Canadian Firm Sues Wynn Resorts Over Alleged Due Diligence Failures

A Canadian company has filed a lawsuit against Wynn Resorts, accusing the Las Vegas-based casino operator of neglecting its due diligence responsibilities. The plaintiff, James Bay Resources, claims that the casino allowed a notorious fraudster to gamble millions of dollars that were allegedly stolen. The company is seeking damages and holding Wynn accountable for failing to investigate the source of the funds.

Background of the Case: Wynn Resorts and James Bay Resources

James Bay Resources, a Canadian natural resources company, is the plaintiff in the case. The company argues that Wynn Resorts enabled David Bunevacz, a known conman, to squander millions at its casinos. According to the lawsuit, Bunevacz induced James Bay Resources to invest approximately $4.6 million, which later turned out to be part of a fraudulent scheme. The plaintiff alleges that the casino did not perform the necessary checks and overlooked several red flags that should have raised concerns about the player’s background.

The lawsuit further mentions that James Bay Resources was not the only victim of Bunevacz’s deceitful activities. Over time, the man allegedly lured other investors into his fraudulent ventures, resulting in significant losses.

About Wynn Resorts

Wynn Resorts is a renowned luxury hotel and casino operator headquartered in Las Vegas, Nevada. With properties spanning multiple locations, including the iconic Wynn Las Vegas and Encore, the company is known for its high-end gaming, hospitality, and entertainment offerings. As a major player in the casino industry, Wynn Resorts is expected to uphold stringent standards of regulatory compliance and due diligence, ensuring that all its operations meet legal requirements. The company has faced scrutiny over the years, not only for its handling of funds but also for controversies involving its former leadership, which has led to legal settlements and heightened regulatory oversight.

The Notorious Conman: David Bunevacz’s History

David Bunevacz, a former decathlete who once set a record for javelin throw at UCLA and represented the Philippines in various sports events, eventually shifted his focus to less reputable activities. His transition from sports to fraudulent schemes led to his eventual downfall. In 2022, Bunevacz pleaded guilty to securities fraud and wire fraud charges and was sentenced to 17 years and six months in federal prison. The U.S. Department of Justice believes that Bunevacz defrauded investors out of more than $35 million over the years.

The Allegations Against Wynn Resorts

James Bay Resources is now arguing that Wynn Resorts’ failure to conduct proper background checks into Bunevacz is a violation of U.S. banking laws and local gaming regulations. The Canadian firm believes that if the casino had carried out a thorough investigation, it would have uncovered Bunevacz’s criminal past and questioned the legitimacy of his funds. This would have potentially prevented the stolen money from being used in high-stakes gambling at the casino.

According to further data presented in the lawsuit, approximately $8.1 million of the stolen money was spent at casinos. Additionally, Bunevacz used some of the funds to purchase a lavish house in Calabasas, California, and enjoyed extravagant trips to Las Vegas, acquiring luxurious items along the way.

Wynn’s Potential to Prevent the Fraud

The Canadian company asserts that had Wynn Resorts acted in compliance with U.S. regulations and vetted the high-roller’s background, it would have prevented Bunevacz from accessing its gaming floors. By identifying his criminal history and tracing his source of funds, the casino operator could have recognized that the millions wagered were ill-gotten.

James Bay Resources argues that this failure on Wynn’s part has led to substantial financial losses for the company. The plaintiff is convinced that the casino’s lax approach toward due diligence enabled the fraudulent activities to continue unchecked, ultimately affecting multiple investors.

Links to Wynn’s Recent Legal Troubles

The lawsuit against Wynn Resorts has sparked speculation about whether there is a connection between this case and the company’s recent legal issues. Just a few weeks ago, Wynn agreed to pay a $130 million settlement to the government. The settlement resolved a separate matter involving regulatory scrutiny and accusations of improper conduct.

Additionally, shortly before this, the casino giant reached a $70 million settlement to close a class-action lawsuit filed by its investors. The plaintiffs in that lawsuit alleged that Wynn Resorts, along with its executives, deliberately concealed allegations of sexual misconduct by the company’s former CEO, Steve Wynn. While these cases differ in nature, some observers believe that the multiple lawsuits highlight a pattern of potential regulatory lapses at the company.

Implications for Wynn Resorts

The current legal battle with James Bay Resources could serve as another hit to Wynn Resorts’ reputation. Being one of the prominent names in the casino industry, Wynn is often expected to maintain high standards of compliance and due diligence, especially when it comes to identifying the sources of funds for high-stakes players. The Canadian company’s lawsuit underscores the need for more stringent measures to prevent similar occurrences in the future.

As the lawsuit progresses, it will be up to the court to decide whether Wynn’s alleged failure to scrutinize Bunevacz’s background constitutes a breach of its responsibilities. The outcome of the case could potentially impact how casinos approach due diligence practices in the future, especially concerning the gaming industry’s compliance with banking laws and regulations.

Regulations Around Money Laundering

Regulatory frameworks for casinos are designed to prevent money laundering and ensure that funds used for gambling are legitimate. In the United States, gaming operators are subject to strict guidelines under the Bank Secrecy Act (BSA), which mandates that casinos implement anti-money laundering (AML) programs. These programs include verifying the identity of high-roller patrons, monitoring transactions, and filing suspicious activity reports (SARs) when they identify unusual or potentially illicit activities. Casinos are required to maintain detailed records of high-value transactions and investigate the sources of large sums of money to prevent the facility from being used to launder proceeds from criminal activities.

Moreover, casino regulations extend beyond the federal level to include local and state requirements, which vary depending on the jurisdiction. For instance, in Nevada, casinos must adhere to the state’s specific AML requirements, which include additional scrutiny of high-stakes gamblers. Failure to comply with these regulations can lead to severe penalties, hefty fines, and damage to a casino’s reputation. As a result, major operators like Wynn Resorts are expected to have robust due diligence protocols in place to detect any suspicious transactions, review the backgrounds of their high-rolling customers, and ensure that funds used in their establishments are free from any illicit origins.

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