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Rod Smith
 

Money Laundering: Gaming Board Pushed for Probe

24 November 2003

NEVADA -- The Nevada Gaming Control Board, not the Tokyo Metropolitan Police Department, originally uncovered suspected money laundering activities taking place at local casinos by Tokyo loan shark Susumu Kajiyama and tipped off law enforcement agencies in the United States and Japan.

Gaming sources close to the investigation who asked not to be named said the Kajiyama case shows Nevada regulators and enforcement agencies have been effective and aggressive in enforcing regulations and shutting down possible money laundering operations, at least in the latest Asian financial scandal.

Gaming Control Board Chairman Dennis Neilander previously told the Review-Journal his agency has been assisting Tokyo Metropolitan Police Department and U.S. investigators in their probe of Kajiyama's alleged money laundering activities involving U.S. casinos. Neilander declined to comment on the case Friday.

However, sources in the Tokyo police agency and others in Las Vegas close to the investigation paint a picture of a much more active and aggressive law enforcement effort by the Gaming Control Board and other police agencies in Nevada.

At least one hotel-casino operator in Las Vegas is reported to have noticed suspicious behavior on the part of Kajiyama and other Japanese nationals, some of whom turned out to be associated with the so-called "Emperor of Loan Sharks."

Investigators say Kajiyama and his associates traveled to Las Vegas on many occasions and for extended periods, and picked up more than $3,000 in chips at a time in local casinos using "foreign agent accounts" to secure their gambling bets.

"Foreign agent accounts" are safety deposit accounts set up by casinos so foreign customers can deposit cash in their home countries and use the accounts as security to gamble with when they visit Las Vegas.

Kajiyama allegedly would draw on these accounts to bet at high-limit tables. However, officials at one local casino noticed he would never place big bets and his chips were being cashed in frequently for U.S. currency.

This behavior allegedly triggered the filing of required suspicious activities reports with the appropriate federal and state agencies. Casino operators generally have been required since passage of the Patriot Act to file reports on the activities of patrons that could be considered suspicious and involve $3,000 or more.

The Gaming Control Board then sent enforcement agents to the casinos and initiated an investigation, sources said.

Based on its preliminary investigations, Gaming Control notified the National Policy Agency, the main contact in Japan for foreign law enforcement agencies, and the Tokyo Metropolitan Police.

The investigations led to Kajiyama, a well-known crime figure in Japan, being arrested last week and charged with organized crimes involving leading Las Vegas casinos.

Kajiyama allegedly maintained foreign agent accounts with several major Las Vegas casinos, including MGM Grand and Caesars Palace.

Tokyo police this week said their department would not have known about the accounts or been able to determine how much money he had deposited without the information from Nevada authorities. U.S. authorities believe Kajiyama used the casinos' foreign agents to set up these accounts in the spring of 2003, if not earlier, to launder several million dollars in the United States.

He also allegedly set up a secret account in a California bank to launder money.

Investigations by the Nevada Gaming Control Board, the Tokyo Metropolitan Police Department and the attorneys general offices in Nevada and California are said to be ongoing.

The casino companies that have been tied to Kajiyama are cooperating, although MGM Mirage has declined to voluntarily hand over financial documents, such as Kajiyama's money transfer registers and bills, citing protection of patrons' privacy.

Investigators said MGM Mirage, owner of the MGM Grand, was very helpful up to a point. However, when police started asking for documents, accounts and paperwork, the company said it had a duty to protect the privacy of its patrons and that it would have to be subpoenaed if law enforcement agents want any documents on customers.

MGM Mirage spokesman Alan Feldman said it would be inappropriate to comment on the specifics of any case involving a specific guest.

Other sources said the company may be requiring subpoenas to protect it from possible litigation from patrons.

It is likely that U.S. authorities will issue subpoenas and proceed with a compulsory search of the hotel, but investigators said it will probably take several months to get the whole picture of the money flow.

Sources in Japan said they expect subpoenas to be issued in the near future, although a turf war apparently is shaping up between law enforcement agencies in California and Nevada.

The sources said this relates to Kajiyama's bank account in California, although little has become public about that financial account except that he moved large sums of money through the account.

Tom Sargent, spokesman for the Nevada attorney general's office, declined to comment on the Kajiyama case.

However, he said with regard to jurisdictional issues generally, what appear to be turf battles are often simply matters of the most effective and practical means of prosecution being worked out.

"As a matter of fairness to all involved in this and like situations, we don't comment on them until either charges are brought forward or it's dropped," Sargent said.

The sources also say it is now believed Kajiyama and his associates had one or more numbered bank accounts in Switzerland through which they also moved large sums of money.

Neilander has said he does not know if any U.S. charges will be brought against Kajiyama or any Nevada gaming operators, although he said it does not appear any casinos did anything illegal.

Still, gaming regulators and federal officials are concerned that money may have been laundered through U.S. casinos despite heightened security and tighter currency transaction controls that followed the Sept. 11, 2001, terrorist attacks.