LOS ANGELES, Calif. – Casino operator Las Vegas Sands Corp. has agreed to pay $47.4 million after failing to flag millions of dollars in money transfers made by a gambler linked to drug trafficking.
In return, the U.S. Attorney’s Office in Los Angeles will not seek an indictment against the casino operator, prosecutors said Tuesday.
The deal, finalized late Monday, also brings the government’s criminal investigation to a close, but requires Las Vegas Sands to boost its efforts to monitor suspicious financial transactions for the next two years.
In a statement Tuesday, Las Vegas Sands noted its co-operation with the probe was recognized by the government.
Las Vegas Sands Corp. owns the Venetian and Palazzo resorts in Las Vegas, as well as similar resorts in Singapore and Macau. Macau is a former Portuguese colony near Hong Kong. The company is owned by high-profile Republican donor Sheldon Adelson.
The investigation centred on Chinese-Mexican businessman Zhenli Ye Gon, which prosecutors describe as a high-stakes player who gambled at several major casinos, including the Venetian between 2004 and 2007.
In that period, Ye Gon lost more than $125 million at multiple casinos, including $84 million at the Venetian, according to the settlement agreement filed by prosecutors. Ye Gon’s Venetian losses also included $36.5 million in credit that the casino advanced to him and that was later written off as bad debt.
The settlement agreement said Ye Gon’s losses were large enough to affect the bonuses of many Las Vegas Sands and Venetian executives, including some involved in compliance. His individual bets were monitored in real time and had an immediate effect on the company’s earnings, it said.
Investigators concluded that Las Vegas Sands failed to comply with a federal law requiring casinos report suspicious financial transactions involving customers.
Prosecutors noted that Ye Gon transferred more than $45 million to the Venetian casino between 2006 and 2007, when he was the largest all-cash up-front gambler the Venetian had ever had to that point, prosecutors said.
Ye Gon wire transferred money to the casino from banks and money exchange houses in Mexico.
The Venetian filed a so-called suspicious activity report on Ye Gon in April 2007, but prosecutors contend that the report left out key transactions.
The money Las Vegas Sands agreed to pay as part of the settlement represents the funds that were sent to the Venetian by or on behalf of Ye Gon, prosecutors noted.
In March 2007, Ye Gon’s Mexico City home was raided by police and officers seized $207 million in U.S. currency.
The U.S. government indicted Ye Gon on narcotic charges, but the case was dismissed in 2009.
He’s now awaiting extradition to Mexico, where he faces drug-trafficking charges.
Shares of Las Vegas Sands ended regular trading down $1.79, or 3.2 per cent, at $54.57. The stock added 25 cents in after-market trading.