an unlicensed money-transmitting business collected US dollars in cash from various third parties in the United States and delivered that money to a WLV patron, who would have been barred from accessing the money otherwise.

"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," DoJ said.

Let bygones be bygones

Ultimately, DoJ has said that Wynn Las Vegas had been willing to collaborate. The investigation was carried out over the course of several years and the property has long halted the practices that landed it in trouble in the first place.

Although the company continues to derive the bulk of its earnings from its Macau operations and may soon top this up with its Middle East operations by introducing the first regulated casino in the Arab world, Wynn has been seen as a US company and fixture in the Las Vegas gaming landscape.

Previously, Steve Wynn, the company’s former ignominious boss defeated a DoJ lawsuit that wanted to force him to register as a foreign agent in favor of China.

Image credit: U.S. Department of Justice (Twitter)