Artichoke Joe’s Casino has agreed to a record $5.3 million fine for purposely misleading California state gaming regulators and violating a federal law tailored to deter money laundering.
The California Department of Justice (DOJ) announced yesterday that a settlement had been reached between the state and 51-table cardroom located just west of San Francisco International Airport. The casino agreed to pay the penalty for failing to notify the California DOJ’s Bureau of Gambling that it was the subject of a federal investigation by the Financial Crimes Enforcement Network (FinCEN).
Federal investigators were probing the casino for possible violations of the Bank Secrecy Act of 1970, federal legislation designed to combat money laundering. The California Gambling Control Act of 1998 requires casinos to make timely disclosures to the state regarding FinCEN or any other federal agency examining its business.
Artichoke Joe’s admitted to violating the Bank Secrecy Act in the federal review.
Artichoke Joe’s has 45 days to pay the state the $5.3 million fine, plus reimburse the Gambling Bureau for its costs related to the inquiry. The casino will additionally be under a 36-month compliance period where state gaming agents will keep close tabs on the cardroom’s operations.
Casino Concedes Shortcomings
In its settlement with federal prosecutors, Artichoke Joe’s admitted to routinely failing to file Suspicious Activity Reports (SARs) during a more than eight-year span that ran from October 2009 through November 2017.
The Bank Secrecy Act requires businesses that handle large amounts of cash to assist the US government in detecting and preventing money laundering.
The federal law necessitates financial institutions, including casinos, to file a SAR no later than 30 calendar days after the transaction. Casinos must additionally file a Currency Transaction Report (CTR) for any person transacting more than $10,000 in a single 24-hour period.
Artichoke Joe’s said it didn’t meet the federal guidelines during that eight-year period. Along with the $5.3 million state fine, the casino will pay $5 million to settle the FinCEN case.
Casino Claims to Have Changed
This isn’t the first time Artichoke Joe’s has come under investigation by federal and state authorities. A decade ago, the California DOJ alleged that the cardroom was engaged in loan shaking and illegal drugs. The charges of selling narcotics were later dropped, but the casino did not contest the allegation of issuing illegal loans. Artichoke Joe’s settled with the state in 2011 by way of a $575,000 fine.
The casino says it has overhauled its business, and is fully complying with state and federal laws and regulations.
Artichoke Joe’s has worked hard for the last few years to put in place Bank Secrecy Act controls that meet rigorous and very complex federal standards, and this settlement was an acknowledgement that our efforts have been successful,” said Artichoke Joe’s President Vince DeFriese.
Artichoke Joe’s was opened in 1921 by Joseph Sammut, who made his money in artichokes. His son Dennis Sammut owned the casino until his death in February of 2020. The Sammut family continues to control the casino.
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