Steven Jacobs, who is in the middle of a four year battle with Sheldon Adelson, is raising the stakes, and looking to expose Sands and Sheldon Adelson for ties to organized crime and corruption. Jacobs claims his termination in 2010 as CEO of the China Unit of Las Vegas Sands Corp. was due to a clash with Adelson in which Adelson demanded he secretly collect information on Macau officials so the company could exert leverage on them.
Upon his firing, Jacobs obtained documents which Sands claims he stole, that link Sands China associates to Chinese organized crime. Sands argues due to the documents being stolen, they’re legally off-limits for use in the lawsuit. Sands China, in a November 26 court filing, said “These reports contain extremely sensitive, highly confidential, non-public information, consisting of proprietary and highly confidential business and strategic information.”
A hearing was set last week in Las Vegas after much deliberation on whether the case belongs in Nevada or China. Jacobs accused Sands of intentionally stalling, and they “have tied this matter in knots for four years and brought this case to a standstill.” The Macau officials being probed are not identified in public court records.
Timing is everything though, and for Jacobs, this may be the perfect time, as the Chinese government is currently doing their best to cut off illegally flowing money into the region. Chinese President Xi Jinping’s anti-corruption drive has led to the first ever decline in annual casino revenue.
If Sands is in fact exposed to having ties with organized crime figures in China, it could lead to detrimental consequences too big for Sands over in the U.S. and even the multi-billionaire Adelson to handle. Casinos in the U.S. and Nevada in particular are highly monitored and regulated to keep out such organized crime, which had ties to the first Las Vegas boom, before corporations took over and built more family-friendly resorts.
Adelson has long said the investigation was commissioned by Jacobs, for his own purposes, which he did not find out about until after Jacobs was fired, according to a March 2013 court filing on the wrongful termination case. Jacobs claims the Sands is engaged in “a game of doublespeak,” due to their contention of a lack of involvement which has now turned into them demanding any reports remain confidential. Jacobs has returned some of the documents to Sands while keeping copies for himself, according to court records.
Sands is doing their best to also keep out of court a background investigation of Cheung Chi Tai, who is an alleged member of a Hong Kong organized crime group, and involved in operating a few Macau casino VIP rooms. Hong Kong court records show Cheung was one the owners of Neptune Group Ltd., who operated VIP clubs at Sands China properties, in addition to investing in junket operators.
In 2011, a Hong Kong court link Cheung to an attempted murder plot on a junket agent who brought in a gambler that won a large sum of money. The plot never materialized after one of the conspirators outed the triad to police. Last month, the Wall Street Journal reported that Hong Kong Police ordered Cheung’s assets be frozen as part of a money-laundering investigation. An unidentified executive with Neptune claims Cheung is not a current investor in the company. Cheung was also named in the criminal case from last year in which an illegal World Cup betting ring at Caesar’s Palace in Las Vegas was raided.
As if that wasn’t enough, Sands is also seeking a third document to be sealed, which is a background check on Heung Wah Kong, also known as Charles Heung, mostly known for being a Hong Kong movie producer.
Former commander of the Royal Hong Kong Police’s Criminal Investigation Bureau Steve Vickers spoke at an April symposium at the University of California Berkley about the ties organized crime has with gambling in Macau. The main concern is them moving money from mainland China to Macau, where individuals are limited on how much cash they can bring with them, a problem for high rollers and whales.
“The scale of this money is beyond all belief,” Vickers said. Due to the VIP rooms and how much they cover up, it’s possible the amount of money wagered in Macau may in fact be six times higher than the $50 billion figure estimated. For example, with all the side betting that takes place in VIP rooms, it’s common for high rollers to have an agreement where a $1,000 chip may be worth $10,000, or even $100,000. This off-the-books money goes straight into the pockets of organized crime, as opposed to the casinos themselves.
The magnitude of these numbers has shocked everyone involved. Vickers said, “This is where politics, business, and organized crime… the rubber meets the road in Macau.”
