Wynn or Lose

A Cartel and Chinese Money Laundering Casino Case Study

📅 February 11, 2026

Casinos have long been associated with money laundering and organized crime, right back to the expansion of Las Vegas under the influence of “the mob.” While gaming operators have significantly enhanced their counter-illicit finance programs, vigilance is still required.

“Casinos and related businesses have proven both capable and efficient in moving and laundering massive volumes of state-backed fiat as well as cryptocurrencies undetected; creating channels for effectively integrating billions in criminal proceeds into the formal financial system.” – United Nations Office on Drugs and Crime report (2024)

“…casinos accepted hundreds of millions of dollars in cash that was the proceeds of crime. These transactions were an integral part of a money laundering typology known as the ‘Vancouver model’ – in which wealthy casino patrons were provided vast sums of illicit cash by ‘cash facilitators’ who were affiliated with criminal organizations… In 2014 alone, British Columbia casinos accepted nearly $1.2 billion in cash transactions of $10,000 or more… the cash used in many of these transactions exhibited well-known characteristics of cash derived from crime…” – Cullen Commission (2022)

Recent regulatory actions and law enforcement actions indicate that laundering through casinos is evolving, rather than contained. U.S. law enforcement has identified that hundreds of millions of dollars are laundered yearly through casinos in the United States. In September 2024, Wynn Las Vegas – the largest casino in Las Vegas – agreed to forfeiture of $130 million for “conspiring with unlicensed money transmitting businesses” that were laundering money through the casino.

Gambling businesses in other jurisdictions, such as Mexico, are also used for laundering the proceeds of cartels and organized criminal groups.

The Government of Mexico blocked transactions of 13 casinos on 11 November 2025 following investigations that identified indicators of money laundering. The gambling establishments – which were located in Jalisco, Nuevo León, Sinaloa, Sonora, Baja California, State of Mexico, Chiapas and Mexico City – operated multi-million-dollar cash transactions and transfers to countries including the United States. The Mexican Financial Intelligence Unit, in coordination with OFAC, blocked a further seven individuals and 24 entities on 13 November 2025.
In a joint action by OFAC, FinCEN, and the Government of Mexico on 12 November 2025, restrictions were imposed on multiple gaming establishments associated with laundering money for the benefit of the Sinaloa cartel. FinCEN issued a notice of proposed rulemaking that transactions involving 10 Mexico-based casinos were a class of “transactions of primary money laundering concern” under Section 311 of the USA PATRIOT Act.
In parallel, OFAC designated 27 individuals and entities, associated with the Hysa Organized Crime Group, which was assessed to use businesses including gaming establishments as fronts to launder narcotics proceeds “with the consent of the Sinaloa Cartel.”

While casinos have long been a target for illicit actors, these risks are now amplified through the involvement of professional and efficient Chinese Money Laundering Networks (CMLNs), who match demand from Chinese nationals for capital outside China with the supply of illicit cash in the United States.

This article analyzes the Wynn Las Vegas forfeiture investigation in detail, identifying the methodologies used and lessons that can be applied by casino operators to identify and respond to similar risks.

China and capital flight: drivers of cartel laundering

Chinese Money Laundering Networks (CMLNs) service a growing demand from Chinese nationals to access currency outside China, which is otherwise restricted by a $50,000 limit imposed by the Chinese government on movement of capital. The drivers for capital flight include restrictions on private enterprise, political uncertainty and concerns over military build-up with the potential for conflict in the future, investment, and the need to fund tuition and living expenses of relatives living outside China. The result is billions of dollars circumventing capital controls: capital flight from China was estimated at $516 billion in 2024.

The appetite for USD cash is also to fund gambling: the Cullen Commission investigation into laundering in Canadian casinos identified bets of up to CA$100,000 per hand of baccarat – high value play that cannot be funded within China’s capital restrictions.

CMLNs meet this immense demand by identifying suppliers of currency in the United States, Europe, the United Kingdom, and other countries. In the United States, the high volumes of cash generated by narcotics trafficking and other cartel activities provides a key supply of USD.

Cartels need to dispose of dollars and Chinese nationals want to acquire them.

The result of this supply-and-demand is a close association between CMLNs and cartels, with CMLNs providing extensive, adaptive, and efficient professional money laundering services. In the United States, financial institutions reported $312 billion in suspicious transactions associated with Chinese Money Laundering Networks between 2020-2024.

