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In 1984, the federal government was becoming increasingly sensitive to the problems of money laundering by criminal elements involved with the drug trade. In October of 1984, Congress passed the Bank Secrecy Act (BSA).1 The purpose of this act, which became known as Title 31, was to require all banks and financial institutions to record and report all cash transactions which exceeded $10,000 during a particular time period. Although the original purpose of the BSA was to deter money laundering, the reporting requirements also served to notify the government about other types of large cash transactions which may or may not have been the result of criminal activity. More recent purposes have included identifying terrorist activity. background By 1995, the Department of the Treasury and the department which became responsible for the enforcement of Title 31 Compliance—the Financial Crimes Enforcement Network (FinCEN)—became increasingly aware of the need to include other types of organizations within the scope of the Bank Secrecy Act. At that time, they began to move aggressively to redefine the term “financial institution”—contained in the original legislation—to include casinos and a number of other businesses. This redefinition allowed FinCEN to extend the reporting obligations of Title 31 to casinos. After implementation of this rede finition, casinos throughout the country were required to track larger cash transactions involving patrons, other businesses, and in some cases even their own transactions, and report them to the federal government. In the early 1980s, the state of Nevada recognized that casinos were by c h a p t e r 1 5 Currency Transaction Reporting, Suspicious Activity Reporting, and Title 31 Currency Transaction Reporting 413 their very nature involved with very substantial cash transaction activity. The Nevada Gaming Control Board originally issued Regulation 6A, which for many years has been the standard to which Nevada casinos have had to comply . This regulation also had the effect of limiting the application of the antimoney -laundering statute to casinos in other jurisdictions for many years. For the period from the mid-1980s until 2005, there were essentially two sets of currency transaction rules in place. In Nevada only, Nevada Gaming Control Board Regulation 6A was the standard. In the rest of the country, including the expanding tribal casino industry, federal law—Title 31—was the standard. In 2006, the Nevada regulators finally agreed with the casino industry to eliminate the duplication and made Title 31, the federal law, the standard for anti-money-laundering compliance in Nevada.2 Money Laundering in Casinos: The term “money laundering” does not refer to the physical cleaning of money—mostly currency—but rather to a process involving several critical features. The first purpose of money laundering is to take a multitude of small denomination bills and try to change them into larger denomination bills. The second purpose is to take currency in large amounts and deposit it into bank accounts or other financial instruments. These bank accounts or financial instruments can be more easily transported or electronically transferred to other bank accounts around the world. The last purpose of money laundering is to take money from questionable or criminal sources, and try to make the source appear reasonable and legal. (An added feature of this step might be to change the criminal source funds into nontaxable, legitimate source funds.) These are often referred to in statutory parlance as: placement—moving money into legitimate financial institutions; layering—disguising or hiding the sources of the funds through multiple complex transactions; and integration—moving the funds into the legitimate economy as normal business transactions. Since large gaming winnings in a casino represent a legitimate and common explanation of large amounts of currency, the casino industry was suspected of being a center of illegal money-laundering activity. The casino industry was thus targeted by FinCEN as an area where money laundering should be monitored and where Title 31 reports should be required.3 k e y compliance requirements The general compliance requirements under Title 31 require all casinos that have a gross annual gaming revenue of over $1 million to adhere to the requirements of the Bank Secrecy Act. In general, this requires three broad categories of action. The first is the responsibility of the casino to implement systems and procedures to identify and report all transactions which exceed $10,000 in cash in the casino during a single business day. The second is to [13.58.151.231] Project MUSE (2024-04-23 23...

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