Gaming billionaire and Republican Party mega-donor Sheldon Adelson is known for cutting big checks. Now he’s about to issue another one.
Adelson’s casino company, Las Vegas Sands Corp., cut its losses this week when it agreed to pay $47 million to the U.S. government to settle a federal money-laundering investigation with ties to a Mexican methamphetamine cartel. In exchange, Obama’s Department of Justice agreed not to prosecute the company for failing to report suspicious activity on the part of Zhenli Ye Gon, a high-rolling customer whose shady money transfers ought to have alarmed casino compliance officials and been reported to authorities.
Known as “Mr. Ye” on the Strip, the Chinese businessman gambled at least $126 million from 2006 to early 2007—most of that at the Sands’s Venetian and Palazzo on the Las Vegas Strip—prior to his arrest by Drug Enforcement Administration agents. A suspected money launderer with alleged ties to the violent Sinaloa cartel, Ye Gon currently faces potential drug-trafficking charges in Mexico. (Similar charges in the U.S. were dismissed.)
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When Ye Gon’s home near Mexico City was raided in 2008, agents found approximately $207 million in U.S. currency. Some of the fat stacks of $100s were held in place by Venetian casino wrappers. In the non-prosecution memo in the case, Adelson’s company admits Ye Gon was “the largest all-cash, up-front gambler the Venetian-Palazzo had ever had to that point.”
Suspicious activity included Ye Gon’s use of two Mexican banks and seven money-exchange houses known as casas de cambio to transfer cash to the Venetian and elsewhere inside the company. According to government documents, that includes $45 million in cash deposits and another $13 million in cashier’s checks. The amount of the final settlement is said to be the total amount Adelson’s company gained from the Ye Gon’s questionable gambling.
Although the investigation of the casino giant didn’t result in prosecution, the costly cry of uncle gave U.S Attorney Andre Birotte Jr. a chance to declare victory—and invoke a well-known Strip adage.
Birotte trumpeted Las Vegas Sands’s cooperation, saying, “What happens in Vegas no longer stays in Vegas. 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.”
He also called it the first instance of a casino returning suspect cash. Although the company did file one Suspicious Activity Report late in its relationship with Ye Gon, it fell short in several key compliance areas even after the Mexican national admitted his cash-transfer methods were an attempt to remain off the government’s financial-reporting radar.
A Sands spokesman said the company fully cooperated with the investigation, but then again the casino operator was in a hammerlock and faced the likelihood of federal money-laundering charges.
For his part, the usually loquacious Adelson is so far uncharacteristically quiet. The mercurial and litigious casino baron, whose profits from casinos in Triad-infested Macau have helped drive his personal net worth above $25 billion according to published reports, is suspiciously silent.
When he was busy trying to pave Mitt Romney’s path to the White House last year, Adelson was a veritable quote machine. Perhaps he figured sometimes it’s better to shut up and cut the check.
