Trump Taj Mahal Associates LLC agreed to the assessment of a $10 million civil penalty by the Treasury Department’s Financial Crimes Enforcement Network, according to a consent order filed with the U.S. Bankruptcy Court in Wilmington, Delaware back in 2015.
The penalty took the form of a general unsecured claim in Trump Taj Mahal’s bankruptcy.
In exchange, Trump Taj Mahal admitted to have willfully violated reporting and record-keeping requirements under the federal Bank Secrecy Act from 2010 to 2012.
The Trump Taj Mahal casino broke anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s, according to the IRS in a 1998 settlement agreement.
It’s a bit of forgotten history that’s buried in federal records held by an investigative unit of the Treasury Department, records that congressional committees investigating Trump’s ties to Russia have obtained.
The records included the 1998 settlement, draft and final copies of a similar settlement in 2015, and exchanges between the Trump casino lawyers and federal regulators.
The 1998 settlement was publicly reported at the time, and the Associated Press noted it was the largest fine the federal government ever slapped on a casino for violating the Bank Secrecy Act.
But key details of the casino’s cash reporting violations are missing from the publicly released documents.
The White House declined to comment, referring questions to the Trump Organization.
According to a dozen anti-money laundering experts, casinos often run into these problems. But getting caught with 106 violations in the casino’s opening years is an indicator of a serious problem, they said.
The violations date back to a time when the Taj Mahal was the preferred gambling spot for Russian mobsters living in Brooklyn, according to federal investigators who tracked organized crime in New York City. They also occurred at a time when the Taj Mahal casino was short on cash and on the verge of bankruptcy.
Trump took on an enormous amount of debt to launch what was – at the time – the world’s largest, most flamboyant casino.
The Taj Mahal emerged from bankruptcy in late 1991, and Trump sold 50% of his stake to bondholders.
There were also financial issues at a second location in Atlantic City, The Trump Castle Hotel Casino, according to a 1991 New Jersey Gaming Enforcement report.
In the report, regulators described an incident on December 18, 1990, the day Trump owed an $18.4 million interest payment.
An attorney named Howard Snyder walked into the Castle casino with a certified check for $3.35 million drawn from a bank account belonging to Fred C. Trump. Snyder exchanged the check for 670 of the casino’s gray gambling chips, which he put into a case. He then walked out of the casino.
By not cashing out the chips, the transaction amounted to a loan, regulators said.
New Jersey gaming regulators charged Trump’s operation with violations of the state’s Casino Control Act for not disclosing his father as a financial backer.
FinCEN caught the Trump Taj Mahal dodging anti-money laundering rules again two decades later. In 2015, it fined the casino $10 million.
In the consent order, the casino admitted it “willfully violated” the Bank Secrecy Act’s “reporting and recordkeeping requirements from 2010 through 2012.”
There was “apparent laundering of funds” using slot machine tickets, according to the 2015 consent order. And the casino didn’t keep track of gamblers who deliberately cashed out in smaller payments to avoid having to report it to the federal government.