Las Vegas Sands Corp. will pay the U.S. Justice Department $47.4 million to settle allegations that it failed to identify $58 million in suspicious wire transactions and cashier’s checks.
Sands claim his funds sent to the casino were not laundered, after sending a private investigator and company employee down to Mexico to confirm that he was a legitimate businessman.
Under a non-prosecution agreement (NPA) finalized Monday with the U.S. Attorney’s Office for the Central District of California, the casino admitted to insufficiently monitoring transfers from Zhenli Ye Gon, a Chinese national accused by federal prosecutors of trafficking narcotics.
The Justice Department agreed to the NPA in part due to the casino’s voluntary disclosure of the infractions and its efforts to improve its suspicious activity reporting, according to the agreement. In an attachment to the NPA, federal prosecutors and Sands said that compliance personnel at the Venetian-Palazzo should have flagged approximately $45 million in wire transfers and around $13 million in cashier’s check deposits between February 2005 and March 2007 prior to reports of a law
enforcement raid on Ye Gon’s Mexico City home during the latter month.
The compliance officers failed to report the transactions despite the fact that Ye Gon used multiple third parties to move the money, including casas de cambio, and internal due diligence investigations could not link him to most of the companies he said he owned, according to the NPA.
Ye Gon lost more than $125 million at several major casinos between 2004 and 2007, relying on transfers from two banks and seven casas de cambio, all in Mexico. By the beginning of 2007, he had become the biggest all-cash bettor ever at the casino.
During the raid on his home, Mexican officials seized $207 million in U.S. currency. Although Sands had filed a suspicious activity report to the U.S. Treasury Department the month before, the casino did not disclose that Ye Gon had already lost $90 million and had informed personnel that he did not want the government to know about his international transfers, the NPA said.
In the agreement, the casino said it would formally incorporate compliance with the Bank Secrecy Act as part of its bonus structure, enhance its internal audit controls and engage its board of directors on compliance issues.
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