Word broke early Tuesday that federal agents in the expanding investigation surrounding the network of illegal bookmaker Wayne Nix were in Las Vegas asking questions, according to a reliable source with knowledge of the inquiry.
News of the presence of IRS Criminal Investigation and Homeland Security Investigations agents first surfaced on social media from The Nevada Current, one of the media outlets following the story.
In Las Vegas, the Nix investigation has already knocked former MGM Grand and Resorts World Las Vegas president Scott Sibella out of the gaming business. Sibella pleaded guilty to a violation of the Bank Secrecy Act (BSA) by failing to file a Suspicious Activity Report on Nix, whom he knew as a high-rolling illegal bookmaker with a client list that included professional athletes and wealthy business owners. Sibella faces a May 8 sentencing in Los Angeles, where the Nix investigation began.
At least two casino hosts also knew the source of Nix’s money and failed to follow the BSA’s “know your customer” (KYC) rule. It remains unclear whether they will be charged in connection with the investigation.
After news of the investigation broke, MGM cut ties with several customers who were known illegal bookmakers, according to a source with knowledge of the investigation. One was poker player Damien LeForbes. Another was a resident high-roller known as “Big Al,” according to sources. Reputed illegal bookmaker Matt Bowyer’s name has also continued to surface in the investigation.
Nix, a former minor-league pitcher who used his sports contacts to recruit customers for the Costa Rica-based Sand Island Sports betting operation, pleaded guilty in April 2022 and has been cooperating with authorities for months. His March sentencing was delayed, another sign the case is gaining steam. Other gamblers and casino employees questioned by agents are said to be weighing their options.
In January, MGM and the Cosmopolitan of Las Vegas agreed to pay a total of $7.45 million in connection with the BSA violations and a lack of regulatory compliance.
“Financial institutions have a duty under the law to report criminal or suspicious activity occurring at the institution though SARs,” First Assistant United States Attorney Joseph McNally said at the time. “Our office will aggressively prosecute corporate executives and employees who turn a blind eye to criminal actors depositing illegal funds at casinos and financial institutions.”
Homeland Security Investigations Los Angeles Assistant Special Agent in Charge Jennifer Reyes said in a statement, “Turning a blind eye to laundering of illicit funds and knowingly avoiding reporting requirements put public safety at risk. The El Camino Real Financial Crimes Task Force is uniquely prepared to investigate, disrupt, and prosecute the bad actors, holding them accountable for their actions.”
At a time legalized sports betting has become the hottest story in the gaming industry, the federal investigation has revealed a coziness between some casino operators and members of the illegal bookmaking fraternity. Although such relationships aren’t news in Las Vegas, they put policing the legal industry in an awkward position with the continued possibility of authorities going after casino executives and employees in key marketing and accounting positions.
In their non-prosecution agreements with the U.S. Attorney’s Office, MGM Grand and Cosmo agreed to follow additional BSA review and reporting requirements, spend at least $750,000 over two years on external compliance reviews with reporting to the U.S. Attorney’s Office, update internal audit protocols, and review a list of prior SARs, customer files, and transactions.
The latter requirement might have some casino executives and employees losing sleep these days.
