Nolan Dalla: Who’s the Greater Financial Risk — Negreanu or Bank of America?

[TightEnd]

i thought this was an interesting read

http://www.nolandalla.com/too-shameful-to-fail-on-big-banks-and-poker-playing/

are there problems in the UK for poker pros/poker transactions?

[rfgqqabc]

It's definitely a problem within the gambling community as a whole.  Frequent cash deposits are a big flag and have led to people being shut down at certain banks. I think there was some discussion  on Alexs diary a while ago and I know honeybadger had issues too.

[Simon Galloway]

I'm certainly not going to defend the banks.

However, sometimes poker players do seem to forget the hoops that normal society has to go through.  Casually tossing $50k transfers around the system is always going to generate STRs left right and centre and be a pain for any institution with a reporting obligation to have to try and untangle.  Not many AML officers will witness a 50k cash deposit and transfer and say to themselves, "lol, looks like he had some swingy OFC last night"  The sometimes trotted out "it's my money, I'll do what I like with it" isn't too well thought out, imo.

That said, I also know lots of responsible pro gamblers that have had heat/closures from BoA on any transactions linked to a gambling source.  It obviously is easier to drop their business than it is to figure out how to service their accounts whilst meeting their obligations to the various authorities.

[tikay]

It's not as simple as some might think though, is it? We can blame the Banks all day & night, but the AML regulations are a nightmare, & woe betide an institution that ignores them.

Even Online Gaming Sites now have to employ a full time team of AML staff, who themselves sit in the ever-expanding "Compliance" Department.

We can either blame the regulations, or the reasons the regulations were installed - money launderers.

Blaming the Banks is blaming a symptom, not the cause.  And yes, the Banks are everyone's Pantomime villains, so we like booing them. Whether that's fair is another matter.

[doubleup]

There was a guy proudly posting on the Betfair forum that in 2015 he had deposited £35k and withdrawn £39k, evidencing a small winning year.  So presumably his turnover on a gambling site was likely to be at least as much as his "legitimate" income.  100% he has a flag on his account. 

I can't begin to imagine what DN's turnover would be like.  His activity would certainly be indistinguishable from massive scale laundering.

[Tal]

Could you imagine if the banks were fine with what someone like Mr N puts through his accounts?

"Paying $200,000 in are we? Certainly sir"

"Withdrawing $200,000, sir? No problem"

"Good day at the office, sir? One million exactly."

If you were the sort of unscrupulous fellow who would quite like to clean up some drug money, you'd be off to Las Vegas, have a nice little chat with a chap with patches on his shirt and, the next time he goes to make a deposit, it's now

"Three hundred and fifty thousand dollars, sir." No one would mind if the next day, $150,000 of it is wired to another account.

It's not a stain on DN's character, but a reflection of the risks to the business of facilitating the transactions. 

One wonders why it's taken until now for it to be an issue.

[horseplayer]

Having worked for two major banks within the last decade

Anybody who turnovers/gambles upto or above their salary WILL be flagged.

In most instances it is random as to which accounts are actually looked at in depth and then potentially shut.

That is why some have different experiences with the same bank.

[RED-DOG]

I'm certainly not going to defend the banks.

However, sometimes poker players do seem to forget the hoops that normal society has to go through.  Casually tossing $50k transfers around the system is always going to generate STRs left right and centre and be a pain for any institution with a reporting obligation to have to try and untangle.  Not many AML officers will witness a 50k cash deposit and transfer and say to themselves, "lol, looks like he had some swingy OFC last night"  The sometimes trotted out "it's my money, I'll do what I like with it" isn't too well thought out, imo.

That said, I also know lots of responsible pro gamblers that have had heat/closures from BoA on any transactions linked to a gambling source.  It obviously is easier to drop their business than it is to figure out how to service their accounts whilst meeting their obligations to the various authorities.

STR's, AML officers, Reporting obligation, Flags?

Can someone walk me through all this using simple words please?

[doubleup]

1 suspicious transaction report
2 anti money laundering officer
3 reporting obligation see 1
4 flag = when some activity causes 2 to potentially consider doing 1 because of 3

[RED-DOG]

1 suspicious transaction report
2 anti money laundering officer
3 reporting obligation see 1
4 flag = when some activity causes 2 to potentially consider doing 1 because of 3

So are they obliged to report only the transactions that they consider to be suspicious? Do they have discretion?

I mean, if they are aware that customer X is a poker player who regularly makes large deposits/withdrawals why would they consider such a transaction suspicious?

[doubleup]

5 jobsworth


Most of the 2's are 5's (and its difficult to blame them as theoretically they could be fined banned by the FCA.)

Money laundering has three broad processes

Placement - this is cash entering the financial system.  It is the most difficult phase and normally requires a crooked bank or banker for large volumes but cash businesses are used as well.  I won the money gambling is also a tactic.

Layering - this is moving the money about to hide its origin.  For instance by depositing it on a gambling site and then withdrawing it or transferring it to an associate's account.  Making investments and then cashing them in, buying and and selling cars property etc.

Integration - this is where the money with its origin disguised is now "legitimate" probably as investments/property in the name of the original criminal owners.  

All the stages of money laundering can be successfully accomplished in one, simply by creating the facade of a successful poker player/staker.  (just saying)

edit superfluous apostrophes added

[RED-DOG]

Most of the 2's are 5's (and its difficult to blame them as theoretically they could be fined banned by the FCA.)

Thanks for that detailed answer. It was really enlightening.

Some years ago when I was in the motor trade I used to deposit and withdraw the price of a decent van or car and no one ever raised an eyebrow. Then the other day I deposited a few grand in cash and was grilled about it's origin. I know the staff at the bank fairly well so I asked about it and was told, "We have to report cash deposits over a certain amount". I asked what the amount was but they said they weren't allowed to tell me.

