The Financial Crimes Enforcement Network leveled some pretty serious charges against the Sparks Nugget Inc. dba as John Ascuaga’s Nugget on April 5 as it announced a $1 million civil penalty.
According to FinCEN’s statement, the resort casino “admitted that it willfully violated the anti-money laundering (AML) provisions of the Bank Secrecy Act (BSA).” Casinos are required to implement and maintain an effective AML program, maintain records of certain transactions, and to file reports relating to transactions in currency and suspicious transactions.
Such reports are valuable to law enforcement investigators seeking to follow money trails and solve crimes. “Sparks Nugget egregiously and willfully violated AML program requirements, reporting obligations, and recordkeeping requirements,” the statement said.
“Sparks Nugget had a systemic breakdown in its compliance program,” said FinCEN Director Jennifer Shasky-Calvery. “Despite the fact that it hosted convicted embezzlers and had been repeatedly alerted to suspicious transactions by its own BSA compliance manager, Sparks saw no need to re-think its AML defenses.”
Shasky-Calvery continued, “Sparks disregarded its compliance manager. It chose not to file rightfully prepared Suspicious Activity Reports (SARs) and it instructed that person to not interact with the Internal Revenue Service’s BSA auditors and prevented that person from reviewing a copy of the completed exam report.
“Sparks Nugget also committed hundreds of recordkeeping violations, and failed to report several Currency Transaction Reports (CTRs) as well as SARs. The management committee Sparks Nugget established to determine whether to file SARs never held a single meeting, and some committee members were unaware that they were even on the committee. Sparks Nugget lacked any mechanism to document or otherwise account for decisions not to file SARs, and its day-to-day managers maintained that no suspicious activity ever transpired in the millions of dollars of transactions that occurred at the casino.”
FinCEN said the Nugget used its software systems and employees to gather large amounts of information about its customers in order to improve profits, provide personalized customer service, and to minimize the casino’s business risk.
The investigation from FinCEN, a bureau of the U.S. Treasury Department, surfaced in February when court documents filed as part of a legal fight over the 2013 sale of the casino from the Ascuaga Family to Wolfhound Holdings LLC.
The Ascuaga family released a statement that it was “pleased” to see the fight with Wolfhound Holdings come to a close. “As members of the Northern Nevada business community for over 60 years, we have always strived to operate with integrity and decency,” the statement read. “That being said, we understand the seriousness of the FinCEN assessment and are satisfied that this matter has been resolved.”
News of the FinCEN investigation led Michonne Ascuaga, the Nugget’s former CEO, to resign from the Nevada Gaming Commission in February. Gov. Brian Sandoval said he was not aware of the investigation when he appointed Ascuaga to the commission. Ascuaga has said she was not the target of the investigation, and she is not named personally in either FinCEN’s public announcement or its penalty assessment.
The Nugget again has been sold. Wolfhound Holdings announced in February Marnell Gaming LLC would purchase the Sparks icon. Marnell on April 6 received the approval it needs from the Nevada Gaming Control Board to purchase of the property. Pending final approval from the Nevada Gaming Commission later this month, the deal is expected to close in May.