Mar 2013 employee & supr training

Title 31 Compliance Program

(As Required by Law)

March 2013

Available on Ultipro

• The Bank Secrecy Act (BSA) was passed by Congress in 1970 in response to increasing reports of nationwide money laundering

• The act was amended in 2001 to provide tools to restrict, and obstruct terrorism

Background

Important Issues

• Exchange of cash between the Casino and it’s customers – In or Out – over $10,000.

• Employees must be trained at least annually.

• Law is designed to stop the bad guys.

• Suspicious Activity Hot Line:

• 425-888-8550

Your Job

• Sign the registration form. Add last name!

• Write notes on the outline form.

• Take and Pass the test.

My Job

• Tell you why it’s important to you.

• Tell you why it’s important to the Casino.

• Tell you why it’s important to the Federal Government.

Why are you here?

You’re Here because:

• It’s the law!

• Supervisor says you have to attend!

• No Fines!

$25,000 Fine

• FEDERAL LAW PROHIBITS EMPLOYEES FROM INFORMING THE PATRON THAT A SUSPICIOUS ACTIVITY REPORT IS BEING COMPLETED AND FILED WITH THE IRS.

What is this lady doing?

What is Title 31? Question # 1

• Anti

• Money

• Laundering

• Program

Guess Who’s Coming Soon!

Who should you contact #2

Test Question

• Title 31 regulations provide guidelines for the Internal Revenue Service (IRS) to tax our customers for their winnings at the Casino.

–True False

Title 31 Officer # 3

–Who is this person?

–Outside Auditor Example – EJ!

What is Structuring? # 4

Structuring

• Buying in @ $9,900.

• Cashing out @ $9,900.

• Does it happen at Snoqualmie Casino?

Is it a crime? #5

Table Games Example

• Mr. Lee does a cash for cash exchange at the Cage for $2,000.

• Mr. Lee buys in for $4,000.

• Mrs. Lee, as an agent, buys in for $5,000.

• The Lee’s win and walk with $15,000.

• Mr. Lee cashes out for $9,900.

• Is this reportable as a CTRC or SARC?

CTRC and/or SARC

• Cash In:

• $2,000

• $4,000

• $5,000

• $11,000

• Cash Out:

• $2,000

• $9,900

• $11,900

What do we need? #6

Photo ID

• Valid US State-issued Driver’s License or ID Card – Recently updated – Enhanced License

• Valid Passport

• Valid Alien (Resident or Non-Resident) ID Card

• Other valid Government issued ID – Military Identification (Cannot Copy or Scan)

• Tribal ID

What if they say no! #7

Aiding and Abetting!

• Accessory to a Crime – like structuring!

Suspicious Activities

• Need to report:

– When we know.

– When we suspect.

– When we have reason to suspect.

Test Question

• Call the Director of Table Games immediatelyif you see a suspicious activity in the Casino.

–True

–False

SARC’s by State - 2011

• WA 291

• NV 3,283

• NJ 3,540

• Combined Total 1,505,823

Suspicious Acts #8

• Table Games - $7,000 in small bills

• Slot Machine – Ticket In & Ticket Out

Why Launder Money?

Drug Dealer’s House

Drug Dealer’s Desk

Drug Dealer’s Living Room

Jackson Junction - $250,000!

No Internal Controls

No TrainingNo

Compliance Officer

Late CTRC’s Late SARC’s

You’re Fired!!

First Bank of Delaware

• November, 2012:

• Fined $15,000,000 for failure to implement an effective BSA program.

• Lost their charter!

Standard Chartered Bank

• December, 2012:

• Has agreed to pay $327,000,000 for charges that it laundered money on behalf of (4) countries subject to U.S. economic sanctions.

Title 31 Cards

• Title 31 Cards are available thru out the Casino.

• Don’t discuss these cards with anyone other than a Casino employee.

• Questions will be answered by a Supervisor, Department Manager, or Title 31 Officer.

Title 31 Cards

• Helping a patron by giving Casino reporting information and/or structuring information:

• May be considered a “willful violation” by the Internal Revenue Service (IRS)

• Punishable by fines and /or jail terms

Compliance

• It is extremely important to remember that employees cannot give information to patrons regarding Title 31 reporting requirements.

• Doing so is a violation of the law.

Gaming Day?

• Gaming Day – 6:00 am thru 5:59 am of the next

morning. Don’t ever disclose this information!

• Sounds like an important question – let me get

my Supervisor!

Willful Violation! #9

• Any conversation that would help a patron structure their transactions.

• Telling a patron the gaming day.

• Telling a patron to stay under 10K.

Agent Question # 10

• When two or more customers are sharing chips and/or cash – they are Agents for each other!

Title 31 Violations

• Prohibited Transactions – more than $3,000 in cash for cash in gaming day

• Failure to log transactions

• Failure to obtain information

• Structuring or Circumventing transactions

• Disclosing gaming day information

• Attend training prior to being employed

• Failure to report – having “knowledge”

• Being a “No Show” for a scheduled class

Title 31 Violations

• 1st Violation – Verbal warning

• 2nd Violation – Written warning / Retraining

• 3rd Violation – Final Written Warning - Retraining

• 4th Violation - 3 day unpaid suspension given within a reasonable time frame and Mandatory Retraining

• 5th Violation - Termination

• Violations stay on record for 12 months

My Job

• Tell you why it’s important to you.

• Tell you why it’s important to the Casino.

• Tell you why it’s important to the Federal Government.

Your Job

• Sign the registration form.

