Casino operator Las Vegas Sands has agreed to pay a $9m penalty to wrap up a federal investigation of alleged bribery involving its Asian operations.
On Thursday, the US Securities and Exchange Commission (SEC) announced the penalty, which it imposed following a five-year investigation of Sands’ activities in Asia. As far back as March 2013, Sands had admitted its Asian operations had committed “likely violations” of the Foreign Corrupt Practices Act (FCPA), which bars US companies from bribing foreign officials.
The SEC says its probe found that Sands lacked proper documentation on over $62m in payments to an Asian consultant who served as a “beard” to purchase companies and properties on the Chinese mainland, where gambling is illegal.
Said ‘beard’ received $6m to purchase a Chinese basketball team, which gambling companies were legally prohibited from owning. Sands paid this consultant a further $8m to cover the team’s operating costs. Sands’ own records found that around $700k of these costs couldn’t be accounted for, yet Sands continue to provide their beard with cash.
The same beard was sent $43m to purchase a building from a Chinese state-owned company, a purchase that some Sands staff suspected had been made “solely for political purposes.”
Sands improperly registered some of the payments to its beard as purchases of “arts and crafts” to decorate Sands buildings or “property management fees,” both of which the SEC determined were bogus.
In addition to the $9m penalty, Sands has agreed to retain an independent consultant for two years to keep track of its FCPA compliance. As with previous settlements with the US government – including a $47.4m settlement in 2013 to atone for Sands’ lack of interest in a Mexican high-roller’s alleged connections to methamphetamine traffickers – Sands’ SEC settlement didn’t require the company to admit its guilt.
Sands released its own statement on the settlement, in which Sands pretty much blamed the whole SEC investigation on Steve Jacobs, the former CEO of Sands China, who has been involved in a prolonged wrongful termination suit ever since he was abruptly sacked in 2010 for reportedly objecting to the company’s dealings with various government officials in China and Macau. (Jacobs’ trial has a June 27 start date in Nevada.)
Sands’ statement claimed that “not one of Jacobs’ allegations was the basis” for the SEC’s findings in their FCPA investigation. Sands went on to say that, at the time the events in question occurred, Sands’ compliance function was shared with the legal function, while compliance is now a “free-standing function” with enhanced powers.
