Bicycle Casino in Southern California Raided by Federal Investigators

Posted on: April 4, 2017, 03:00h. 

Last updated on: April 4, 2017, 03:35h.

The Bicycle Casino is adding another scandalous chapter to its notorious story. The Southern California cardroom and hotel outside of Los Angeles in Bell Gardens was raided by federal officials on Tuesday morning, but law enforcement departments are staying quiet on the details of the operation.

Bicycle Casino federal investigation
Governor Jerry Brown (D), left, attended the ribbon cutting of the Bicycle Casino’s hotel expansion in 2015 alongside Bike Managing General Partner and CEO Hashem Minaiy. Two years later, the owners are now allegedly entangled in a federal financial investigation. (Image: Bicycle Club Hotel and Casino)

The raid is being carried out by the US Department of Homeland Security, and its Immigration and Customs Enforcement (ICE). According to local media reports, the US Attorney’s Office, IRS, California Bureau of Gambling Control, and the Financial Crimes Enforcement Network (FinCEN) are also involved.

ICE spokeswoman Virginia Kice said, “Because the warrant is under seal, we are not able to comment on the scope or nature of the investigation.”

However, Fox 11 in Los Angeles says the sting is in response to alleged money laundering allegations at the casino. All gambling has been shutdown as investigators sweep the Bike, as it’s affectionately known.

Since 1996, FinCEN has required casinos to file Currency Transaction Reports for any customer transacting $10,000 or more in a single day.

Dirty Money Crackdown

While the government isn’t saying the prime motive for their raid of the Bike, all signs point to allegations of not properly tracking and reporting money coming in and out of the casino. It’s not the first time a cardroom in the Golden State has been accused of such criminality.

FinCEN in recent years has placed a focus on making sure casinos adhere to the transaction reporting process as stringent as banking and financial institutions.

In January of this year, Los Angeles’ Hawaiian Gardens Casino, which is just a dozen miles from the Bike, was raided by federal authorities. FinCEN said Hawaiian Gardens failed to report large transactions and suspicious activity.

And last fall, the former owners of the Normandie Casino were ordered to pay $2.4 million for admittedly violating federal financial reporting laws. Owned by the Miller family since 1947, the Normandie was sold to Larry Flynt who has since renamed it the Lucky Lady.

While cardrooms in California continue to make money laundering headlines, the Financial Action Task Force recently reported that casinos “have not only increased their compliance . . . but have also put in place mitigating measures above the requirements of the Bank Secrecy Act.”

Bike’s Scandalous Past

The Bike offers a variety of games including poker and blackjack. Six years after its opening in 1984, the federal government took ownership of the casino after a jury found that $12 million of the property’s $22 million construction cost was funded through a drug network in Florida.

Original owner Sam Gilbert was accused of funneling drug money profits stemming from a marijuana smuggling enterprise in Florida to build the casino in California. In exchange for his criminal activity, Gilbert received 60 percent ownership of the Bike.

The US government sold its stake in the Bicycle Casino in 1996 for $25.3 million. The casino is now privately owned under the company name Bicycle Hotel & Casino LLC.