Friday, October 30, 2020

UKGC Fines Silverbond Enterprises £1.8m After Money Laundering Investigation

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The UK Gambling Commission (UKGC) has fined Silverbond Enterprises, the operating company behind the Park Lane Club casino in Mayfair, London, £1.8m ($2.2m) following a recent investigation.

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Park Lane Club had failed in its enhanced due diligence checks, breaching its anti-money laundering responsibilities

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Housed inside the Hilton Hotel Park Lane, the prestigious club has been under review since February 2016. It was further inspected after Silverbond owner Vassilijs Melniks was arrested on money laundering charges in August 2018.

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The UKGC found that the Park Lane Club had failed in its enhanced due diligence (EDD) checks, breaching its anti-money laundering responsibilities. Around 250 of the club’s top customers had not had the relevant checks carried out.

Software found to be insufficient

Despite the UKGC issuing repeated warnings to put in place measures for EDD checks on all customers, the company continued to rely on open-source third-party software to verify customers. These were later found to be insufficient.

Further details on the investigation also came to light in the UKGC executive summary. Silverbond had not kept up-to-date records for customer engagements. It had also failed in further due diligence measures that were included in their licensee requirements, such as the need to identify a customer’s source of funds and source of wealth.

Related: UK: Gamesys to pay £1.2m for social responsibility and money laundering failures

While conducting an analysis of customer accounts held by the casino, the UKGC revealed undated entries made by the Money Laundering Reporting Officer (MLRO). The commission said of the breach:

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Retaining accurate records is a requirement of the anti-money laundering regulations.”

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Failed to identify vulnerable customers

Silverbond was also under fire for its failure to identify problem gambling behaviors. Incidents included a customer who threatened staff and damaged property, and another who tried to increase their maximum funds by cashing a cheque.

While the Park Lane Club was noted to have interacted with customers, its lack of documentation and identification of vulnerable gamblers has led to the £1.8m ($2.2m) fine due to social responsibility failings.

Combined with its lack of anti-money laundering compliance, incomplete records, and lack of direction in how policies should be implemented, the club also failed to carry out enhanced due diligence on 61 customers.

Moreover, two of the senior management and known license holders from the Park Lane Club have received formal warnings for failing to meet the standards for a Personal Management License.

The club was already in the news last year following a corruption probe. This led to the accounts and assets of Silverbond owner Vassilijs Melniks being taken over by the Ukranian authorities. Melniks was investigated for laundering €54m ($59m) as part of a deal with Ukrainian state-owned energy company Naftogaz.

The casino had been previously placed under review in February 2016 under section 116 of the Gambling Act, which looks at age-related activities.

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