The Trump Taj Mahal was controlled by Donald Trump until February 2009, when shareholders took control amidst another bankruptcy.
Congressional committees recently called for the Treasury Department’s financial crimes unit, FinCen, to release to them documents they have on Donald Trump’s ties to Russia or Russians.
While the FinCEN probe did not turn up a smoking gun of money laundering for Russian interests, the documents so far released to the public suggest the Trump Organization’s anti-money laundering measures were not up to federal standards at a time when Russian mobsters considered the Trump Taj Mahal their favorite casino.
According to CNN, the cache submitted to Congress include 417 pages of documents that CNN got access to, due to Freedom of Information requests. Those records show a $477,000 fine issued against the Trump Taj Mahal in 1998, due to 106 violations of the Bank Secrecy Act. At the time of the fine, the $477k paid was the largest fine the federal government ever issued to a casino for violating the Bank Secrecy Act.
The Bank Secrecy Act
The Bank Secrecy Act requires a casino to report cashouts of $10,000 or more within 15 days of the withdrawal. The casino must issue the gambler’s name, Social Security number, and other financial information. The violations occurred between the opening of the Trump Taj Mahal in April 1990 and the discovery of the violations in December 1991.
Those details were reported at the time of the fine in 1998. CNN noted that the Trump Taj Mahal paid the fine without admitting guilt in the case. The records only show that the Trump Taj Mahal “failed to file” within the federally-allotted time. That would be anywhere from 16 days to 19 months, depending on the time frame of the case.
Issues Ended in December 1991
In December 1991, the Trump Taj Mahal emerged from bankruptcy. At the time, Donald Trump sold 50% stake in the Atlantic City casino to bondholders. From that time onward, the Trump Taj Mahal had to open its books to the bondholders and the problems with the Bank Secrecy Act stopped.
When Donald Trump launched the Trump Taj Mahal, he did so with a tremendous amount of debt. Though it was the flashiest casino in the world at the time, it always struggled financially. Because of its trendiness and glitz, the Trump Taj Mahal became a favorite gaming destination for Russian mobsters living in Brooklyn at the time.
Money Laundering by Russian Mobsters?
Due to the casino’s financial struggles, its 106 documented casinos of Bank Secrecy Act violations, and its reported popularity with Russian mobsters, federal officials might suspect that the casino’s 106 violations included cases where money was laundered for the Russian mob. Congressional hearings could focus on the CNN disclosures, as a way of intimating Donald Trump’s longstanding ostensible close ties to wealthy Russians.
The casino not only failed to report payments of more than $10,000, but also appeared to allow people to make multiple cashouts under $10,000 in order to skirt federal laws. The problem with the CNN reporting in the case is that the names of those who made illegal withdrawals are unknown. Thus, CNN can speculate that Russian mobsters were among those who violated the Bank Secrecy Act, but that is mere speculation.
Problems with Trump Castle and Trump Plaza
Trump Castle also had issues at the time. On December 18, 1990, a representative of Fred Trump entered Trump Castle with a certified check for $3.35 million. He deposited the check, collected $3.35 million in casino chips, and walked out of the casino. This was considered a loan by the federal authorities, designed to pay the interest on an $18 million loan. Creditors are expected to be revealed to the public, so Trump Castle received a $30,000 fine for its indiscretion.
Trump Plaza, the third property owned by the current US president in Atlantic City, is thought to have had fewer legal issues than the other two Trump properties. Subsequent audits in 1998 and 1999 found that the Trump properties filed correct information 99.99% of the time, though Trump Taj Mahal was fined twice in the 21st century (one of those times outside the Donald Trump era).
May 22, 2017 Trump Organization Press Release
The Trump Organization released a statement on the FinCEN news. The statement read the Trump Organization “has had no involvement with the Taj Mahal, or any other Atlantic City property, for over a decade and has no knowledge of the events referred to in your email.”
Such a statement is what gives anti-Trump voters and media commentators fits. While the statement is factually correct in stating the Trump Organization has not had a direct role in running the Trump Taj Mahal in years. Donald Trump established Trump Casino & Resorts in 1995 to manage his casinos, as a subsidiary of the Trump Organization. He was forced out of control of Trump Casino & Resorts in February 2009 amidst a bankruptcy filing, and did not have an active role in the casino’s management at least since 2011. He licensed the Trump name for 10% interest in the company.
What the statement fails to note is the Donald Trump owned the Trump Organization and Trump Taj Mahal throughout 1990-1991, and therefore has direct knowledge and responsibility for the money laundering case. While his sons would not have been active in the running of the corporation at the time, critics would argue their press release is misleading.
The Mueller Investigation
The Trump Taj Mahal case from 1998 is an example of why Donald Trump might rue the coming Mueller investigation. While it is hard to believe a man who is the walking epitome of American capitalism would be conspiring with the Russian Federation, FBI and FinCEN investigations do not work that way. As one former FBI employee noted the other day, the FBI does not ignore crimes they uncover while looking for other crimes.
Thus, like the Whitewater investigation of Bill and Hillary Clinton, the Mueller investigation might not find evidence of collusion with the Russians, but might turn up all sorts of other issues. The first avenue of investigation would be to follow any money trails between Russian banks or Russian oligarchs and the Trump Organization. That would overturn a world of information on Donald Trump’s finances, which could be used against him.