• Write notes on the outline form.

TIME FOR THE TEST!

Question # 1

• The Title 31 Compliance Officer for Snoqualmie Casino is:

– A. Linda Smith.

– B. James Walker.

– C. Fritz.

– D. Chris Cummings.

Question # 2

• What is Title 31?

– A. A law written by the banks.

– B. A law to tax our patrons.

– C. A law written to stop crime.

– D. A law for anti money laundering.

Question # 3

• What are the reasons for taking the Title 31 training?

– A. It’s the law.

– B. No fines.

– C. Supervisor says you have to.

– D. All of the above.

Question # 4

• The gaming day for Snoqualmie Casino starts at:

– A. 8:00 pm.

– B. 6:00 am.

– C. 9:00 am.

– D. None of the above.

Question # 5

• An IRS agent wants to ask you some questions – what should you do?

– A. Take your coffee break immediately.

– B. Tell them you’re too busy.

– C. Tell your Supervisor.

– D. Call Security.

Question # 6

• What is a willful violation?

– A. Telling a customer the gaming day.

– B. Telling a customer to stay under $10K.

– C. Helping a customer structure.

– D. All of the above.

Question # 7

• Title 31 regulations provide a way for the IRS to tax the Casino:

– A. Yes if the amount is over $10K.

– B. Absolutely not.

– C. Yes for some of our lucky players.

– D. Yes but only for citizens of the US.

Question # 8

• A player attempts to buy in for $12,000 but refuses to provide their ID. We should:

– A. Refuse to do it.

– B. Do it but warn the customer.

– C. Call Linda Smith immediately.

– D. Call Security.

Question # 9

• Casino’s must report a suspicious activity if we:

– A. Know it appears to be suspicious.

– B. Suspect it to be suspicious.

– C. Have reason to suspect it’s suspicious.

– D. All of the above reasons.

Question # 10

• An acceptable ID is:

– A. A library card.

– B. A current passport.

– C. A Costco card.

– D. A voters registration card.

Title 31 Compliance Program

(As Required by Law)

March 2013

Opportunity Cost / Loss

• Growth requires Investment.

• Investment requires Cash.

• Cash grows better with No Fines.

• No Fines = Investment = Growth!

No Shows

• Training for all current employees involved with conducting gaming transactions relating to Title 31, will be provided at least annually with a test at the end of each training session. Failure to be present at either the mandatory classes scheduled during department “block” times or the makeup class is subject to disciplinary action by the department. Department managers are to report the reason for the employee’s absence to the Title 31 Compliance Officer.

How are we doing?

0

500

1000

1500

2000

2500

20

10

20

11

20

12

CTRC's

CTRC's

0

20

40

60

80

100

120

140

20

10

20

11

20

12

SARC's

SARC's

Window of Opportunity

• Limited but available.

• Email as soon as possible!

• Reduces violations and/or exceptions.

Violations

• Violations are:

– More Serious – probably result in fines.

– Involve federal regulations & investigations.

– Violate our Policies & Procedures.

Exceptions

• Exceptions are:

– Clerical errors.

– Not CTRC related.

– Probably not subject to fines.

SARC’s

• 1. Structuring – just below $10,000.

• 2. Using Others to Structure – agents.

• 3. Minimal Gaming – not here to play.

• 4. False Identification / Information.

• 5. Pressuring Casino Employees.

• 6. Unusual Transactions.

• 7. Refusing to provide ID and/or W-9.

$1,900,000,000 Settlement

Policies, Procedures, and Controls

• Changes:– Available on Ultipro– NeWave – July 2009– Supervisors and Above Classes– Disciplinary Process – Emphasis on Training– Agents – All Transactions Linked – Surveillance Requirement - $8,000 Threshold– Cash In at the Cage = Cash In at Table Games– TLS may be reported as Cash In– Military ID – Cannot Scan or Copy

• What happens if we don’t comply? $25K Day

Ongoing Training Program

• How are we doing?

– English as a second language issue!

– How do we improve?• Videos• Language Assistance• Suggestions

• What happens if we don’t comply? $25K Day

IRS Training Questions

• What employees will receive training?

• When will they be trained?

• How are they trained?

• Will you test employees?

• How often do you update the training?

• What actions are taken if employees do not adhere to policies?

Independent Review

• How are we doing?

• BDO – CPA Auditors.

• E. J. Egghart, MBA, CPA.

• Prepares us for IRS audit!

The Value of the BSA

• 32 law enforcement agencies participate.

• 42% of terrorism subjects - BSA reports.

• Disrupt illicit financial activity.

• 1.5 Million SARC’s in 2011.

IRS Assessment

• Adequacy of written program.

• Determine if fully implemented.

• Is Casino at risk for BSA violations?

• Is Casino at risk for money laundering?

• Is Casino at risk for terrorist financing?

Referral to FinCEN

• Lack of an adequate AML Program.

• Failure to implement AML Program.

• Breakdown of Internal Controls.

• Not in compliance with policies.

• Inadequate testing, training.

• History of non-adherence to procedures.

• What can happen to the Casino?

Penalties for Non-Compliance!

• Amount of Currency Involved:

• For Structuring (example: $9,900 x 3 visits = $29,700) + 3 days of non-reporting ($75,000)

• Attempting to Structure

• Assisting in Structuring

What are we required to do?

• Written AML Policies & Procedures (Ultipro).

• Compliance Officer.

• Report Cash Transactions > $10,000.

• Report Suspicious Activities.

• Training Program – Logs – Tests.