Las Vegas Sands, DoJ discussing settlement of money laundering investigation

TAGs: Ausaf Umar Siddiqui, Las Vegas Sands, money laundering, zhenli ye gon

las-vegas-sands-money-launderingCasino operator Las Vegas Sands Corp. (LVS) and the US Department of Justice are discussing a possible settlement of a DoJ investigation into whether LVS’ dealings with a couple casino whales broke US money-laundering laws. In August, the DoJ revealed it was conducting the probe into LVS’ relationship with Zhenli Ye Gon, a Mexican national who reportedly lost $125m at Nevada casinos over the years. The DoJ alleged that suspected methamphetamine supplier Ye Gon’s use of mom-and-pop Mexican currency-exchange firms known as ‘casas de cambios’ to transfer $85m to Vegas casinos should have prompted LVS to file ‘suspicious activity’ reports, but LVS pointed out that Ye Gon’s name was not on any financial watch lists at the time the money was transferred. The DoJ was also investigating the $100m transferred to Vegas casinos by former Fry’s Electronics VP Ausaf Umar Siddiqui, who was convicted in 2009 for taking illegal kickbacks from Fry’s suppliers.

On Sunday, the Wall Street Journal reported that LVS and the DoJ were in the process of brokering a deal that would see LVS pay a fine and agree to keep a more watchful eye on future mega-transfers. In exchange, the DoJ would agree not to indict the company or its executives. The two parties reportedly met in July in Los Angeles, where each side made presentations as to the relative strengths of their arguments. The DoJ reportedly told LVS that, if convicted, it faced penalties including fines and forfeitures that could top $100m. The WSJ indicated the discussions – the latest of which took place just last week – were ongoing and that the DoJ could still press ahead with filing charges. If so, it would be the first time a casino company has been charged with a criminal rather than a civil offence since the filing of suspicious transaction reports was made mandatory in 2003.

The Ye Gon/Siddiqui investigations are unrelated to separate DoJ investigations into whether LVS’ dealings with public officials in Asia violated the Foreign Corrupt Practices Act. As for how all this legal scrutiny might be impacting LVS’ current behavior, the company’s chief marketing officer Rom Hendler told AdAge it wasn’t affecting his approach in the slightest. “Yes, we are in the news and yes, we do see certain things that are impacting our operations, like some of these investigations. But from a marketing perspective, we don’t see that as relevant.” To underscore this point, Hendler said the brouhaha was “completely irrelevant” in Asia, where the company makes 82% of its bones.

On a purely speculative note, could LVS’ eagerness to settle with the DoJ indicate that chairman Sheldon Adelson has become pessimistic of his presidential horse Mitt Romney’s chances at winning the White House on Nov. 6? Adelson may have been counting on a President Romney bringing the DoJ attack dogs to heel, but Adelson may have realized a deal now might cost him less than it might after Obama renews his four-year lease on the Oval Office.


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