Thursday, June 19, 2003
Copyright © Las Vegas Review-Journal

Commission to get MGM Mirage case

The Nevada Gaming Commission today will consider approving the proposed $5 million settlement to end the civil case involving MGM Mirage's failure to file almost 15,000 anti-money laundering reports with the federal government.

The stipulated settlement was agreed to last month by the attorney general's office, the Gaming Control Board and the casino company.

The settlement will not be final, however, until it is approved by the commission, and Chairman Peter Bernhard said no decisions will be made until arguments are presented to the commissioners by the attorneys involved.

Industry insiders have suggested the state needs to act decisively in this case because of the increasing federal scrutiny being given to anti-money laundering and anti-terrorist regulations.

Government officials have said they expect the fine, the largest penalty ever imposed in the state's history against a casino company, will be approved, but they expect substantial discussion about whether MGM Mirage has done enough to make sure the problem is never repeated.

Sources close to the commission who asked not to be named told the Review-Journal they believe the $5 million fine fits the severity of the rule violation because it apparently involved one individual repeatedly failing to file the same reports over an 89-week period.

Two internal audits at The Mirage failed to uncover the fact the reports were not being submitted to the federal government although the documents were being completed.

Regulation 6A requires casinos to track cash transactions of $3,000 or more and to submit currency reports to the Treasury Department whenever such transactions by any individual total more than $10,000 in a 24-hour period.

Over an 18-month period ending in December 2002, the Mirage failed to submit 14,903 Regulation 6A currency transaction reports to the Treasury Department's Financial Crime Network.

MGM Mirage Chairman and Chief Executive Officer Terry Lanni in a statement last month called the problem "an administrative error," but Chief Deputy Attorney General Elizabeth Quillen, who is handling the on-going prosecution, said the former Mirage executive who was criminally charged in the case conduct acted deliberately so the problem was not a clerical problem.

Christopher Morishita, the former Regulation 6A compliance officer for The Mirage, has been criminally charged in the case and is scheduled to be arraigned Monday in Las Vegas Justice Court.

Like MGM Mirage, Park Place Entertainment agreed to a $75,000 settlement on Feb. 28 after finding it failed to file two transaction reports in December 2000 and December 2001.

Station Casinos also is under investigation for its failure to file regulation 6A reports, control board officials said earlier this month. That investigation allegedly involves "hundreds" of reports.