Las Vegas casinos fined for Bank Secrecy Act violations

The MGM Grand and the Cosmopolitan Casino in Las Vegas have been fined $7.45 million by the US Department of Justice.

The penalties relate to breaches of the Bank Secrecy Act, which requires gambling operators to file reports on all suspicious transactions.

In addition to the financial penalties, both venues will undergo an external review and enhance their anti-money laundering (AML) compliance programs.

“Financial institutions have a duty under the law to report criminal or suspicious activity occurring at the institution though SARs,” said first assistant United States Attorney Joseph McNally. 

“Our office will aggressively prosecute corporate executives and employees who turn a blind eye to criminal actors depositing illegal funds at casinos and financial institutions.”

The penalties were handed down on Thursday (Jan. 25) after Scott Sibella, a former president of the MGM Grand, pled guilty a day earlier to one count of failure to file reports of suspicious transactions.

Sibella was the president of the MGM Grand from between August 2017 and February 2019, during which time he knew that a casino patron, Wayne Nix, ran and operated an illegal bookmaking business. 

The DoJ found that despite this knowledge, Sibella allowed Nix to gamble at MGM Grand and affiliated properties with illicit proceeds generated from the illegal gambling business without notifying the casino’s compliance department.

Sibella admitted to law enforcement in 2022 that he believed Nix was involved in illegal sports bookmaking, but “didn’t want to know because of my position,… If we know, we can’t allow them to gamble…. I didn’t ask, I didn’t want to know I guess because he wasn’t doing anything to cheat the casino.”

Sibella will be sentenced at a hearing on May 8, at which time he will face a maximum penalty of five years in prison and a fine of $250,000.

“Mr. Sibella’s willful violation of Bank Secrecy Act obligations to report suspicious activities put the credibility of the MGM Grand at risk,” said special agent in charge Tyler Hatcher of the Los Angeles field office of IRS Criminal Investigation. “The BSA mandates reporting of suspicious activities to protect financial institutions from becoming participants in money laundering activities often benefitting criminal or terrorist organizations. 

“While president of MGM Grand, Mr. Sibella undermined the trust and confidence of his employees, customers and regulating agencies, and for that he will be held accountable. Additionally, the non-prosecution agreements with MGM Grand Hotel, LLC and The Cosmopolitan of Las Vegas should serve as notice to other casinos and financial institutions that evading BSA obligations can carry severe consequences, and we will investigate suspected non-compliance.”

The MGM Grand and The Cosmopolitan casinos have entered Non-Prosecution Agreements (NPAs) to resolve a related investigation into alleged money laundering and violations of the BSA, with each accepting responsibility for laundering Nix’s illicit funds and failing to properly file suspicious activity reports.

Under the NPAs, MGM Grand will pay a monetary fine of $6,527,728, and forfeit $500,000 in proceeds traceable to the violation, which will be counted towards the fine. The Cosmopolitan agreed to pay a monetary fine of $928,600, and to forfeit $500,000 in proceeds traceable to the violation, which also will be counted towards the fine.