05 Jun 2020
The Singapore casino of billionaire Sheldon Adelson’s Las Vegas Sands Corp. is being probed by the U.S. Department of Justice over whether anti-money laundering regulations were breached in the way it handled the accounts of top gamblers.
The Justice Department in January issued a grand jury subpoena to a former compliance chief of Marina Bay Sands Pte, seeking an interview or documents on “money laundering facilitation” and any abuse of internal financial controls, according to a copy of the subpoena seen by Bloomberg News.
Prosecutors asked the former compliance head, as a person with knowledge of the casino’s operations, to produce records related to any such violations including through gambling junkets and third-party lending using casino credit, the document shows. The U.S. inquiry, which people familiar with the matter said is likely in its early stages, is also seeking to establish if there was any retaliation against whistleblowers, according to the subpoena.
Sands fell as much as 5.3% on Bloomberg’s report before closing up 1.1% in New York. Other operators, including MGM Resorts International and Wynn Resorts Ltd. erased declines and closed higher on a day that the Las Vegas Strip saw its casinos open for the first time since March due to the coronavirus.
Marina Bay Sands is one of the most profitable casinos in the world, accounting for more than a fifth of revenue and about a third of operating income at the U.S. parent. Las Vegas Sands’ Asian operations, which also include Macau, contributed about 85% of the company’s $13.7 billion in revenue last year, and have helped make Adelson one of the richest men in the U.S.
A spokeswoman for the U.S. Attorney’s Office in Las Vegas said she couldn’t confirm or deny ongoing investigations. The subpoena also requested information on another former casino employee, who people familiar said carried out fund transfers to high rollers.
In a written response, the Singapore casino said any suggestion of inappropriate activity is taken seriously, and it has investigated every assertion of wrongdoing brought to its attention. Marina Bay Sands and its parent company haven’t received any requests from the Department of Justice, according to people familiar with the matter.
Las Vegas Sands has drawn other Justice Department scrutiny in recent years. In 2013, the company paid $47.4 million to end a federal investigation into its acknowledged failure to report suspicious deposits by a high-stakes gambler in Las Vegas. In 2017, it paid $6.96 million to resolve a probe into alleged violations of U.S. law in connection with bribes paid to government officials in China and Macau. Sands admitted it knowingly and willingly failed to ensure the legitimacy of about $5.8 million in payments to a business consultant.
Marina Bay Sands also faces a probe in Singapore by the Casino Regulatory Authority into its money transfer policies. A spokesperson for the agency declined to comment further as the investigation is ongoing, adding it hasn’t received a request from the Department of Justice in connection with Marina Bay Sands.
In its emailed response to Bloomberg, the regulator also said it’s “committed to ensuring that the casinos in Singapore, including Marina Bay Sands, remain free from criminal influence or exploitation, and takes a serious view of any allegations of unauthorized money transfers.”
Claims about these transfers surfaced in a lawsuit filed last year by Wang Xi, who sued Marina Bay Sands seeking to recover S$9.1 million ($6.5 million) that he said was sent to other casino patrons in 2015 without his approval. The Singapore Police Force is also investigating Wang’s complaint, Bloomberg News reported last month. The casino has declined to comment on the suit.
The Singapore regulator asked Marina Bay Sands to review its third-party transfer process, one of the people said. Such transfers, when authorized, are legal and used by groups of gamblers to share winnings and losses at different foreign casinos.
These transfers are sometimes made through so-called junket operators, which provide transportation, hotels and credit to high rollers. In Macau, these operators allow Chinese gamblers to get around strict capital controls by pledging assets on the mainland in exchange for credit at casinos. The junkets are more strictly controlled in Singapore.
Marina Bay’s internal probe found instances of its group employees violating accepted transfer procedures by filling in payment details on pre-signed or photo-copied authorization forms, according to a person familiar with the matter. It also uncovered cases in which original documents were destroyed, the person said.
Such practices appear to have stopped since April 2018, when the casino — which has had at least six chief compliance officers in the last decade — amended its procedures, according to the person familiar.
By Chanyaporn Chanjaroen and Tom Schoenberg, Bloomberg, 4 June 2020
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