#5 The Laundromat: How Trump’s Taj Mahal Kept Breaking the Money Laundering Rules

Trump might have failed at the casino business, but he was actually very successful at what he was really trying to do.

You think you know how this goes. Rich guy builds fancy casino, loses money, declares bankruptcy, gets bailed out. The end. But that’s the story he tells, and it’s not the actual story. The actual story is that his Atlantic City casinos were designed from the jump to do one very specific thing: convert dirty money into clean money. And he was weirdly, almost impossibly good at it.

The Taj Mahal opened in April 1990.[2] In its first 20 months of operation, FinCEN and the IRS found that it had broken anti-money-laundering laws 106 times.[2]

Which is a lot - but what’s even crazier is that this all happened in less than two years. In a casino that was supposed to have anti-money laundering programs in place by federal law.

Here’s the grift…

Let’s say you’re someone with money you got from doing things that are illegal. You know, like drug dealing, extortion, sex trafficking, the usual suspects. Well, obviously, you can’t just put the money in a bank. Deposits over ten grand get reported. Wire transfers get flagged. You need a way to turn twenty million in cash into something that looks legitimate; you can’t buy a legit sex lair penthouse with a suitcase full of cash. Unless it was in Trump Tower, apparently, but I digress…

Anyway, here’s how you’d launder it through a casino, in eight steps.

First, you walk in with your dirty cash. Second, you buy thousands of dollars’ worth of chips without proper paperwork. It’s a casino, it’s cash-heavy, nobody’s asking weird questions. Third, you don’t actually gamble. Or you gamble five hundred bucks and lose it on purpose just so you don’t seem sus. Fourth, you go to the cashier and cash out the remaining chips. The casino gives you a check. Fifth, the casino reports that check as legitimate casino winnings. Sixth, if the casino doesn’t file the reports it’s supposed to, that money never gets flagged. Seventh, it goes into the bank and gets wire transferred. Eighth, shell companies somewhere receive it as clean money from legitimate business operations.

The Taj Mahal’s part in the whole thing, according to its 2015 settlement, was that between 2010 and 2012 they didn’t keep track of the people who deliberately cashed out in smaller amounts to stay under the ten-thousand-dollar reporting threshold.[2] They’d been warned. They didn’t stop it. They just didn’t document it.

In 1998, FinCEN fined the Taj Mahal $477,700 for currency transaction reporting violations.[1] This was for violations that happened between April 1990 and December 1991. That fine was for not filing its cash transaction reports on time.[2] Bad record-keeping and an anti-money laundering program that didn’t work came up later, in the 2015 case.[1]

Here’s the fun part of the story. Trump still controlled the Taj Mahal in 1998, through his public company, Trump Hotels and Casino Resorts.[6] The 1991 bankruptcy had cost him half his stake, which went to the bondholders for lower interest rates - but the debt didn’t go away. So it was his company that got caught and fined. Trump collected the money while the place was operating, and the investors ate the losses. Classic Trump!

But the scam was already baked deeply into the business by the time Trump got out of it in 2009, apparently. Because by 2015, FinCEN came back harder.[1] Ten million dollars. The Taj Mahal admitted to willfully violating anti-money laundering laws. Willfully. That’s the word that matters. Not accidentally. Not due to negligence. Willfully - which in these civil cases means reckless disregard or looking the other way.

The statement from FinCEN at the time said the casino “has a duty to help protect our financial system”[1] and it repeatedly failed to do that duty. Between 2003 and 2012, the casino continued breaking the same laws it had broken in 1991. For a decade. With full knowledge that they’d already been caught and fined.

Looking back now, it seems obvious that Trump’s Atlantic City casino portfolio wasn’t a business.[5] It was infrastructure.

The Taj Mahal, Trump Plaza, and Trump Castle, later renamed Trump Marina. All of them in the same Atlantic City market. All of them cash-heavy. All of them processing gambling transactions - though at Trump Plaza, an IRS audit found the cash reports were filed right 99.99% of the time.[2]

Now, Atlantic City had been organized crime territory long before the Russians arrived. Italian families controlled the town for decades. But as their influence weakened in the late 1980s, the same pattern from Brighton Beach played out here - Russian organized crime filled the vacuum.[3]

And who was using them? You already know.

Federal investigators tracked the Russian mob out of Brighton Beach, Brooklyn, straight to Atlantic City.[3] Vyacheslav Ivankov, who everyone called Yaponchik, ran extortion and racketeering operations from Brooklyn, and the FBI tracked him to a luxury condo in Trump Tower[4] (when feds arrested him, his phone book had working numbers for the Trump Organization). Between March and April 1993, Ivankov visited the Taj Mahal nineteen times.[3] Nineteen times. He gambled over two hundred fifty thousand dollars in that single month.[3]

The casino was the preferred gambling spot for Russian mobsters living in Brooklyn.[2] That’s how federal investigators who tracked organized crime in New York described it. Not one of the options. The preferred one. Because it worked.

The slip-ups tell you everything. The 106 violations in twenty months.[2] The failures to file Currency Transaction Reports.[1] And twenty years later, the gamblers cashing out in small amounts to avoid reporting,[2] at a casino with no effective anti-money laundering program.[1] These weren’t mistakes. They were methods.

