U.S. District Court Issues Final Order of Forfeiture Against Hong Kong Entertainment (Overseas) Investments, Ltd, D/B/A Tinian Dynasty Hotel & Casino in the Amount of 2.5 Million

            Saipan, CNMI - ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced the successful forfeiture of $2,500,000 from Hong Kong Entertainment (Overseas) Investments Ltd., d/b/a Tinian Dynasty Hotel & Casino (“TDHC”).  The forfeiture comes months after the United States Attorney’s Office and TDHC entered into a Non Prosecution Agreement which required the casino to forfeit millions in proceeds traceable to criminal violations.  Specifically, the agreement required THDC to administratively forfeit $536,969.12 as well as the $2,500,000.00 contemplated in the U.S. District Court’s Final Order of Forfeiture.  Together, these sums represent the largest forfeiture by the United States in NMI history.  The Agreement also obligates TDHC to fully cooperate with the United States in ongoing criminal investigations and to comply with federal reporting and other regulatory requirements.  The United States — in its sole discretion — can rescind the Agreement and initiate criminal proceedings should the Government determine that TDHC has failed to comply with any provision of the Agreement.

            In her Final Order of Forfeiture, U.S. District Court Chief Judge Ramona V. Manglona ordered that the casino’s rights, title, and interest in the $2,500,000 are now vested with the United States of America.  U.S. Attorney Limtiaco stated, “This forfeiture is the culmination of a year-long investigation.  The persistent and dedicated efforts of IRS Criminal Investigators were instrumental in recovering these funds.  The IRS Criminal Investigation, the U.S. Attorney’s Office, and the Department of Justice will continue to partner together to ensure casinos, financial institutions, and businesses comply with the requirements of federal law and other financial regulations.” 

            “The Bank Secrecy laws were enacted to curtail the movement of ill-gotten gains through our financial institutions.  When one of those entities shirks their duty and fails to comply with the law requiring the examining and reporting of certain financial transactions, it creates an entry point for would-be criminals to circumvent rules intended to frustrate and detect their criminal enterprises.  Together with the U.S. Attorney’s Office, we will continue to monitor the gaming industry to ensure the integrity of our financial markets,” stated Special Agent in Charge Teri Alexander of IRS Criminal Investigation.

            Federal law known as the Bank Secrecy Act (BSA) requires that financial institutions and certain businesses, including casinos with annual gaming revenue in excess of $1 million, be vigilant in detecting and reporting activity that may indicate that money laundering, or other financial crimes, are being committed, and that the casino implement and maintain an effective anti-money laundering program.  The BSA requires casinos to file a “Currency Transaction Report for Casinos” (CTR-C) for transactions that involve more than $10,000 in cash.  Cash includes the coins and currency of the United States and foreign countries. The law requires that casinos and businesses report transactions when customers use cash in a single transaction or a related transaction occurring within a 24-hour period. 

            On November 20, 2014, a federal grand jury returned a Second Superseding Indictment that charged TDHC with one count of conspiracy to fail to file CTRs in violation of 18 U.S.C. § 371 and 31 U.S.C. §§ 5313(a), 5322(b) and 5324(a)(1) and (d)(2); 155 counts of failure to file CTRs in violation of  31 U.S.C. §§ 5313(a) and 5322(b); one count of failure to file a SAR in violation of 31 U.S.C. §§ 5313(a), and 5322(b); and one count of failure to maintain an effective anti-money laundering program in violation of 31 U.S.C. §§ 5318(h) and 5322(b).

            According to filings with the Court, TDHC did not fully identify and disclose all individuals whose gambling activities should have legally triggered a BSA report.  From October 1, 2009 through April 25, 2013, TDHC failed to document over $138 million in reportable cash transactions.  It is estimated that TDHC failed to report 3,640 separate cash transactions during this same time period.