Because of that, I assumed that the size of the deposit was above a set level triggered the flag.

[Simon Galloway]

Pretty much covered ^^ Tom, but a few more snippets for you.

First of all, it is a decade or more since I could claim to be up to date on anything in that field, so things may definitely have changed.  Lots of money laundering crimes had a theoretical jail tarif of 7 years.  In theory, it was possible (not sure if it ever happened) that the AML officer for the bank/financial institution deemed to have been complicit in the crime could be held singly accountable and also face jail time.  To get that, he would certainly have to have been incompetent/negligent in the extreme, but you can start to see why they weren't interested in taking any chances.

Vegas, I think anything >$5k gets you paperwork.  Bank transfers of $10k+ seem to also appear on radars.  I assume they are hard and fast limits above which, a certain process must be followed.  A poker player winning $10k in a cash game might not cash out, he might ask for 10x $1k chips or 2 x $5k chips as a "colour up" rather than for bills.  If his intent was to circumvent the reporting process, then he is guilty of some crime or other.  If his intent was to get something smaller for his pocket, then he isn't guilty, as far as I am aware.  How do you prove what he was up to?  

Next take the market stall owner.  "Everything on my barrow is £1." At the end of a busy day, and with a big barow, he now has £300 in coin.  The bank want to charge him as a small business for handling that much change, and the tax man is interested in his profit.  The market stall holder decides to go into the casino and feed £300 into a slot machine and get a TITO payout which he takes to the cashier.  Has he now just got free coin handling services from the casino?  Was he giving sufficient level of action to be considered a bona fide gambler?  Did he want paying out in cash, or did he want a cashier cheque?  Small beer either way, but an alert casino wouldn't put up with it for very long before feeling obliged to take action.

Next take the market owner.  He owns all the stalls.  He's got £5k on him in grubby fivers and tenners, walks up to a roulette table and asks for £100 chips.  He might place £100 on red and win or lose, go to the cashier.  Or he might place £2k on red and stay there gambling for an hour, ending up eventually with £5100.  Then either way, he will go to the cashier.  It is now 3 in the morning and he doesnt fancy walking home with £5k on him, so he asks for a winner's cheque.  Is this a false player that has just got free note changing service (and a free dinner) or possibly intending to under-report his busines profit by £5k with an "I won at the casino" defence.  Or is it a genuine player, welcomed by the casino, taking legitimate gambles and making reasonable use of the amenities provided?  The ridiculous ones stand out like a sore thumb, but there are always areas of grey that people can exploit to some degree.

Next take Daniel Negreanu.  Obv I have no idea of his business dealings, but as this thread was about him losing his BoA, I thought I'd bring it around.  On his various tweets, he often reports his profits and his profits adjusted for swaps/pieces.  From memory, he would normally do better not to swap, but that is ofc up to him.  Imagine when he hits something for $2M and has to settle up with a handful of players.  In theory, the paperwork from the casino should tell a reasonable story of how he came about $2M and why he now needs to spread $400K around to a few select individuals.  I know from personal experience that if you sit in front of a tax accountant and try and explain how you just sent someone $5k that you never met before with no paperwork, no contract and no signatures, it is a tough one to get through.  While no-one even blinks in the poker world, the poker world often forgets how removed from mainstream society it sometimes is.  Placing his account under additional scrutiny costs the bank time and money, as well as having to adopt some risk that they are having their pants pulled down and at some point, they will be up in front of the beak with egg on their face after appearing to have failed to have prevented a crime.  That's not to say that I think DN is guilty of any crime (ok, guilty of one or two of the crimes levelled at him by the camel perhaps..) and I'm sure I'd rather swap $10k on a handshake with DN than with the CEO of BoA.  But from a BOA business perspective, it might be genuinely hard to figure out how you are going to make any money out of having this guy's account open, whilst simultaneously having to stand a level of risk that you are not comfortable with.

[tikay]

Steve Wynn's casino Empire - some say - was founded on laundering Mafia money.

Mafia guy arrives from New York or Chicago with $1 milly in small denom grubby bills, changes it into chips, gambles low variance High Low or Red Black on Roulette for 2 days & cashes in for £900,000 in clean money.

Repeat that regularly, & it all adds up. Tough to prove though. 

[arbboy]

Steve Wynn's casino Empire - some say - was founded on laundering Mafia money.

Mafia guy arrives from New York or Chicago with $1 milly in small denom grubby bills, changes it into chips, gambles low variance High Low or Red Black on Roulette for 2 days & cashes in for £900,000 in clean money.

Repeat that regularly, & it all adds up. Tough to prove though.  

Numerous betting shops only remain open because of drug dealers using FOBT's to clean their money.  There was an interesting article a few months ago about it.  They are happy to bet red/black and zero and iron out 2.7% to 'clean' their money.  None of the big firms would comment on it but privately they all know it goes on and are more than happy to take the cut of their illicit trade providing the service.

I love using FOBT's to empty my bell's bottle (does anyone still have a bell's bottle to collect their coins in?  I have had one since a kid) of coins twice a year and turn them into notes.  Given how little these shops accommodate my betting business i get a sick amount of pleasure from ploughing £300 of coins of all denominations down to 5p's into a machine then having one spin for £1 then cashing out straight after and turning my coins into clean crispy notes.  Not exactly money laundering but great entertainment to certain betting shop manager types who make it their business to refuse your business.

http://www.theguardian.com/uk-news/2013/nov/08/gambling-machines-drug-money-laundering-bookies