San Bruno's Artichoke Joe’s pays record settlement

The financial penalties paid to the state department compound another $5 million settlement paid to the federal Financial Crimes Enforcement Network, and the casino admitted to violating money-laundering regulations over a period spanning from 2009 through 2017.

The card room generating the eighth-most gambling revenue in the state lagged in reporting its finances to the federal organization, prompting a process seeking to revoke its license, according to the press release.

The state agency claimed the casino violated regulations when it failed to adequately disclose that it was under investigation by the federal government and potentially negotiating a settlement which could include admissions of violations.

“Both the failures to disclose and the admitted violations of the Bank Secrecy Act breached the casino’s duties and responsibilities under the Gambling Control Act,” according to the press release.

The settlement requires the casino to pay the agreed to amount, reimburse the state for costs associated with the investigation and complete a three-year compliance period that will determine the fate of its license, according to the report.

Artichoke Joe’s President Vincent DeFriese said the settlement is a signal of the casino’s commitment to adhering to the gambling industry’s intricate landscape of financial regulations.

"Artichoke Joe's has worked hard for the last few years to put in place Bank Secrecy Act controls that meet rigorous and very complex federal standards, and this settlement was an acknowledgement that our efforts have been successful,” he said in an email.

The agreement continues a checkered legacy for the casino founded in 1916, which remains one of San Bruno’s largest employers.

Federal officials raided the casino in 2011 as part of a large-scale investigation into organized crime in which 14 people were arrested. Federal officials claimed suspects made nearly 400 deposits totaling nearly $3 million into personal accounts between 2006 and 2010 at the San Bruno casino and another card room in Emeryville, while engaging in racketeering, loan sharking and drug sales, among other charges.

Prosecutors acknowledged the crime ring acted independently from casino ownership in San Bruno but many of the defendants offered casino chips as loans, according to an indictment. Following the raids, former owner Dennis Sammut condemned the alleged criminals and committed to installing more stringent security policies.

For the part of the state Department of Justice, a representative lauded the settlement as an example of successful casino regulation while crediting the collaboration between government agencies.

“DOJ believes the substantial monetary penalty in this settlement will serve as a deterrent to other card rooms throughout the state to avoid engaging in similar behavior and reaffirms our commitment to work collaboratively with our federal partners to assure compliance with the Bank Secrecy Act," according to the statement.

austin@smdailyjournal.com