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‘Oversight’ leads to $5M fine

May 27, 2003 4:41 AM

MGM Mirage will pay a $5 million fine under an agreement with the State Gaming Control Board over the company’s failure to send in nearly 15,000 cash transaction reports to the federal government as required by the board to prevent money laundering.

MGM Chairman and Chief Executive J. Terrance Lanni on Friday termed the problem an "oversight" and said that Nevada gaming regulators had concluded the company had properly filled out the cash reports and did not attempt to launder money.

"As the state investigation confirmed, this matter did not involve money laundering but was, instead, a very serious administrative oversight," Lanni said.

Company officials said in a news release that the forms, numbering about 14,900, have since been filed.

Nevada casinos are required under state Regulation 6A to fill out the cash transaction reports, or CTRs, when patrons make cash transactions totaling more than $10,000 in a day.

The IRS forms then must be sent to the U.S. Treasury Department’s Financial Crime Network’s office in Detroit for processing. The gaming board, not the federal government, has jurisdiction over civil and criminal penalties involving CTRs from casinos in Nevada.

The cash reports were found by company officials at MGM’s The Mirage hotel in December. Mirage employees had neglected to file the reports over a period of 18 months.

Two days before the fine agreement was announced last week, former Mirage employee Christopher Morishita was arrested on four felony counts of failing to file the CTRs. Eight other employees were fired or left the company voluntarily, MGM said.