The Tip that Triggered the Wynn Investigation

In 2018, staff at a casino – referenced only by Internal Revenue Service (IRS) investigators as “not Wynn” – identified unusual activity. A casino host, a casino employee responsible for high rollers, was arranging meetings between Chinese gamblers and a third party. The third party would arrive at the casino with a satchel, then would enter a hotel room along with the casino host and the gambler. Shortly afterwards, with minimal or no play, the third party would leave. Staff noticed a similar pattern with several other men. While they weren’t exactly sure what was occurring, it was sufficiently unusual that casino staff tipped off the IRS. The third parties were subsequently identified as Bing Han, Fan Wang, Lei Zhang, and Liang Zhou, all Chinese nationals in their 30s or 40s who lived in Las Vegas.

Laundering Method 1: Casino Mirror Transfers, Chinese Money Processors, and Complicit Employees

The tip prompted an investigation into casinos, resulting in Wynn Las Vegas’ $130 million forfeiture for “conspiring with unlicensed money transmitting businesses.” Other defendants in the same investigation – including Han, Wang, Zhang ,and Zhou – were subject to forfeitures of up to $500,000 each, imprisonment, and/or other penalties.

Laundering through casinos like the Wynn used this methodology:

“Money processors” like Han, Wang, Zhang ,and Zhou received USD cash from customers in Las Vegas and other locations in the United States. This included the proceeds of human smuggling, drug trafficking, and other crimes. The money processors’ phone records linked them with cartel operatives, according to law enforcement officials interviewed by CNN.

At the Wynn, Chinese gamblers sought funding for their gambling, above the capital restrictions imposed by the Chinese government. Casino hosts at the Wynn contacted the money processors by phone, according to Chris Urben, a former DEA Special Agent.

The casino host arranged a meeting between the money processor and the gambler in a hotel room, or even hotel bathroom or vehicle. The money processor agreed to sell the USD cash to the gambler. Using a banking app, the gambler transferred the equivalent value in yuan from the gambler’s Chinese bank account to a Chinese bank account nominated by the money processor. The money processor then handed over the cash to the gambler, minus commission. Often, the casino host also received a cut from the commission.

The money processor departed the casino, and the gambler and casino host returned to the gaming floor to convert the cash into chips to continue play. In other situations,* the funds facilitated by the Wynn casino hosts and money processors were used at other casinos.

The money processors were all convicted for operating an “unlicensed money transmitting business” that transferred money, funds, and “other value,” between the United States and China. In addition to the mirror transfers above, the money processors also offered reverse transactions. For example, Han received USD from a customer in the United States, then transferred the equivalent value in yuan from his bank account in China to the customer’s Chinese bank account.

These activities are referred to as a “mirror transfer” because they involve two equivalent transactions without any apparent financial link. The USD stay in the United States. The RMB stay in China. The only connection is the meeting in the casino. Variations of this methodology are used extensively by CMLNs laundering cartel cash through the financial system, while avoiding cross-border wire transfers that attract attention from investigators.

Laundering Method 2: Intermediaries, Shell Companies, and Nominees

The second method used to launder funds at the Wynn was operated by independent third-party agents. These agents were contracted by Wynn to recruit foreign gamblers. They also acted* as unlicensed money transmitting businesses, moving client funds through companies, bank accounts, and third-party nominees in Latin America. The funds were deposited into the Wynn cage account (meaning the casino’s “in-house bank”), and casino staff traced the funds to their source so that they could credit the Wynn accounts of each individual patron.

One agent, Juan Carlos Palermo, conducted more than 200 transfers totaling more than $17.7 million on behalf of more than 50 patrons, including those in Mexico and Latin America.* This enabled the patrons to transfer funds, exchange currency, and transmit/remit money without complying with financial system laws and regulations.

In another example,* a patron indicated to a Wynn employee identified as “H.S.” that he wanted to obscure the origin and source of funds. H.S. provided the contact details of an independent agent who used third-party nominees to anonymously transmit funds in exchange for a 6% commission. The first attempt to deposit funds on behalf of the patron was rejected by Wynn because the transfer was from a “furniture company” that had wired money for the credit of 35 other Wynn patrons. A second attempt, using a different entity, was successful.

Laundering Method 3: “Human Head” Proxies

Proxy gambling occurred at the Wynn* despite staff being aware of the true nature of the gambling relationship. Proxy gambling, also referred to as “human hat,” “human head,” or in Mandarin as “ren tou,” describes a situation where a person serves as a proxy for another casino patron. The patron directs the proxy to purchase chips and/or place bets on their behalf, sometimes standing behind the proxy while they play and giving instructions. Human head gambling enables patrons who are unable or unwilling to conduct financial transactions under their own identity, for example due to BSA or AML laws, to move funds through the casino.

