Nevada regulators warn of multi-million-dollar nationwide casino scam

July 8, 2023 12:53 PM

Nevada regulators warn of multi-million-dollar nationwide casino scam

Photo: Shutterstock
  • Buck Wargo, CDC Gaming Reports
July 8, 2023 12:53 PM
  • Buck Wargo, CDC Gaming Reports

The Nevada Gaming Control Board Friday issued a warning to casinos of a still-evolving nationwide scam involving sophisticated “social-engineering tactics,” including the possible use of artificial intelligence. This marks the first public statement by state gaming regulators on the thefts, one of which netted $1.17 million from the Circa Hotel & Casino in Las Vegas.

The Board, without naming Circa or any of the Nevada casinos involved in the scam that have surfaced in news reports, urged casinos to take precautions by training the staff throughout the property’s operations as criminals shift their focus on the gaming floor.

In June in a report that gained international attention, a man claiming to be a Circa owner convinced a casino cage employee to distribute several payments that totaled $1.17 million to pay for fire-safety equipment. The case led to the arrest of Erik Gutierrez Martinez, 23, on theft charges.

The Las Vegas Review-Journal reported that Martinez is also charged in connection with an attempt to bilk the Eureka Casino Resort in Mesquite out of $250,000. KLAS-TV Channel 8 in Las Vegas has also reported that a theft at the Golden Nugget in Laughlin in which casino employees were duped into thinking they were transferring money from cages to a legitimate business; the scheme involved Mexican phone numbers.

CDC Gaming Reports reported on June 27 that Las Vegas Metro police circulated a memo to casinos warning of a scam that could affect casino cages in southern Nevada and that “millions” of dollars had been taken. The memo said the scam had been going on for five months, but there had been a recent surge in attempts via phone calls. Police didn’t provide any details of properties involved or amounts taken.

In its warning notice, the Gaming Control Board said the scam targeted casino cashiers.

“Criminal subjects use social engineering tactics to pose as casino executives,” the notice read. “The subjects direct cage employees to withdraw cash from the casino cage and take the funds offsite for emergency payments on behalf of the casino.”

The imposters often pose as high-level executives and contact a cage employee via a PBX call. The initial call is frequently followed up with a text message to the employee’s cell phone, purportedly sent by a second manager to confirm the fraudulent instructions.

“The cage scam is sophisticated and has been surprisingly effective in defrauding casinos,” the notice said. “Subjects gain intelligence on high-level casino owners, employees, managers, and others connected to the casino’s money operations. The fraudsters then contact cage employees using a variety of scenarios to manipulate personnel based on a fear of negative consequences for casino employees and/or operations.”

Whenever an employee hesitates or resists prompt action, subjects insist that the offsite payment is extremely urgent. Additionally, inferences are made that an employee bonus will be paid for the inconvenience of the unorthodox assignment, the notice said.

The NGCB said it “highly encourages” all casino licensees to review all casino and cage security protocols that authorize the removal of cage funds from the licensed premises.

“This particular scam continues to evolve and investigators have noted a shift in tactics to target gaming pits and other areas of the casino,” the notice said. “Therefore, education on the trending fraud is recommended for all cage cashiers, supervisors, managers, surveillance, security, and gaming-pit personnel.”

Licensees should be aware that advanced forms of technology, such as artificial intelligence, may increase the effectiveness of this type of fraudulent activity. “Consequently, heightened security protocols must be developed now to safeguard all employee information and casino assets,” according to the notice.

In March, $500,000 was reported stolen from the Monarch Casino in Black Hawk, the largest casino heist in Colorado history.

Willy Allison, founder of the World Game Protection Conference scheduled for February 27-29 in Las Vegas, said the industry has also faced similar attempts in the Pacific Northwest that were unsuccessful.

“I think it’s bigger in terms of organized crime,” Allison said of the scams. “What the casino industry needs to look at now is the safety of their staff. This is one of the reasons they put the memo out, to give them a heads-up.”

Allison said what stood out in the memo to him is the criminals are targeting specific employees. With social media, employees wear their lives on their sleeves, he said.
“You can target somebody,” Allison said. “This is an intimidation heist. They’re threatening violence against staff. That bothers me.”

Allison said casinos need to lock communication lines to staff and stop allowing them to use their cell phones at work.

“Awareness training should have been happening since Colorado three months ago,” Allison said. “That’s what this memo is saying. They’re putting it out and saying, ‘We expect you to get in there and train your people.’”