Federal and Local Authorities Raid the Bicycle Club Casino on Money Laundering Suspicions

Federal authorities raided the Bicycle Hotel and Casino in Los Angeles County on Tuesday. Authorities seized thousands of financial records in the raid, seeking evidence of money laundering in an ongoing investigation.

Becky Warren, a spokeswoman for the Bicycle Club, said that the business was “cooperating with authorities”. Government agents told the Los Angeles Times that the card club would not be closed long. Two hours after the raid was performed at 7:30 am on Tuesday morning, an armored truck was backing up to the poker room’s doors to collect evidence.

Tuesday Morning Raid

The raid was performed at 888 Bicycle Casino Drive in the Los Angeles suburb of Bell Gardens. The Bicycle Club is one of several private poker rooms in the Los Angeles area. Along with Commerce, Compton, Gardena, Hawaiian Gardens, and Inglewood, Bell Gardens is one of six cities in the area which allows casino gambling. Under state laws, only certain forms of gambling are legal in Bell Gardens — non-banked games like poker.

A task force including local, state, and federal law enforcement agencies helped conduct the raid. Those groups included the Los Angeles High Intensity Financial Crime Area Task Force, the California Department of Justice, the California Bureau of Gambling Control, the U.S. attorney’s office, IRS Criminal Investigation, and the U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations.

Virginia Kice on Magistrate Judge’s Order

Virginia Kice, a spokeswoman for ICE, said that a “search warrant issued by a United States magistrate judge was filed under seal in relation to an ongoing investigation.”

Mrs. Kice declined to give “the scope or nature of the investigation“.

The Los Angeles Times reported that those familiar with the case, but who did not have authorization to speak publicly on details, said investigators wanted to learn if individuals at the Bicycle Club had used the gambling activities to launder “illegally gained cash”.

LA Times Reports Money Laundering Allegations

The anonymous sources said that the investigation is in its early stages. The question is whether people exchanged dirty money for chips at the poker tables, then cashed out their chips for clean money later on. Gambling operations traditionally have been favorite options for laundering money, because of the high turnover of cash. Numerous federal anti-money laundering laws have been enacted to stop such activity, while the IRS and FinCen regulate those laws.

ICE investigates cases in which bulk smuggling is believed to have happened. The USA Patriot Act made it illegal to transport $10,000 worth of currency into or out of the United States while knowingly evading reporting requirements.

Nate Davalle on Club’s Reopening

Nate Davalle, the California Department of Justice’s assistant bureau chief, said the Bicycle Club will remain closed until the investigators collect all the documents they need. Mr. Davalle said club should re-open late-Tuesday or Wednesday.

Players who had live chips will be able to cash them out when the card club reopens, said Mr. Davalle. When the raid happened at 7:30 am on Tuesday, active players were told to leave their chips on the table.

One Poker Player’s Allegations

Kenneth Taylor, a 53-year old local resident who said he plays “and loses” almost every day at the Bicycle Club, said he long believed that the Bicycle Club might become the source of an investigation.

Mr. Taylor said to the L.A. Times, “Let’s put it like this. Gambling is a game of luck. I consider myself a lucky person, But you can never win at the Bicycle.”

Near the entrance of the card club, a nervous man approached an ICE agent and asked if or when he would be able to cash out the chips. The man identified himself as a casino employee and was concerned that the chips no longer had any value.

The ICE agent assured the man that the agents were not taking over the operation, and told him he could cash out when the club opened again. The hotel associated with the Bicycle Club, which is located adjacent to the card room, never closed for business.

Bicycle Hotel and Casino

The Bicycle Hotel and Casino was opened in 1984 by George Handie Sr. and it’s had a colorful history since. Financing for the club and hotel was provided by LA construction businessman, Sam Gilbert, who may have used laundered money in building the operation.

The federal government seized the card room in April 1990 and eventually proved that $12 million of the $22 million used to build the club had been provided by Florida drug smugglers. U.S. Marshals held on to the cash until a judge exonerated George Hardie and The Park Place Associates, who received back their 35% stake in the Bicycle Club.

U.S. Government: 1990s Bicycle Club Owner

From 1991 to 1996, the U.S. government retained control over half of the other 65% interest in the Bicycle Club, because one of its stakeholders had known about the funding. The US government had made tens of millions of dollars in the poker business before selling its stake in 1996, but not before it used some of those funds to defeat an initiative to build a rival poker club in Orange County, California.

Live at the Bike was the first live broadcasts of club poker in the United States. The sessions were broadcast five nights a week by Barry Greenstein and Kenna James. In 2006, the broadcasts became subscription-only, but were canceled in March 2007. In January 2011, Live at the Bike restarted broadcasts on the PokerNetcast.com.

These days, the room offers a variety of card games, including poker variants like Texas Hold ‘Em, Seven Card Stud, Omaha hold ’em, and Mexican Poker (5-Card Stud). A few table games like Blackjack, Baccarat, Pai Gow Poker, and Three Card Poker are played at the Bicycle Club, too.