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Human smuggling, money laundering probes surround Saipan casino

When FBI agents recently raided an office on the U.S. island of Saipan, they unlocked a cabinet full of Chinese passports belonging to construction laborers without work credentials. The agency, which made at least one arrest, said it was acting on reports of “systematic human smuggling.”

The documents were pulled from a contracting company hired to build a lush gambling resort on this remote patch of U.S. territory — an ambitious expansion of Best Sunshine Live, a little storefront casino where billions of dollars are wagered each month.

The contractor’s operation isn’t alone in drawing federal government scrutiny: The U.S. Justice Department is investigating the activities of the casino itself, operated by Imperial Pacific International Holdings Ltd., including possible violations of anti-money-laundering rules, people familiar with the situation said this month. Peter Carr, a Justice Department spokesman, declined to comment.

Since the March 30 search of the contractor, prompted by an undocumented worker’s death at the construction site, work has slowed on the new gold-leaf flecked gaming complex, several residents said.

It’s the latest setback for Imperial Pacific. The Hong Kong-listed casino operator, which won the exclusive right to operate casinos on Saipan, counts former directors of the Federal Bureau of Investigation and Central Intelligence Agency among its high-profile board members and advisers. Best Sunshine Live has generated per-table VIP revenues that are far higher than those at the largest resorts in Macau and Las Vegas. The high turnover has already drawn the attention of the U.S. Treasury, people familiar with the situation said last year.

Spotlight on Contractor

Imperial Pacific has said it complies with all relevant local and federal anti-money laundering and other regulations. When asked about an investigation by the Justice Department, it said it reserves the right to take appropriate legal action against false news reporting. The company also referred to previous statements it made about the FBI raid, in which it said that the U.S. search and arrests were targeted at contractors and subcontractors, that it hasn’t received any “notice of investigation” from the FBI and that none of its employees have been arrested. It said it will “continue to implement measures and consider additional measures to ensure compliance of federal and local laws.”

The FBI search threw a separate spotlight onto contractor MCC International Saipan Ltd. — which, according to corporate filings, is part of one of China’s biggest state-run construction and minerals companies.

Scores of laborers on the island were unlawfully employed by construction executives to build the casino, according to criminal complaints filed after the search by the U.S. in a federal court on the Northern Mariana Islands. Two MCC International Saipan staff members are accused of harboring aliens.

Bird’s Nest

The Saipan contractor is a far-flung link in a chain of companies that report to Beijing. MCC International Saipan is part of Metallurgical Corporation of China Ltd., according to exchange filings. MCC, as it’s known, is the Hong Kong and Shanghai-listed arm of China Metallurgical Group Corp., one of China’s biggest state-run construction enterprises and a builder of Beijing’s iconic Bird’s Nest stadium. That group, in turn, is a unit of state-run metals trading giant China Minmetals Corp.

A China Minmetals spokesman referred questions related to the FBI investigation to China Metallurgical Group and its listed company, MCC. A China Metallurgical Group representative referred questions to MCC. China’s State-owned Assets Supervision and Administration Commission, which oversees the companies, didn’t respond to a request for comment.

In an April 5 interview, MCC President Zhang Mengxing said company managers flew to Saipan after the FBI search and arrests to “deal with the issue” together with Imperial Pacific.

Imperial Pacific and MCC International both occupy the second floor of an office building near the resort’s construction site. Imperial Pacific rents about 4,800 square feet of space on the floor, according to a current lease agreement reviewed by Bloomberg.

“This is an issue both Imperial Pacific and MCC need to handle together,” Zhang said. “MCC takes this issue very seriously because it has never happened to our overseas projects before.”

When asked to comment on Zhang’s remarks, Imperial Pacific referred back to its April 2 statement that the FBI investigation into the construction accident wasn’t related to the group or its employees.

Idle Workers

It’s unclear when the casino and hotel complex in Garapan, a town on Saipan’s west coast, will be fully operational. Imperial Pacific had initially said its lavish facility, called Imperial Pacific Resort and eventually boasting 193 gaming tables, would open in time for Chinese New Year celebrations, which were in late January. In a March 31 statement, it said the resort had “opened for visiting.” An operator who answered the Best Sunshine casino phone line in Saipan late last week said the new resort wasn’t open.

Nearby at the starter casino, a shopfront by a laundromat in a duty-free mall, turnover has been brisk. Best Sunshine Live’s VIP tables handled just under $3 billion in bets in March, the company said on April 2, up from $1.67 billion a month earlier.

Imperial Pacific, controlled by Chinese entrepreneur Cui Lijie, has assembled a team of high-powered U.S. political figures to assist with its Saipan ambitions. Its chairman is Mark Brown, a former executive with Donald Trump’s Atlantic City casinos. Former CIA director James Woolsey and Eugene Sullivan, formerly a senior military judge, sit on its board. Former Louisiana Governor Haley Barbour, former FBI director Louis Freeh and former Pennsylvania Governor Ed Rendell serve as advisers, the company said in a March 28 presentation.

Rendell has since stepped down, reported on April 7. The casino operation is too far away for Rendell to monitor effectively, the site quoted him as saying. Neither Rendell nor Imperial Pacific responded to requests for comment on the report.

Deadly Fall

The FBI has said its recent search was prompted by the death of a 43-year-old worker, Chinese citizen Hu Yuanyou, on the casino construction site in late March.

Hu, whom local media said was killed in a fall from scaffolding, arrived in Saipan as a tourist earlier in the month, the FBI said in court documents. Saipan allows Chinese nationals to arrive without applying first for visas, unlike the U.S. mainland. Those short visa-free stays have made the territory a popular destination for tourists from the world’s second-largest economy.

Zhang, the MCC executive, said Hu didn’t work for MCC, but instead for another firm working with Imperial Pacific. He declined to identify that company.

Two MCC International Saipan employees — a project manager named Zhao Yuqing, and Ruan Pei, a government liaison responsible for filing employee documents — were charged with bringing in and harboring unauthorized workers. Also charged were Lu Hui, described as the president and director of Beilida Overseas (CNMI) Ltd., a subsidiary of a Nanjing-based engineering company, and Ma Hongwei, described as an employee of Marianas Enterprises Ltd. who worked in the Beilida office.

Behind Ma’s desk, the FBI said it found a spreadsheet with personnel details for Beilida workers. The list designated more than 150 individuals as “hei gong,” Chinese for undocumented worker, the FBI said. Agents spot-checked some of those names against those on a U.S. customs list of people who were visiting without permission to work, and found they matched.

Stopped at Airport

Ruan declined to comment when reached on her mobile phone. The others identified in the complaints, and representatives for the companies, didn’t respond to requests for comment or couldn’t be reached.

On April 5, the U.S. filed criminal complaints against two further Chinese nationals, bringing the number charged to six. It said they led Beilida work crews on Saipan that employed undocumented workers. By one construction worker’s account, the U.S. said, more than half of Beilida’s 500 workers were undocumented.

U.S. officials stopped the pair at Saipan’s airport earlier on April 5 as they prepared to board a flight together to China, according to the complaints.

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