GAO Report on Money Laundering and Casinos Money  Laundering and Tribal Casinos

In January, 1996, the United States General Accounting Office (GAO) produced a report for the Senate Permanent Subcommittee on Investigations, Committee on Governmental Affairs titled "MONEY LAUNDERING: RAPID GROWTH OF CASINOS MAKES THEM VULNERABLE." The report talks about federal regulations aimed at preventing money laundering in casinos through the Bank Secrecy Act (BSA) of 1970, then mentions on page 3 that "...tribal casinos were not subject to BSA, but were to report currency transactions pursuant to a more limited Internal Revenue Code (IRC) provision regarding cash received in a trade or business."

Page 23 covers some of the requirements for Indian Casinos under the IRC that should be reported on form 8300, then adds the remarkable fact that "because it contains income tax information, this form is generally unavailable to law enforcement agencies conducting money laundering or other criminal investigations." Page 28 tells us that, "In January 1993, IRS announced a delay in planned reviews of tribal casinos. This temporary delay ended in January 1994. The IRS national office directive specified that the reason for the delay was that they did not have a consistent and systematic compliance strategy' for conducting reviews on Indian lands...Officials from IRS' Money Laundering Team...said they had been developing an Indian Assistance Handbook that should 'help to create consistency in IRS district office procedures for conducting compliance reviews'...However, as of August 1995, the team manager did not know when the handbook would be published.

The GAO report makes it clear that inconsistency, lack of a compliance strategy, and regulations that effectively tie the hands of law enforcement officials will make Indian Casinos a magnet for money laundering activities by organized crime. It is likely that if the Indian Casinos are allowed to continue operating in New Mexico they will be attracting some of the most unsavory elements in organized crime, people to whom extortion, racketeering, bribery and murder are normal costs of doing their special form of business.