USA: FinCEN’s First Card Club Enforcement Action Leads to $650k Settlement with California’s Oaks Card Club

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December 17 2015

The Financial Crimes Enforcement Network (FinCEN) today announced its first settlement with and assessment against a “card club” gaming establishment.   Oaks Card Club d/b/a Oaks Club (Oaks), of Emeryville, California admits that it violated the program and reporting requirements of the Bank Secrecy Act (BSA).  The settlement and FinCEN’s assessment requires Oaks to pay a fine of $650,000 for willful violations of the BSA.

Among its failures, Oaks relied on an inaccurate and misleading anti-money laundering (AML) policy to train its staff. The AML policy failed to provide instructions, or provided wrong instructions, concerning the card club’s BSA obligations and filing of BSA reports.  For example, it encouraged employees to provide notice to patrons if they were about to conduct a cash transaction that would put them over the $10,000 threshold for the filing of a Currency Transaction Report, thereby possibly encouraging structured transactions.  The policy also lacked instructions on when an employee should file a Suspicious Activity Report (SAR). The Oaks filed no SARs in 2009 and 2010.