One of the most successful cardrooms in California has agreed to pay a record-setting penalty after an investigation uncovered federal violations. Artichoke Joe’s Casino must now pay $5.3 million as a penalty for misleading regulators in the state’s gambling industry and for violating federal law connected to anti-money laundering.
Huge Fine Issued
The casino is located near San Francisco in San Bruno and caters to poker players from across the US and beyond. For many years, the casino has operated as a successful cardroom but in recent years, has been under investigation for major compliance failures.
A report was provided by the federal Financial Crimes Enforcement Network after the investigation was completed, showing the penalty had been agreed upon by the operator as well as what the penalty stemmed from.
The majority of the money, $5 million, was part of a federal settlement that has to be paid due to the casino failing to have anti-money laundering procedures in place. The casino is also accused of failing to report activity that was deemed suspicious in a time frame of around eight years, from 2009-2017. The amount owed the most to ever be paid to date by a cardroom in California.
In a statement, Vince DeFriese, the president of the casino, said that the venue worked hard for the past few years to put controls in place regarding the Bank Secrecy Act. These controls meet the federal standards and the settlement is an acknowledgment that the venue’s efforts have been a success.
A Little History
About 10 years ago, regulators in California began to accuse the cardroom of conducting loan-sharking as well as selling illegal drugs. The business was also accused of failing to report violations that took place. In the settlement, Artichoke Joe’s agreed to the illegal loans but did not agree to any of the additional accusations.
An investigation from 2011 resulted in an indictment of racketeering. Investigators found that customers of the property were involved in loan sharking among clients. They also uncovered that employees took part in the illegal loan sharking activities.
The loan sharks would provide a line of credit to casino customers, which they did not have the right to do. They openly used the venue to conduct the activities and even use the gaming chips of the club to do so. It was discovered that some casino employees knew about the activity and some even took part.
The casino was also accused of not properly monitoring guests. In one instance, a customer was able to complete over $1.8 million in transactions in a three-month time frame. This individual should have been noted and reviewed but the casino took no action.
For now, it seems the casino is doing what it needs to so that operations can continue. The casino has been in business since 1916 and is a staple in the community. There is no doubt that the venue is working hard to clear its name and continue to be a contributor to the community, with entertainment as well as revenues.
