A Cantor Fitzgerald offshoot, CG Technology, previously operating as Cantor Gaming, will relinquish a substantial $22.5 million to resolve an inquiry into questionable practices. Allegedly, they became ensnared in allegations of illicit wagering and money cleansing. Apparently, this financial powerhouse, renowned for its Wall Street acumen, ventured into the realm of betting over the last ten years.
Their fortunes soured roughly three years ago when a high-ranking executive was apprehended and confessed to overseeing an unlawful gambling enterprise. Federal authorities, spearheaded by the US Attorney’s Office, imposed a $16.5 million penalty on CG Technology alongside a deferred prosecution agreement – essentially a warning contingent on future compliance.
However, the plot thickens! FinCEN, the financial regulators within the US Treasury Department, weren’t inclined to be lenient. They levied an additional $12 million fine on CG Technology, although they did stipulate that $6 million of that sum would be factored into the criminal settlement.
Meanwhile, Cantor Fitzgerald has sought to disassociate itself from this entire debacle since 2014, asserting that they severed connections and possess no stake in the subsidiary. Ironically, that same subsidiary ascended to prominence within the US sports wagering arena.
The lesson, as articulated by Brooklyn US Attorney Robert Capers, is that CG Technology’s triumphs came at the expense of ethical conduct. They effectively transformed into a conduit for sanitizing illicit funds originating from at least two major unlawful gambling syndicates. And let’s not overlook that CG Technology held sway over sports betting operations at seven prominent Las Vegas casinos, encompassing renowned establishments like The Cosmopolitan, Hard Rock Hotel & Casino, and The Venetian.
National legal representatives claimed the firm not only welcomed high-stakes gamblers, granting them access to Michael Colbert, a risk assessment director responsible for establishing probabilities and wagering parameters, but also unlawfully catered to them with elevated wagering ceilings.
Colbert purposefully handled substantial monetary exchanges despite their dubious sources. The former Cantor Gaming leader and his staff also enabled external financial transfers, permitting representatives or intermediaries to place wagers, a significant violation under Nevada regulations.
CG Technology confessed to breaching federal statutes, affirming their collaboration with law enforcement and implementation of measures to rectify their actions and guarantee adherence.
Colbert entered a guilty plea in August 2013 for conspiring to manage an illicit gambling enterprise and could receive a maximum of five years imprisonment upon sentencing.
In 2014, Cantor Gaming consented to a $5.5 million payment to resolve accusations from the Nevada Gaming Control Board concerning the matter.
Chief Executive Officer Lee Amaitis stepped down in August following CG Technology’s agreement to pay $1.5 million to settle a distinct claim with Nevada authorities regarding a software malfunction that led to excessive charges for patrons.