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Feds Issue $8 Million Fine To California Poker Room Over 'Loan Sharking' At Property

Anti-Money Laundering Rules Violated At Artichoke Joe’s, Government Says


The federal government on Friday said that it has fined a California-licensed card room $8 million over “willful violation of anti-money laundering controls.”

A government body known as the Financial Crimes Enforcement Network (FinCEN) announced the civil money penalty against Artichoke Joe’s Casino, a card room equipped with 17 traditional poker tables and about three dozen other card tables. It’s one of about 90 licensed card rooms in the state.

FinCEN said that the casino violated federal anti-money laundering laws from 2009 to this year. “For years, Artichoke Joe’s turned a blind eye to loan sharking, suspicious transfers of high-value gaming chips, and flagrant criminal activity that occurred in plain sight," said Jamal El-Hindi, Acting Director of FinCEN. The San Bruno card club violated the Bank Secrecy Act, the feds said.

“Casinos, card clubs and others in the gaming industry should consider their risk of exploitation by criminal elements, and understand that they will be held accountable if they disregard anti-money laundering and illicit finance laws,” El-Hindi warned.

The government called the fine a “significant action,” adding that it “recognizes the duration and severity” of the violations. The penalty is the largest ever issued against a card room, businesses which fell under the oversight of FinCEN about 20 years ago.

The card room was raided in March 2011, which led to a racketeering indictment and the conviction of two customers for loan sharking and other illicit activities.

“There were several instances in which loan sharks provided AJC chips to customers on the gaming floor within plain sight of AJC employees,” FinCEN said.

The FinCEN fine against AJC comes about two years after the agency issued its first ever enforcement action against a California card room. There was a similar action taken last year as well, that time against the Hawaiian Gardens Casino. In April of this year, the Bicycle Casino, another California card room, was shut down briefly over a money laundering investigation.

In addition to the $8 million fine against AJC, California gambling regulators are investigating the property for allegedly failing to disclose the money laundering probe. The license could be revoked, according to the accusation made public last week.