With the possibility of big payouts at Connecticut casinos, the facilities must be diligent about preventing and reporting illegal activities like money laundering.
There have been some big money laundering scandals involving Mohegan Sun and Foxwoods Resort Casino in recent years, but Connecticut casinos continue to work with law enforcement and government agencies to prevent it.
“Bad Vegan” names CT casinos’ involuntary involvement in the scandal
Earlier this year, Netflix came out with “Bad Vegan“. Through this true-crime documentary, the world saw how easily a conman could steal millions to fund a gambling addiction.
The result of celebrity chef Sarma Melngailis’ relationship with serial conman Anthony Strangis was nothing short of destructive. Estimators say that Strangis stole up to $2 million from Melngalis as well as her investors.
Strangis had a problem gambling habit that was likely out of control. He allegedly lost roughly $200K of Melngailis’ money at Mohegan Sun. And if that wasn’t enough, an additional whopping $1 million at Foxwoods Resort Casino.
The illegal fund transfers and gambling losses led to Melngailis’ not paying her employees’ wages, and taxes going unpaid. The couple eventually went on the run to avoid the authorities.
Both Strangis and Melngailis found themselves arrested in 2016, facing charges of grand larceny. Furthermore, they were pegged with tax fraud, labor law violations, and several other crimes.
But wait- there’s more
While “Bad Vegan” certainly shined a public light on financial crimes involving Connecticut casinos, this wasn’t the only time Mohegan Sun and Foxwoods found themselves at the center of similar scandals.
Connecticut representative Michael DiMassa also found herself incarcerated in October 2021 on suspicion of wire fraud. The state lawmaker faced accusations of stealing COVID relief funds, issued through the CARES Act.
DiMassa allegedly created Compass Investment Group LLC and became a coronavirus response contractor to the city of New Haven to gain relief funds. While invoices were in the ledger, and credited to the LLC, no services were provided.
The criminal complaint filed accuses DiMassa of withdrawing funds from the LLC and using it to gamble at Mohegan Sun. He purchased more than $57,000 in chips at the casino in May of 2021 alone.
“If Representative DiMassa broke the public’s trust and his oath to protect and serve his constituents and is found guilty of fraudulent activity,” said West Haven Mayor, Nancy Rossi, in a statement. “I am demanding that he and any other individuals involved be held accountable and prosecuted to the full extent of the law.”
In 2016, Rochelle Poszeluznyj, formerly an employee of Mohegan Sun, was charged with engaging in a money–laundering conspiracy at the casino while employed there.
Poszeluznyj allegedly stole casino patrons’ names and PIN numbers from their casino loyalty club cards. Co-conspirators Robert Pellegrini and Mark Heltzel then used the stolen information Poszeluznyj gave them for their own gain.
They created duplicate player accounts, loaded them with free player credits, and used them for their own gambling purposes at the casino. When everything came to light, the accused gained $422,147 in fraudulent winnings.
What preventative measures do CT casinos practice?
Casinos in Connecticut follow state regulations closely to both recognize and report activities that are suspected to be illegal.
Connecticut casinos’ reporting requirements
According to federal regulations, casinos need to keep detailed records of large transactions. Furthermore, they must report any monetary transactions to the IRS larger than $10,000.
Casinos must also report suspicious activity to the Financial Crimes Enforcement unit, which is an office of the US Dept of Treasury. Suspicious activity includes transactions that:
- Involve money gained from illegal activities
- Are attempting to disguise money gained from illicit activities
- Attempt to evade Bank Secrecy Act requirements
Training CT casino employees to recognize illegal activity
Like Foxwoods Resort Casino in Connecticut, many casinos are taking fraud prevention a step further by training employees to recognize it.
Foxwoods has partnered with Vector Solutions to implement online training for Anti-Money Laundering (AML) Compliance for the casino’s employees.
“Online training makes getting the necessary information out to our teams in a more cost-effective and efficient manner,” said Joseph Busby, Chief Compliance Officer at Foxwoods.
The fraudulent activity of criminals will continue to pop up in the gambling scene. However, Connecticut casinos are working hard to recognize it, report it, and ultimately prevent it in the future.