Artichoke Joe’s Casino is a popular card room in California that was recently hit with a huge, record-breaking fine for violating a federal law connected to money laundering detection. The cardroom must pay $5.3 million after the state’s attorney general’s office ruled the operator misled regulators.
Huge State Penalty
The casino, located in San Bruno, did not properly report an investigation that took place by the federal Financial Crimes Enforcement Network. This failure led to the huge penalty, that the cardroom has agreed to pay.
The state penalty is a secondary payment the casino has to pay on top of the $5 million connected to a federal settlement where the operator did not have effective anti-money laundering practices in place. The operator did not report suspicious activity for many years, from 2009-2017.
The Artichoke Joe’s has yet to comment publicly on the huge payment that must be made due to the failings. The 51-table cardroom is highly successful in the state, ranked as the 8th largest when it comes to gross gambling revenues.
A Troubled Past
Ten years ago, state gambling regulators came out with accusations against the cardroom, stating they were involved in loan-sharking activities. The facility was also suspected of illegal drug sales and not reporting violations in the appropriate manner.
The operator did not fight back on the illegal loans’ allegation. The state decided to drop the illegal drug claims and reporting issues. At the time, in 2011, a federal investigation led to an indictment involving the casino and racketeering. Two casino customers were convicted along with others for taking part in illegal activities including loan-sharking.
Federal regulators said the customers and the employees of the card room worked together in the illegal activities. The loan-sharks would provide unlawful credit to customers, using the casino to conduct business dealings.
Gaming chips were used as payment. The investigation found that some employees were in the know about the loan-sharking program and sometimes even helped with the transactions.
Federal authorities went on to state that the casino did not fix the problems connected to the 2011 settlement. Back in 2016, the casino did not monitor a customer for money laundering, even though within a three-month time frame, the individual complete over $1.8 million in gambling activities.
For not taking action, the casino must now pay the huge penalty. It is by far the largest to be paid by a gambling facility in the state of California. It beats the previous record by over $2 million. In 2019, the Hawaiian Gardens Casino was fined $3.1 million.