Inadequate Suspicious Activity Reporting

In addition to laundering via the methods described above, other activity occurred at the Wynn that should have prompted a Suspicious Activity Report (SAR). These activities included:*

The Wynn undertook $1.4 million in transactions for an individual who had previously been publicly linked with “proxy gambling” and who had been denied entry to the United States – in the presence of the Wynn President of Marketing – due to suspected associations with organized crime.
The Wynn did not report transactions for an individual who, according to public information, had spent six years in prison in China for conducting unauthorized international money transactions and violations of other financial laws.
The Wynn permitted international transfers of millions of dollars by an individual identified in U.S. media as having been involved in human head proxy gambling.

Consequences for the Wynn

The Wynn was subject to forfeiture of $130,131,645. It also incurred financial and resource costs to remediate its compliance program including the following required actions:

Augment its compliance structure and personnel
Enhance its training and technology
Complete an external compliance review and remediate any material deficiencies

The casino staff implicated in the investigation had already had their employment terminated.

Casino operators can apply the findings from the Wynn forfeiture as an input to their organizational risk assessment, to understand and respond to the way these methodologies may apply in their casino.

For a comprehensive analysis of red flags applicable to commercial gaming and the compliance programs required, refer to the Institute for Financial Integrity’s report High Stakes – Casinos, Crime, and Cartels.

* Source: Non-Prosecution Agreement with Wynn Las Vegas, LLC, dated September 6, 2024, obtained from the U.S. Attorney’s Office Southern District of California by the Institute for Financial Integrity

Author

Catherine M. Woods is an Associate Managing Director at the Institute for Financial Integrity where she leads initiatives on countering cartels and Chinese Money Laundering Networks, illicit procurement networks and export controls, and emerging technologies including digital assets. For more information, please contact cwoods@finintegrity.org.

New Report: Cartels & Criminality

Cartels and their criminal financing continue to evolve, using professional networks to launder the proceeds from narcotics trafficking, human trafficking, environmental crime, fuel theft and oil smuggling, corruption at ports and “taxation” of local economies.

Download our latest report for an assessment of money laundering methodologies and red flags – and the actionable steps financial institutions can take.

View the Report

Recommended Blogs

Electronic Fund Transfer Consumer Protection

February 5, 2026

The Electronic Fund Transfer Act (EFTA) was established to protect consumers using electronic fund transfers. Explore what is considered in scope and the changes proposed to include crypto.

Following the Illicit Funds

January 28, 2026

As crypto grows, so does regulatory oversight. From SARs and CTRs to MSB registration and potential FBAR requirements, crypto businesses are now firmly within the scope of financial regulations.

Blind Spots in the System

January 21, 2026

When transaction monitoring fails, the cost goes far beyond fines. This article explores why many programs still miss critical red flags and how effective training helps teams to strengthen detection, calibration, and oversight where it matters most.

Top 10: Cartel Finance & Chinese Money Laundering Networks

January 15, 2026

The Institute for Financial Integrity has identified the “Top 10” list of actionable resources for financial institutions to use to detect and respond to cartel finance and CMLNs. These can inform policies, processes, systems, controls, and training programs.

Synthetic Identities

January 8, 2026

Fraud generates billions in proceeds every year, and the use of AI significantly increases the speed, scale, and likelihood of success. Synthetic identities are already leveraged to open accounts used to commit fraud and launder money. Explore red flags and actions financial institutions must take to detect and respond to AI-enabled synthetic identities.

AML/CFT and Sanctions Enforcement Actions in 2025

December 9, 2025

2025 will go down as a historic year for AML/CFT and sanctions-related enforcement actions in two ways. It’s the first time in over 20 years that no banks have faced major penalties, and state regulators began jointly penalizing institutions.

Debt & Duty

December 4, 2025

Chinese Money Laundering Networks target students to operate as money mules to launder cartel proceeds. Learn more about the methods used for recruitment and control, and the red flags that financial institutions can use to identify and respond.

When Holiday Cheer Meets Fraud Pressure

November 26, 2025

This article breaks down the key scam patterns emerging this season, why December has become a true test of institutional readiness, and the steps teams can take to reduce losses and respond with confidence.

Where Boards and Senior Management Fall Short on Compliance Oversight

November 18, 2025

From passive oversight and overreliance on compliance officers to blind spots in risk awareness and a check-the-box only training culture, senior management often stumbles in ways that invite regulatory scrutiny. This article explores the most common pitfalls and how leaders can avoid them to strengthen accountability at the top.