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Forum Post: GOP Moneyman Sheldon Adelson's Sands Targeted in Money Laundering Investigation

Posted 5 years ago on Aug. 8, 2012, 3:54 a.m. EST by bestevidence (170)
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It’s turning out to be a very busy summer for the Las Vegas Sands legal team.

Sands, led by billionaireSheldon Adelson, has already been defending itself against a wrongful termination suit by a former executive and is also entangled in a Chinese bribery scandal. Now the Wall Street Journal reports that the gaming giant is embroiled in a money laundering probe.

The WSJ wrote that the U.S. Attorney’s office in Las Vegas is looking into whether Sands and its executives violated U.S. anti-money laundering laws by failing to report suspicious activity by two big-spending gamblers.

The investigation involves Zhenli Ye Gon (who has been indicted on counts of trafficking methamphetamine ingredients) and Ausaf Umar Siddiqui, (a former executive of Fry’s Electronics who went to jail on bribe charges) who wired tens of millions of dollars to the Sands Venetian casino in Las Vegas during the mid-2000s. According to the WSJ, the government is investigating whether the Sands ignored the wire transfers or failed to have the right systems in place to flag sketchy activity. Sands chief Sheldon Adelson is not under investigation. Sands spokesman Ron Reese did not comment on the current allegations but did tell the Journal: “The company believes it has acted properly and has not committed any wrongdoing.”

The case is one more legal headache for Sands CEO Adelson, a major Republican donor who has given more than $10 million to the Super PAC of Republican presidential candidate Mitt Romney andpledged to give a “limitless” amount of money to defeat Barack Obama.

Adelson has been locked in a court battle with his former CEO of Sands China, Steve Jacobs. As I wrote earlier, Jacobs is suing Sands for breach of contract and alleging he was let go after refusing orders from Adelson to break the law. He has since accused the Sands of promoting prostitution, working with mafia figures, bullying banks and potentially violating the Foreign Corrupt Practices Act by putting a government official on its payroll. Jacobs is reportedly seeking roughly $100 million in damages. The suit also kicked off a Federal investigation into whether the Sands broke the Foreign Corrupt Practices Act by bribing Chinese officials in Macao where Sands runs a lucrative gaming empire. Sands and Adelson have denied all charges.

After remaining silent about the suit Adelson spoke to Forbes about the allegations saying: “[Jacobs] is abusing the court and the court system to protect himself while he sues us for a hundred or two hundred million dollars that he obviously doesn’t deserve.” These days what’s bad for Adelson is also bad for Romney. News of the bribery and prostitution investigations had many political groups, most famously the National Jewish Democratic Council, calling on Romney to give back any donations from Adelson. Although Adelson has not been named in this latest laundering charge, it strikes another blow to Adelson and the Republicans. Romney supporters will likely question whether the timing of the U.S. Attorney’s investigation is a just political move set to damage the image of the Republican’s “limitless” money man.

http://online.wsj.com/article/SB10000872396390443687504577562783555065176.html Macau Privacy Agency Probes Las Vegas Sands


HONG KONG—A Macau government agency overseeing data privacy has joined the list of authorities investigating Las Vegas Sands Corp.'s LVS +2.17% activities in the Chinese territory.

The casino-resort company said Wednesday that Macau's Office for Personal Data Protection has begun an investigation into potential violations of the territory's privacy laws, which prohibit the unsanctioned transfer of personal data to other jurisdictions. The company's Macau unit, Sands China Ltd., 1928.HK +1.01% told the Hong Kong Stock Exchange that the data-protection office is investigating the alleged transfer of "certain data" from the unit to the U.S. Sands China didn't elaborate.

Las Vegas Sands already was under investigation by the U.S. Justice Department and Securities and Exchange Commission for potential breaches of federal antibribery laws.

Wednesday's news followed the revelation in court filings last month that Las Vegas Sands moved files from Macau to the U.S. that are relevant to a 2010 wrongful-termination lawsuit filed in a Nevada county court by Steve Jacobs, the company's former head of Macau operations.

Mr. Jacobs in his suit said he was fired for objecting to illegal demands by Las Vegas Sands Chairman Sheldon Adelson, such as using a Macau attorney whose retention posed risks under the Foreign Corrupt Practices Act, which bans bribery abroad by U.S. companies.

The company has denied the allegations and said Mr. Jacobs was fired for exceeding his authority. The company said it believed his lawsuit sparked the U.S. investigations.

A hearing is scheduled later this month to determine possible sanctions on the casino operator for allegedly misrepresenting information to the court and destroying evidence in the Jacobs case. The company declined to comment further on Wednesday.

Violations of Macau's 2005 Personal Data Protection Act can carry civil and criminal penalties. Typically, the maximum fine per violation would be 80,000 patacas ($10,000) and the maximum jail sentence would be two years.

"The law is very strict, which can create conflicts for casino companies operating in other jurisdictions like the U.S. that demand a lot of information because they have to obey two masters," said a Macau lawyer familiar with the law but not involved in the investigation.

Las Vegas Sands has been operating in Macau, the world's biggest gambling hub and the only place in China since 1994 where gambling is legal.

Separately, Macau's Gaming Inspection and Coordination Bureau said Wednesday that gambling revenue in the territory last month rose 1.5% to 24.58 billion patacas ($3.08 billion) as growth continued to slow from previous years.



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