MGM MIRAGE officials have proved to be adept at explaining away a massive cash reporting foul-up at one of their prized megaresorts.
State Gaming Control Board Chairman Dennis Neilander said Tuesday that a six-week investigation of The Mirage has found what MGM MIRAGE officials were saying all along -- that the casino's failure to send nearly 15,000 cash-transaction reports (CTRs) to the U.S. Treasury Department was merely a giant administrative mistake.
CTRs, which document transactions above $10,000, are designed to help the government keep track of money laundering.
"It's still a serious problem," Neilander said. "It shows the system broke down at several points."
But Neilander said there was no sinister plot by Mirage officials to circumvent the money-laundering laws.
It turns out that a now-fired Mirage executive who had the task of making sure the CTRs were filled out correctly by casino employees simply had gotten behind in his audits and tried to cover up.
According to the company, the executive just froze.
Instead of mailing the reports to a special unit of the Treasury Department in Detroit, he let them pile up in boxes in his office.
Other employees noticed nothing unusual because the executive previously had been using his office to store copies of mailed CTRs in similar boxes.
In the end, The Mirage won't lose its license over this snafu, but it will have to pay a hefty fine. Technically, each of the estimated 15,000 cash-reporting violations can draw a $25,000 fine. No one, however, expects that to happen, though Neilander refuses to speculate on how large a fine he favors.
As the investigation draws to a close, both Neilander and MGM MIRAGE officials are anxious to strike a deal and put this mess behind them.
MGM MIRAGE officials saved themselves bigger headaches with regulators by launching damage control efforts in mid-February as soon as they heard what had happened at The Mirage.
They created a task force of 80 employees to pore over the unmailed reports and hand-deliver them to the Treasury Department. Company officials also tightened up The Mirage's internal reporting system and hired Frank Schreck, a politically connected attorney, to make their case to the Control Board.
Several days ago Schreck handed the board a report the size of a telephone book that details the company's version of why the 15,000 Mirage CTRs were never mailed to the Treasury Department.
"There was no spin," Schreck said. "Just full disclosure of what occurred."
The strategy seems to have impressed the Control Board.
"A lot of work went into The Mirage's report," board member Bobby Siller said. "They've taken significant steps to change their audit system to ensure that it doesn't happen again."
In other words, Schreck and MGM MIRAGE officials have done a pretty good job of explaining away their troubles.
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