A judge in the Commonwealth of the Northern Mariana Islands (CNMI) has ruled that the U.S. Department of the Treasury has the authority to regulate casinos on the Pacific archipelago, reports the Saipan Tribune newspaper.
Although CNMI is a U.S. territory with commonwealth status similar to that of Puerto Rico, the long reach of U.S. federal regulation does stretch there and covers issues such as anti-money laundering, said the newspaper. It quoted a ruling from Northern Mariana Islands Chief Judge Ramona V. Manglona.
The U.S. government filed in November last year 158 criminal charges against Hong Kong Entertainment (Overseas) Investments Ltd, relating to a local gaming property called Tinian Dynasty Hotel and Casino. The charges included 155 counts of failure to file currency transaction reports (known as CTRs).
Hong Kong Entertainment had moved to dismiss the federal indictment on grounds that the company was not obligated to file CTRs because the U.S. Congress had not given the U.S. Treasury the authority to regulate casinos in the CNMI.
In denying Hong Kong Entertainment’s motion to dismiss, Judge Manglona pointed out that from its inception in 1970, the U.S. Bank Secrecy Act granted the Treasury Secretary authority to expand the term ‘United States’ to include “the possessions of the United States”.
In June 2014, George Que, a VIP services manager from the Tinian property was one of several managers that accepted a deal with the local U.S. District Court. Mr Que had been charged with a conspiracy to allow gamblers to conduct transactions involving more than US$10,000 without filing the required paperwork with the U.S. government, reported the Saipan Tribune at the time.
The indictment, which was first filed in May 2013, also charged a casino manager named Tim Blyth. Mr Blyth accepted a similar deal from an assistant U.S. attorney, whereby what is known as a deferred prosecution agreement was concluded.
Imperial Pacific International Holdings Ltd – a firm that started life as a frozen food business before acquiring the rights to a profit stream from a Macau junket investor – is planning a casino operation on the main CNMI island of Saipan.
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Analyst at Roth Capital Partners