It isn’t often that a big name casino comes under investigation for money laundering these days. That was not the case years ago, but today big casinos steer away from that type of action. Even so, Caesars Palace is now said to be under federal investigation that it allegedly laundered money. This information was reported in a filing to the Securities and Exchange Commission.
On Oct 11, the company says that it received a letter that came from the US Department of Treasury, Financial Crimes Enforcement Network. In this letter, it was said that Desert Palace Inc., which is the subsidiary that runs and operates Caesars Palace, would be investigated for alleged violations that fall under the Bank Secrecy Act. It said that this investigation would determine what, if any, further legal action would be taken against Caesars Palace. A spokesperson for the company did not have a comment to make. But, with the news, Caesars stock fell nearly 5 percent, hitting $17.81 on the New York Stock Exchange.
In the filing that Caesars sent to the SEC, it said that another grand jury action would be ongoing. This grand jury investigation is separate from the other allegation. The company has said, in its written filing to the SEC, that it plans to cooperate with authorities in both of these matters. The SEC filing went on to say: “Based on proceedings to date, the registrant (Caesars) is currently unable to determine the probability of the outcome of these matters or the range of reasonably possible loss, if any.”
The SEC filing went on to note that in recent years, many of the government’s authorities have been placing more emphasis on money laundering through new procedures and policies and procedures, many of which seem to be concentrating on the gaming and casino industries. It should be noted that some of these investigations are coming up with results especially as it may pertain to Russian mob activity within the gaming industry.
It was also reported that this money-laundering allegation had been reported within the same filing (to the SEC) that had disclosed that Caesars was going to pull out its bid for developing a new casino at the Suffolk Downs racetrack which is close to Boston. Caesars was a minority partner in that deal. No further details were forthcoming at this time as all of this news went to press and went public. But, there was more bad news as well as another report came to surface that may lead to many more problems for Caesars in the near future.
It was also reported that Caesars has now received a report that came from the Massachusetts Gaming Commission. In this report the commission said that it was questioning the Caesars suitability due to its relationship with Gansevoort Hotel. It should be noted, however, that Caesars severed its ties with the Gansevoort Hotel group. This group has been alleged to having some ties with mobsters in Russia. The group has also pulled its bid on the proposed Massachusetts casino project.