Wynn Las Vegas hit with massive $130m DOJ settlement in shocking money laundering case

Wynn Resorts, the operator of Wynn Las Vegas, has agreed to forfeit $130 million to the U.S. Department of Justice (DOJ) to resolve a long-standing investigation into alleged illicit financial transactions involving foreign patrons at its Las Vegas property. The forfeiture, part of a non-prosecution agreement, is considered the largest settlement of its kind for a U.S.-based casino. This investigation, which spanned nearly a decade, uncovered that Wynn Las Vegas facilitated unregulated money transfers tied to China and other foreign entities, bypassing U.S. anti-money laundering protocols.

Wynn Las Vegas forfeits $130 million to DOJ

The DOJ’s investigation into Wynn Las Vegas focused on a series of transactions involving high-rolling foreign customers, facilitated by former employees and associates. The DOJ found that these transactions were processed through unlicensed money transfer businesses, allowing Wynn Las Vegas to bypass U.S. Bank Secrecy Act and Anti-Money Laundering (BSA/AML) laws. In one notable example cited by the DOJ, a foreign patron used an unlicensed money processor to move large sums of money between China and the United States without adhering to U.S. financial regulations. The money was collected in cash in the U.S. and then delivered to the patron, who, in turn, transferred an equivalent amount in foreign currency from an overseas account to the processor’s designated foreign account​.

The settlement does not require Wynn Resorts to admit guilt but does compel them to implement extensive compliance enhancements and internal controls to prevent future violations. A Wynn spokesperson said that the company took responsibility for the actions of its former employees and third parties and cooperated fully with the DOJ’s investigation, which took into account the historic nature of the violations. The DOJ acknowledged the company’s cooperation and its steps to overhaul its compliance program before entering the settlement.

Largest settlement in the U.S. casino industry’s history

The $130 million settlement, while not officially termed a fine, is seen as a stern warning to other operators in the U.S. gaming industry. In 2013, Las Vegas Sands Corporation, another major casino operator, settled with the DOJ for $47.4 million over similar allegations involving money laundering. However, the Wynn settlement eclipses this, reflecting the seriousness with which U.S. authorities view unregulated financial activities, especially those involving international actors and large sums of money.

The Justice Department’s decision not to impose further fines or criminal charges against Wynn Resorts was influenced by the company’s extensive cooperation and its proactive measures to address the issues uncovered during the investigation. The case involved multiple U.S. federal agencies, including the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), and the Internal Revenue Service (IRS), highlighting the broad-based federal effort to clamp down on illicit money flows through the U.S. financial system.

Wynn’s compliance overhaul and shareholder impact

As part of the settlement, Wynn Resorts must continue to improve its internal controls and compliance protocols. This includes enhancing its anti-money laundering programs and ensuring more rigorous oversight of transactions involving foreign customers. Wynn Resorts stated that it has already taken significant steps to bolster its compliance efforts and that it remains committed to upholding the highest standards in the gaming industry.

Despite the financial penalty, Wynn Resorts’ stock remained relatively stable, indicating investor confidence in the company’s ability to move past these legal challenges. The resolution of this investigation removes a significant overhang for the company, allowing it to refocus on its core business operations in Las Vegas, Macau, and elsewhere. However, the shadow of the scandal may linger as Wynn continues to navigate complex regulatory environments both in the United States and abroad.

Expert opinion: implications for the gaming industry

Industry experts suggest that the settlement could have far-reaching implications for other casino operators, particularly those with significant international clientele. Compliance with anti-money laundering regulations is becoming increasingly crucial as U.S. authorities intensify their scrutiny of financial flows involving foreign entities. As the Wynn case demonstrates, failure to adhere to these standards can result in severe financial penalties and reputational damage.

This settlement sends a clear message to the gaming industry that lax compliance is not an option. U.S. regulators are prepared to enforce the law rigorously, and companies must ensure they have robust systems in place to detect and prevent illicit activities.

Moving forward: Wynn seeks closure

Wynn Resorts is keen to put this episode behind it. The company also recently settled a class-action lawsuit brought by shareholders over its handling of sexual harassment allegations against former CEO Steve Wynn. These legal resolutions suggest that Wynn Resorts is looking to turn a new page and rebuild its reputation as a responsible corporate citizen.

In conclusion, the $130 million forfeiture marks a significant moment in the U.S. gaming industry, underscoring the importance of robust regulatory compliance and the perils of engaging in or allowing unregulated financial activities. Wynn Resorts hopes to move forward, bolstered by a revamped compliance program and a commitment to transparency.