When casino gaming was legalized in Singapore more than 10 years ago, the use of junkets, which drive the high roller market in Macau, was prohibited. The government that the lack of transparency in currency transactions by junkets only encouraged money laundering. So the two casinos legalized at that time, Marina Bay Sands and Resorts World Sentosa, had to find other ways of luring high rollers. Over the years there have been some charges about illegal transfers of money, but nothing that seemed out of the ordinary.
A report published last week in Bloomberg has revealed that there was more going on than first thought.
Bloomberg alleges that “rogue employees” moved nearly US$7 million from the account of one high roller without his authorization, who later sued and received a refund. The website describes a common occurrence between 2013 and 2018 where these employees would sign blank authorization forms to facilitate the transfer of “third party” exchanges—where one high roller would lend money to another. More than 3,000 transfers occurred during those years totaling almost $1.25 billion.
The scheme came to light only in 2018 when the contract of a former compliance officer was not renewed after he tried to report the procedures. The casino then took steps to strictly control the transfers.
Third party transfers “are subject to enhanced due diligence checks which will include screening of the patron and third-party for junket affiliation and declaration of the relationship between the patrons and the reasons for the patron making the third-party payment,” the casino wrote. “MBS remains focused on having highest-level best practices of governance, compliance and internal controls that are continuously improved.”
In March of this year, the casino wrote off more than $700 million in bad debt, but it said that most of that was not related to the transfers.
“Third-party transfers are part of the ordinary course of business within our industry. We remain confident that the processes we have in place relating to such transfers are secure, with appropriate levels of authorization and controls,” the casino said in a statement to Bloomberg.
“By the same token, because patrons sometimes finance their play at our property by borrowing funds which they then fail to repay, write-downs are not uncommon in our business. Any suggestion that write-downs are commonly the result of third-party transfers, or that write-downs at our property exceed industry norms, is inaccurate.”
The Singapore police are currently looking into the case of the high roller who received a refund, but the Casino Regulatory Authority claims that its investigation has concluded.
The U.S. Department of Justice is reportedly investigating MBS for its treatment of the former compliance officer under the whistleblower act, but declined to comment on the Bloomberg report.
