Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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11/4/2008 Junket Operators Pose Growing Risks for Casinos

A casino gets a busload of foreign tourists. Ostensibly because of language problems the tour conductor buys chips for the entire group. The players do not appear to be particularly wealthy but make large bets. Surveillance cameras detect that many of the players, upon losing money, appear to engage in conversations with one member of the group who is himself not gambling. After these conversations, in several instances, the tour conductor buys more chips and gives them to the gambler who has lost money. In guidance on risk-basing anti-money laundering/counter-financing of terrorism programs for casinos, the Financial Action Task Force notes that junket operators are an emerging problem in some areas of the world. Criminal organizations may be providing cash to participants in such gambling junkets, then collecting most of the winnings as a way of laundering money. Some casinos license junket and tour operators but fail to implement any system to detect potential money laundering activities. The FATF guidance will be analyzed in a forthcoming issue of the Monitor, and some additional red flags will be added to the Red Flag Checklist.

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