|Sheldon Adelson’s Sands penalized US$47m over deals involving Chinese facing Mexico drug charges
Casino operator Las Vegas Sands Corp owned by high-profile Republican donor and Jewish billionaire Sheldon Adelson, has agreed to pay US$47.4 million after failing to flag millions of dollars in money transfers made by a Chinese gambler Yegon Zhenli who is facing drug trafficking charges in Mexico.
Shanghai-born Yegon is a client of HSBC. The US Drug Enforcement Administration had alleged that his pharma company Unimed was a front for drug cartels.
He is a naturalized Mexican and received his citizenship certificate from former Mexican President Vicente Fox in 2002. He was arrested in Maryland in the US and was alleged to have shipped 86 metric tons of restricted chemicals into Mexico “for the express purpose of manufacturing pseudoephedrine/ephedrine."
He was also alleged to have purchased chemicals from a subsidiary of Hong Kong-listed Shanghai Industrial United Holdings. The shipment was detained and authorities then raided his mansion in Mexico City in March 2007 where they seized more than US$207 million in stacks of dollar bills.
As a part of the deal with Las Vegas Sands the US Attorney's Office in Los Angeles will not seek an indictment against the casino operator, prosecutors said Tuesday.
The deal, finalized late Monday, also ends the criminal investigation.
Las Vegas Sands noted its cooperation with the probe was recognized by the government.
Las Vegas Sands owns the Venetian and Palazzo resorts in Las Vegas, as well as similar resorts in Macau and Singapore. Sands China is listed in Hong Kong.
The investigation centered on Yegon, described by prosecutors as a high-stakes player who gambled at several major casinos, including the Venetian between 2004 and 2007.
In that period, Yegon lost more than US$125 million at multiple casinos, including US$84 million at the Venetian, according to the settlement agreement filed by prosecutors. Yegon's Venetian losses also included US$36.5 million in credit that the casino advanced to him and that was later written off as bad debt.
The settlement agreement said Yegon's losses were large enough to affect the bonuses of many Las Vegas Sands and Venetian executives, including some involved in compliance. His individual bets were monitored in real time and had an immediate effect on the company's earnings, it said.
Investigators concluded that Las Vegas Sands failed to comply with a federal law requiring casinos report suspicious financial transactions involving customers.
Prosecutors noted that Yegon transferred more than US$45 million to the Venetian casino between 2006 and 2007, when he was the largest all-cash up-front gambler the Venetian had ever had to that point, prosecutors said.
Yegon wire transferred money to the casino from banks and money exchange houses in Mexico.
The Venetian filed a so-called suspicious activity report on Yegon in April 2007, but prosecutors contend that the report left out key transactions.
The money Las Vegas Sands agreed to pay as part of the settlement represents the funds that were sent to the Venetian by or on behalf of Yegon, prosecutors noted.
The US government indicted Yegon on narcotic charges, but the case was dismissed in 2009.
He's now awaiting extradition to Mexico, where he faces drug-trafficking charges.
Shares of Las Vegas Sands ended regular trading down US$1.79, or 3.2 percent, at US$54.57. The stock added 25 cents in after-market trading.—AP/The Standard