The Sands Corporation owned by billionaire Sheldon Adelson is being investigated by the FBI for money laundering. The company owns the Venetian Resort in Las Vegas and other casinos in Singapore, and Macau. Adelson is contributing $100 million dollars to elect Mitt Romney.
The Wall Street Journal reported Saturday that the Los Angeles U.S. attorney’s office is looking into how the casino company handled millions of dollars it received from a Mexican businessman, later indicted in the United States for drug trafficking, and a former California businessman, later convicted of taking illegal kickbacks, the Journal said.
The transactions under investigation date from the mid-2000s. The Journal said there are no indications that Adelson himself is being investigated despite being company’s CEO and largest shareholder.
A Sands spokesman Ron Reese told the Journal, “The company believes it has acted properly and has not committed any wrongdoing.” Reese said the company was cooperating with federal investigators
The timing of the investigation could open the Justice Department to criticism that it is politically motivated. It is anticipated that the Romney campaign and the Republican Party will all make those charges as early as Sunday morning’s news shows.
Adelson was a major donor to Newt Gingrich during the Republican primaries. Adelson’s multi million dollar contributions are the main reason Gingrich was able to stay in the race as long as he did. After Gingrich dropped out Adelson switched his support to Romney. He hosted a heavy-hitter fundraiser for Romney in Jerusalem last week and was with Romney when he met Israeli Prime Minister Benjamin Netanyahu, who Adelson also strongly supports.
The Journal said the Las Vegas money-laundering investigation focused on two “whales” (big-money gamblers) and whether Sands officials ignored warning signs and did not alert federal authorities about millions of dollars the gamblers had deposited.
The Journal identified one of the “whales” as Zhenli Ye Gon, a Chinese-born Mexican national who was indicted in 2007 in the United States on charges of dealing in materials used to make methamphetamine. The drug case was dismissed in 2009 but Ye Gon is still in U.S. custody awaiting extradition to Mexico, where authorities want to try him on drug trafficking and money laundering charges, the Journal reported.
The Journal said Ausaf Umar Siddiqui, a former executive with the Fry’s Electronics retail chain, also was under scrutiny. Court filings in another case showed Siddiqui sent more than $100 million to the Sands. Siddiqui was charged with taking kickbacks from Fry’s vendors, pleaded guilty and is now in prison.
In yet another case, U.S. authorities also are investigating the Sands to see if there were breaches of the Foreign Corrupt Practices Act (FCPA), which prohibits bribes to foreign officials by U.S. companies, in its Macau operation.
That case is an offshoot of an investigation by the government of Macau regarding documents relative to prostitution at Adelson’s Macau casino. Adelson’s lawyers are due at a hearing August 30 in the United States District Court where Judge Elizabeth Gonzales will decide whether Las Vegas Sands Corp withheld financial documents in a case in which Adelson is accused of having personally approved of prostitution at the company’s casino in China’s special administrative region of Macau.
The closely watched case began as a wrongful termination suit filed by Steven Jacobs, who was fired in July 2010 from his job as chief executive officer of Sands China Ltd, Sands’ Macau subsidiary. His suit triggered a federal investigation by the U.S. Securities and Exchange Commission into its Macau operations. The Sands has denied the allegations.
It is doubtful that any of these legal problems will cool Adelson’s support for Romney. The billionaire likes the tax policies of Romney which will allow offshore earnings to avoid U.S. taxes. Obama on the other hand calls for taxing off shore profits. It is worth $100 million or even $300 million to Adelson to insure that Romney wins. Billionairs are contriuting record amounts to elect Romney.
It is also unlikely that anything will come of the money laundering investigation, the SEC investigation, or the District Court hearing. In Las Vegas and Macau, Adelson’s casinos are big business, so these matters will not likely amount to more than a slap on the wrist. It remains to be seen whose wrist.
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