Casino Pays Millions for Misleading Regulators

The Gardens Casino, in Hawaiian Gardens, is paying $3.1 million to settle allegations that its operators hid information from state regulators when applying for a state license renewal, according to the Attorney General’s Office. 

 

The Attorney General’s Office asked state regulators to revoke the licenses from both the casinos and its owners, Cherna and David Moskwitz, but they will keep their licenses in the settlement, which the state gambling commission approved on Thursday.

 

“In the gaming world, if you fail to play by the rules, expect to pay the price. Hawaiian Gardens Casino is paying the price,” said Attorney General Xavier Becerra in a statement.

In addition to the settlement, the casino will be paying a $2.8 million federal penalty and serve a two-year compliance period. 

 

The $2.8 million federal penalty results from failing to disclose their violations against the Bank Secrecy Act, an anti-money laundering law. The Financial Crimes Enforcement Network, or FinCEN, conducted the investigation that highlighted their failures in keeping accurate records, reporting suspicious activity to authorities and reporting large transactions over $10,000 – as well as identifying who was responsible for those transactions.

 

The casino, the second-largest in the state, is a staple to the economy of Hawaiian Gardens, Los Angeles County’s smallest city. The casino also employs about 1,900 people from Hawaiian Gardens and nearby cities.

 

“For better or for worse, if this thing goes bad, we would cease to exist as a city,” said Hawaiian Gardens’ City Manager Ernie Hernandez. 

 

The casino is largely responsible for Hawaiian Garden’s General Fund, which would be heavily depleted if the casino’s operations were to cease. Hernandez also states his displeasure with how Becerra is enforcing the charges. Tribal casino operators had requested stricter regulations for other casino establishments.

 

“I’m disturbed that the attorney general, who was elected by the people of California, is really catering to the tribes  –  who are technically a sovereign nation,” said Hernandez.

 

The late Irving Moskowitz had acquired the casino in 1988 when it was a bingo hall. The city had granted him $5.5 million to build a casino seven years later. Moskowitz died in 2016 and the casino is now in the hands of his wife and son

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According to the Los Angeles Times, multiple incidents were reported that contributed to the shady reputation of Gardens Casino. One incident recalls a patron attempting to cash out $14,833 from the casino and was handed an identification form, which is required for transactions over $10,000. Surveillance footage shows the individual ripping up the form and heading to a VIP section where he got another employee to serve him without filling out the form. 

 

Another 15 FinCEN reports are centered on one individual identified as “Michelle” who continues to gamble without providing identification. Gardens Casino staff continuously neglect policies set by state regulators.

 

The Gardens Casino attorney, Keith A. Sharp, released a statement to address the situation: “We are pleased to have this settlement finalized on behalf of the casino, our 2,000 employees and the community we support. Gardens Casino has strong procedures in place and several years ago we put in place the necessary corrective measures to ensure these issues do not reoccur.”

 

patrick@beachcomber.news