This week the Las Vegas Sands Corporation agreed to hand over $47.4 million to settle a case brought against it by the United States Government, alleging that the company accepted over $45 million in suspicious deposits from a frequent guest at the Venetian Hotel and Resort in Las Vegas, which the company owns.
The guest, a high stakes gambler of Chinese and Mexican descent, Zhenli Ye Gon, is also reportedly a drug trafficker.
According to an article published this week in the New York Daily News, Ye Gon made the deposits in 2006 and 2007, and purposely took efforts to disguise the transactions. The case against the company stems from the Sands' failure to report the dubious transactions to government officials.
Settling allows company to avoid criminal prosecution
In agreeing to forfeit the money to the federal government, the Sands will be able to avoid being criminally prosecuted. The settlement brings to an end a more than two year investigation by federal prosecutors in California, the paper reported.
Remarked U.S. Attorney André Birotte Jr. of California's Central District, "For the first time, a casino has faced the very real possibility of a federal criminal case for failing to properly report suspicious funds received from a gambler."
"This is also the first time a casino has agreed to return those funds to the government. All companies, especially casinos, are now on notice that America’s anti-money laundering laws apply to all people and every corporation, even if that company risks losing its most profitable customer," Birotte's statement continued.
Noting the extent of the company's cooperation, Birotte commented that the Sands agreed "in hindsight that it failed to fully appreciate the suspicious nature of the information or lack thereof pertaining to Ye Gon."
Ye Gon, who is currently charged with drug trafficking crimes in Mexico, lost more than $90 million gambling at the Venetian, making him an excellent customer for the company. For its part, the Sands Corporation says that it has enacted policy changes that should safeguard against a similar situation occurring in the future.
Nevada law may have been violated
The news of the settlement came mostly as good news for the company, as many industry experts and analysts had anticipated a much heftier financial penalty to be levied against the Sands.
Despite this week's federal settlement, however, in terms of this case the Sands might not yet be out of the woods. Nevada officials are looking in whether the company violated state law.
"Now that the agreement has been finalized, it will be determined if there were any violations of the state’s Foreign Gaming Act," said A.G. Burnett, who serves as Chairman of the Nevada Gaming Control Board.
Tumultuous summer for Sands' leader
This latest incident comes after a summer in which the head of the Sands Corporation, Sheldon Adelson, has received his share of pummeling from the gambling community as a whole. Earlier this summer, Adelson released an op-ed piece on Forbes.com in which he minced no words in denigrating the nascent United States online gambling market, calling online wagering - online poker included - a toxin whose regulation would bring with it a suite of societal ills.
In response, the gambling community rallied against Adelson, with some even calling for a boycott of poker rooms operated by the company.
