WASHINGTON — Today, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a finding and notice of proposed rulemaking (NPRM) that identifies transactions involving ten identified Mexico-based gambling establishments as a class of transactions to be of primary money laundering concern. FinCEN proposes to sever these gambling establishments’ access to the U.S. financial system by imposing a special measure prohibiting covered financial institutions, as defined in the NPRM, from opening or maintaining a correspondent account for any foreign banking institution if such account is used to process transactions involving any of the following gambling establishments: (1) Emine Casino (San Luis Rio Colorado, Sonora); (2) Casino Mirage (Culiacan, Sinaloa); (3) Midas Casino (Agua Prieta, Sonora); (4) Midas Casino (Guamúchil, Sinaloa); (5) Midas Casino (Los Mochis, Sinaloa); (6) Midas Casino (Mazatlan, Sinaloa); (7) Midas Casino (Rosarito, Baja California); (8) Palermo Casino (Nogales, Sonora); (9) Skampa Casino (Ensenada, Baja California); and (10) Skampa Casino (Villahermosa, Tabasco). FinCEN assesses that these gambling establishments are ultimately controlled by a criminal group with a longstanding and transactional financial relationship in which they facilitate money laundering for the benefit of the Cartel de Sinaloa (Sinaloa Cartel), a national security threat that undermines the stability of the U.S. financial system.
“Treasury and the Government of Mexico have been coordinating to safeguard our financial institutions from the Sinaloa Cartel and its illicit financial activities,” said FinCEN Director Andrea Gacki. “Treasury will continue working to protect the U.S. financial system from abuse by illicit actors and will use all its tools and authorities to target the financing of transnational criminal organizations.”
For years, the gambling establishments targeted today, and their senior leadership have directly and indirectly facilitated money laundering benefiting the Sinaloa Cartel, a Mexico-based drug trafficking organization (DTO). These establishments sent illicit payments to senior cartel members, and their senior leadership received detailed instructions from the Sinaloa Cartel on ways to avoid detection by financial institutions’ anti-money laundering screening systems. Pursuant to section 311 of the USA PATRIOT Act (section 311), FinCEN may impose certain measures upon finding that reasonable grounds exist for concluding that one or more classes of transactions within, or involving, a jurisdiction outside of the United States is of primary money laundering concern, and on that basis, may require covered financial institutions to take certain “special measures.” Today’s NPRM proposes a rule pursuant to section 311 prohibiting covered financial institutions from opening or maintaining a correspondent account for any foreign banking institution if such account is used to process transactions involving any of the gambling establishments.
This action was taken in coordination with the Government of Mexico and concurrently with Treasury’s Office of Foreign Assets Control, who sanctioned persons in the criminal group responsible for laundering the proceeds of narcotics trafficking in collaboration with the Sinaloa Cartel, among other activities.
Filing Suspicious Activity Reports (SARs)
Today’s NPRM does not propose a new or amended SAR reporting obligation. However, consistent with their existing SAR reporting obligations, covered financial institutions may consider, as warranted and appropriate, FinCEN’s finding that transactions involving the gambling establishments targeted today are a class of transactions of primary money laundering concern. If a SAR is filed on transactional activity involving any of the Gambling Establishments, FinCEN requests that financial institutions enter “FIN-311-Gambling-Establishments” in Field 2 (Filing Institution Note to FinCEN) and in the narrative.
Whistleblower program
FinCEN maintains a whistleblower incentive program for violations of the BSA. Individuals located in the United States or abroad who provide information may be eligible for awards if the information they provide leads to a successful enforcement action—which may include, for example, an enforcement action related to a covered financial institution violating the special measure described herein if such measure becomes effective through the issuance of a final rule—that results in monetary penalties exceeding $1,000,000. FinCEN is currently accepting whistleblower tips.
The NPRM as submitted to the Federal Register is currently available here. Written comments on the NPRM may be submitted within 30 days of its publication in the Federal Register.