FinCEN Moves to Cut Off U.S. Financial Access for Ten Mexico-Based Casinos Linked to Sinaloa Cartel

On November 13, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a formal finding and a notice of proposed rulemaking (NPRM) declaring that transactions connected to ten specific gambling operations in Mexico constitute a class of activity posing a primary money laundering threat.

The agency laid out a proposal to block these establishments from utilizing the U.S. financial system by instituting a special measure that would bar covered financial institutions, as defined in the NPRM, from opening or maintaining correspondent accounts for any foreign bank if those accounts are used to conduct transactions associated with any of the following gambling entities: (1) Emine Casino in San Luis Rio Colorado, Sonora; (2) Casino Mirage in Culiacan, Sinaloa; (3) Midas Casino in Agua Prieta, Sonora; (4) Midas Casino in Guamúchil, Sinaloa; (5) Midas Casino in Los Mochis, Sinaloa; (6) Midas Casino in Mazatlan, Sinaloa; (7) Midas Casino in Rosarito, Baja California; (8) Palermo Casino in Nogales, Sonora; (9) Skampa Casino in Ensenada, Baja California; and (10) Skampa Casino in Villahermosa, Tabasco. FinCEN stated that these gambling businesses are ultimately under the control of a criminal network with a long-running financial arrangement that enables extensive money laundering on behalf of the Cartel de Sinaloa, a national security threat that the agency says jeopardizes the integrity of the U.S. financial system.

“Treasury and the Government of Mexico have been coordinating to safeguard our financial institutions from the Sinaloa Cartel and its illicit financial activities,” FinCEN Director Andrea Gacki said. “Treasury will continue working to protect the U.S. financial system from abuse by illicit actors and will use all its tools and authorities to target the financing of transnational criminal organizations.”

According to FinCEN, these targeted gambling establishments and their high-level operators have, for years, played a direct and indirect role in laundering funds for the Mexico-based drug trafficking organization. They allegedly transferred unlawful proceeds to senior cartel figures and received explicit guidance from cartel leadership on methods to circumvent anti-money-laundering controls maintained by financial institutions. Under section 311 of the USA PATRIOT Act, FinCEN is authorized to determine that certain categories of transactions involving a foreign jurisdiction represent a primary money laundering concern, and, based on such a finding, impose “special measures” requiring U.S. financial institutions to take specific mitigating actions. The proposed rule issued through the NPRM seeks to prohibit covered financial institutions from maintaining correspondent accounts for foreign banks if those accounts facilitate transactions tied to any of the named casinos.

This action coincided with coordinated efforts by the Government of Mexico and with sanctions issued by the Treasury’s Office of Foreign Assets Control targeting individuals involved in laundering narcotics proceeds for the Sinaloa Cartel and related criminal activity.

FinCEN emphasized that the NPRM does not create or modify any Suspicious Activity Report requirements. Nevertheless, the agency noted that financial institutions, under their existing obligations, may factor in FinCEN’s finding when assessing transactions tied to the listed casinos. If a SAR is filed involving any of these gambling establishments, FinCEN asks that institutions include “FIN-311-Gambling-Establishments” in Field 2 (Filing Institution Note to FinCEN) as well as within the narrative section.

FinCEN also highlighted the availability of its whistleblower incentive program for individuals—whether in the United States or abroad—who submit information about potential Bank Secrecy Act violations. Eligible whistleblowers may receive awards if their information leads to a successful enforcement action generating monetary penalties above $1,000,000, including any action resulting from violations of the proposed special measure should it be finalized. FinCEN noted that it is currently accepting whistleblower submissions.

The NPRM is publicly accessible, and written comments may be submitted within 30 days of its publication in the Federal Register.

By fLEXI tEAM