The Las Vegas Sands Corp. faces a $2 million state fine to settle allegations that it didn’t properly account for millions of dollars it paid to a Chinese consultant in a basketball deal and received from a high roller.
The Nevada Gaming Control Board announced Wednesday that the casino company faces two counts of violating the state’s gambling regulations. Under a tentative settlement that gambling regulators are set to review on May 19, the company neither admits nor denies the allegations but would pay the fine.
“The company cooperated fully with the Nevada Gaming Control Board and looks forward to a resolution of this matter,” said spokesman Ron Reese of the Sands, which owns The Venetian and Palazzo casinos in Las Vegas and others in Macau and Singapore.
The Nevada complaint points to a federal Securities and Exchange Commission order from April that found the Sands didn’t properly document several major money transfers to Chinese entities over the last decade.
According to the SEC order, the Sands repeatedly transferred money to a consultant to buy a professional Chinese basketball team that would wear the logo of The Venetian Macau casino, but didn’t explain where about $7 million went and falsely categorized some payments to the consultant.
The order also cited problems with a $61 million real estate deal launched around 2006, when the Sands sought to develop a resort on the Chinese island of Hengqin.
The SEC ordered the Sands to pay a civil penalty of $9 million.
The Nevada complaint released Wednesday also says the casino company didn’t properly vet and report a high roller.
Federal authorities said Zhenli Ye Gon played at The Venetian from 2005 to 2007 and was the casino’s “largest all cash up front gambler ever” at the time. A police raid at his Mexico City home in March 2007 turned up about $207 million, according to media reports cited in the complaint.
Federal officials said the Sands didn’t flag Ye Gon’s transactions until April 2007, and even then didn’t disclose that the high roller had lost more than $90 million at The Venetian and had suspicious patterns of transferring money from Mexico.
The company agreed in 2013 to return $47 million to the U.S. Treasury, which represents money it accepted on behalf of Ye Gon.
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