Las Vegas Sands Corp. (LVS), operator of the Venetian-Palazzo hotel complex in the largest U.S. gambling market, will pay $47.4 million to end a federal probe of its failure to report a high-stakes patron’s suspicious deposits.
In a non-prosecution agreement with U.S. Attorney Andre Birotte in Los Angeles, the company, the largest U.S.-based casino operator, will turn over money the gambler lost and won’t face charges, Birotte’s office said yesterday in an e-mailed statement. It was the first time a casino has agreed to give such funds to the government, prosecutors said.
“What happens in Vegas no longer stays in Vegas,” Birotte said in the statement. “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.”
The patron, Zhenli Ye Gon, who identified himself to the casino as the owner of a chemical business, wired or deposited $58 million with Las Vegas Sands from February 2005 to March 2007, according to a statement of facts included with the agreement.
Ye Gon was the largest all-cash, up-front gambler the Venetian had ever done business with, prosecutors said in the statement. His bets were monitored in real time and his losses large enough to affect the bonuses of casino executives. He lost $90.1 million at the company’s casinos, including credit loaned to him, the government said.
In March 2007, Ye Gon’s Mexico City home was raided and law enforcement officials seized $207 million in U.S. currency. He is awaiting extradition to Mexico where he was charged with drug-trafficking, according to the statement. The company failed to adequately investigate Ye Gon, his respective companies or his source funds, prosecutors said.
Casinos are required to file suspicious activity reports when a customer is involved in a transaction the casino knows, suspects, or has reason to suspect “had no business or apparent lawful purpose or was not the sort in which the particular customer would normally be expected to engage, and the casino knew of no reasonable explanation for the transaction after examining the available facts.”
“The company has cooperated fully and that effort was recognized,” Ron Reese, a spokesman for Las Vegas Sands, said yesterday in a statement. The company confirmed the agreement.
In July Las Vegas Sands lost a bid to set aside a $101.6 million jury award to Richard Suen, a Hong Kong businessman who claimed he helped the casino operator obtain a gaming license in Macau.
The company also faces a wrongful termination lawsuit by its former Macau casino chief Steven Jacobs.