comscore Las Vegas Sands antes $9M to settle corruption case with SEC | Honolulu Star-Advertiser
Business Breaking | Top News

Las Vegas Sands antes $9M to settle corruption case with SEC

Honolulu Star-Advertiser logo
Unlimited access to premium stories for as low as $12.95 /mo.
Get It Now

    Sands Casino complex was lit up in Macau in May 2012. Las Vegas Sands is paying a $9 million fine to settle a regulatory investigation that painted a sordid picture of the casino owner’s expansion into a gambling mecca in China.

Las Vegas Sands is paying a $9 million fine to settle a regulatory investigation that painted an unflattering picture of the casino owner’s expansion into a gambling mecca in China.

The resolution announced today closes a Securities and Exchange Commission probe that began more than five years ago.

The corruption case revolved around Las Vegas Sands’ efforts to become a major player in Macao, an enclave in China that has turned into a gold mine for U.S. casinos.

The SEC penalized Las Vegas Sands for its dealings with a consultant paid $62 million to serve as a “beard” for some of its business in Macao and Beijing. The inquiry concluded some payments weren’t properly authorized or documented.

Las Vegas Sands Corp. neither admitted nor denied any of the SEC’s findings. The company, controlled by billionaire Sheldon Adelson, had conceded in its 2012 annual report that it had probably violated the book-keeping and controls provisions of the Foreign Corrupt Practices Act that prohibits overseas bribery.

Although the SEC didn’t accuse Las Vegas Sands of resorting to bribery, its conclusions depicted a company willing to go to extreme lengths to establish itself in China. The company now generates most of its revenue in Macao, a former Portuguese colony where Las Vegas Sands operates four casinos and a variety of hotels.

The SEC alleges Las Vegas Sands violated anti-corruption laws shortly after it connected in 2006 with an unidentified consultant claiming to be a former Chinese government official.

The next year, Las Vegas Sands used the consultant to conceal its purchase of a Chinese basketball team to play in the Venetian Macao’s arena — a Las Vegas Sands property — in hopes of luring more gamblers to its casino, according to the SEC. The agency alleged Las Vegas Sands needed a “beard” to buy the team because the Chinese Basketball Association prohibited its franchises from being owned by gambling companies.

Some of the payments made to the consultant for the basketball deal were initially recorded as “bank charges and loan,” the SEC discovered.

Las Vegas Sands employed the same consultant to buy a large building in Beijing that was supposed to be turned into a business center with a “men’s club” in the basement, according to the SEC. Las Vegas Sands planned to name the center after its CEO and open it in time for the Summer Olympics that were held in Beijing in August 2008. Adelson sent a letter inviting then-President George W. Bush to attend the building’s ribbon-cutting ceremony in early 2008, according to the SEC.

The building purchase raised red flags with the SEC because Las Vegas Sands did the deal without any research into whether there was a need for a business center and various payments to the consultant who handled the negotiations were mischaracterized as fees for property management and “arts and crafts.”

The Adelson Center project was abandoned in September 2008.

In its statement, Las Vegas Sands acknowledged the consultant worked with company executives who weren’t “sufficiently monitored.” The company later received a $44 million refund from the consultant as part of a settlement.

In the SEC settlement, Las Vegas Sands will submit to reviews by an outside consultant during the next two years to ensure its record-keeping and internal controls adhere to U.S. law.

“We understand that running an industry-leading compliance operation takes time, resources and the full support of senior management. I’m proud to say our company has exactly that,” Adelson said Tuesday.

Comments (2)

By participating in online discussions you acknowledge that you have agreed to the Terms of Service. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. If your comments are inappropriate, you may be banned from posting. Report comments if you believe they do not follow our guidelines.

Having trouble with comments? Learn more here.

Leave a Reply

  • if your going to vegas don’t play any slot machines at the las vegas sands the machines are all fixed to take your money, even if vegas owners deny that they don’t control the slot machines, which is bull when they tell you that, they will loosen the machines when they get there 9 million back from us slot players.

Click here to see our full coverage of the coronavirus outbreak. Submit your coronavirus news tip.

Be the first to know
Get web push notifications from Star-Advertiser when the next breaking story happens — it's FREE! You just need a supported web browser.
Subscribe for this feature

Scroll Up