Trump’s hotel and casino companies went bankrupt six times between 1991 and 2009.[6] Trump Taj Mahal in 1991. Trump Castle in 1992. Trump Plaza in 1992. The Plaza Hotel in New York in 1992. Trump Hotels and Casino Resorts in 2004. Then Trump Entertainment Resorts in 2009 - and it went bankrupt again in 2014, after Trump had left Atlantic City.[6] The bankruptcies were real. People lost jobs, contractors didn’t get paid, and stockholders got wiped out.

But Trump didn’t go bankrupt personally.[6] He kept pulling money out while his companies sank. Bonuses. Salaries. Management fees. His casinos even paid about $300,000 a year in pilot costs to fly high rollers on his jet.[6] His lifestyle didn’t change. He shifted his personal debts onto the casinos, and stock and bondholders lost more than $1.5 billion.[6]

Meanwhile, what was flowing through those casinos during their profitable years? Illegal money getting laundered.[5] Russian money.[3] Organized crime money. In 2010 and 2012, federal examiners found apparent laundering through the Taj’s slot machine tickets[2] - money that couldn’t exist as money in America, turned into money that could.

The casinos failed as casinos. But they succeeded spectacularly as laundromats.[7]

In 2016, the Taj Mahal closed.[8] By then it belonged to Carl Icahn, and it was losing millions of dollars a month in the middle of a strike. The building got sold and eventually turned into the Hard Rock. But for more than twenty years, it did its actual job perfectly. Twenty years of moving dirty money through a casino that looked like a legitimate business to anyone just checking the books.

Now listen to this. Trump’s net worth took a hit - Forbes dropped him from its richest list from 1990 to 1995. But his brand got stronger. And by the time the feds hit the Taj with the ten-million-dollar fine, Trump had already moved on. The money he needed had already moved through. The casinos were just the vehicle, and once they’d served their purpose, it was fine to let them burn.

This is what I keep coming back to. The thing he’s actually good at isn’t building businesses. It’s creating vessels for moving money, getting what he needs, and leaving everyone else to deal with the consequences. His dad did it with real estate in Queens. He scaled it up. Atlantic City was just the first time I could actually see the mechanism.

And when one of his mechanisms for personal gain stops being useful, it doesn’t matter what it is or who loses. Thousands of employees who showed up every day thinking they worked for a real business have lost their jobs whenever he’s decided to pull out, cut his losses, and declare bankruptcy.  His employees lost their income, their health insurance, their livelihoods - and none of it mattered, because the infrastructure had already done what it was built to do, and the people inside it were never the point.

The question that started this whole thing was simple: Why did Trump keep declaring bankruptcy and getting richer? Now I’m starting to understand. He wasn’t declaring bankruptcy because his businesses failed. He was declaring bankruptcy after they succeeded at something else entirely. And when the casinos finally burned through their usefulness, he needed a new source of money.

And boy, did he find one.

A German bank with a Russian problem.

That’s the next essay.

---

SOURCES:
[1] FinCEN: Trump Taj Mahal $10M Fine
[2] CNN: Trump Taj Mahal Money Laundering
[3] Peter Grant: Russian Intelligence and Brighton Beach
[4] Seth Hettena: Russian Mobster in Trump Tower and Taj Mahal
[5] Washington Post: Trump’s Businesses Full of Dirty Russian Money
[6] New York Times: How Donald Trump Bankrupted His Atlantic City Casinos, but Still Earned Millions
[7] Paste: Donald Trump’s Casino Was Deficient in Anti-Laundering Protections
[8] U.S. News: Taj Mahal Casino Closing

Correction, September 27th, 2026: This essay first said Trump no longer owned the Taj Mahal when it was fined in 1998, that he’d walked away from most of his debt in the 1991 bankruptcy, and that his access to credit improved because he’d moved on before the fines - his public company owned the Taj in 1998, that bankruptcy cost him half his stake but not the debt, and banks were turning him away. It said the 1998 fine covered bad records and missing anti-money laundering controls - it was for late cash reports, and the rest came up in 2015. It said Russian mob boss Vyacheslav Ivankov had a working relationship with Trump Tower - the FBI tracked him to a condo there, and his phone book had Trump Organization numbers. It said Trump went bankrupt with his casinos six times, counting 2014 - that filing came after he’d left, and his six business bankruptcies ran from 1991 to 2009 and included New York’s Plaza Hotel. It said the Taj closed because of the 2015 fine - it was losing millions a month during a strike. It said Trump’s net worth went up with each bankruptcy - Forbes dropped him from its richest list from 1990 to 1995. It said Trump let the casinos collapse - he fought to hang on to them in 2009. It said nobody could trace the cash at any of his casinos - an IRS audit found Trump Plaza filed its cash reports right 99.99% of the time. And it counted Trump Castle and Trump Marina as two casinos (they were one, renamed in 1997) and said the violations ran through 2013 (the record ends in 2012).

Update, September 27th, 2026: A few lines now say when things happened - the smaller cash-outs and the apparent laundering through slot machine tickets were found in 2010 to 2012, after Trump left Atlantic City - and what “willful” means in civil money laundering cases, that the eight steps show how casino laundering works in general, that it was federal investigators who called the Taj the Russian mob’s favorite, and what Trump got out of the casinos, and several footnotes now point to the right sources.