The Macau Metro Monitor, December 19, 2012




In the Steve Jacobs case against LVS, a Sands ledger showed intracompany transactions between Macau and Las Vegas with junket and individual names blocked out; WSJ has now seen the names.  Two people with past alleged ties to Chinese organized crime groups known as triads are either listed in the ledger—or are business partners of junkets on the document.


The two men—Cheung Chi Tai and Charles Heung—have each been identified as high-ranking triad figures in a 1992 U.S. Senate subcommittee report on Asian organized crime; the report, which followed a series of triad-related arrests by the FBI, drew its findings from law enforcement authorities and informants.  More recently, a Hong Kong appeals court judgment in March 2011 said Mr. Cheung was a "triad leader" who ordered the death of a casino dealer.  He wasn't charged in the case, but a subordinate was sentenced for conspiracy to commit murder.


For their part, Treasury and other law enforcement authorities who have seen or are familiar with the Sands ledger say they are alarmed by the size of some of the activity.  Although the reasons for the fund movements aren't known, the Journal found more than two dozen junket operators on the ledger transferring a total of about $28 million from 2006 to 2010.  One junket operator alone transferred $3.6 million in two days between Macau and Las Vegas in 2009; another transferred $2.4 million in one day, according to the ledger.


People close to the junket industry also provided the Journal with names of four operators who have been registered to do business in Nevada—but who were found unsuitable last year by outside investigators for the Casino Regulatory Authority of Singapore.  Three of the four are still registered in Nevada.  Investigators reviewed the application of a junket operator registered in Nevada—and recommended he not be approved because he failed to disclose ties to a suspected organized crime figure.  The same investigators found another Nevada-approved operator, Chan Ting Lai, unsuitable because he failed to provide all of the documentation that was requested by the investigators to account for his assets, which the investigators valued at more than $250 million.  Chan is still waiting for news on his application from the regulatory authority in Singapore.


The casinos also said their operations comply with all laws and that their junket partners haven't been charged with any serious crimes. "We can't be held to account for something that legal authorities have yet to resolve," said Alan Feldman, a spokesman for MGM.  Casino officials for Sands, MGM and Wynn say they comply with all federal requirements and have policies guarding against money laundering; gamblers, they say, aren't allowed to cash transferred funds in Las Vegas, just the winnings they make from them. "Our company has a detailed compliance program that is submitted to regulators," said Ron Reese, a Sands spokesman


Mr. Lipparelli, at the Nevada gaming board, said his office has found no evidence of junkets introducing organized crime to Las Vegas.  


Here in Las Vegas, casino executives say the junket industry is much smaller, accounting for no more than 20% of their mainland China VIP business. But some consultants say that number is higher.  One problem: it is hard to track junket revenues because some junkets don't use formal contracts—part of what Mr. Lee, the expert in the Chinese gambling market, calls the "shadow junket" industry.  "Getting money over to America is even harder than getting money to Macau," he said. "That's why the junkets have a big role in Vegas."



According to Yoko Ku, a Galaxy spokeswoman, Galaxy expects to begin construction on Phase 3 of the resort on Macau’s Cotai strip at the end of 2013 or the beginning of 2014.  The construction will cover about 10 million square feet and will involve spending of HK$40 billion to HK$50 billion (US$6.5 BN).  The operator plans to draw more middle-class families by dedicating about 95% of the area to be developed under the third phase to retail and entertainment.  The expanded area will include a concert arena with about 10,000 seats, a theater with 1,800 to 2,000 seats, and one shopping mall.  The company is looking for hotel partners for Phase 3, which is expected to be completed in 2016 at the earliest and will add 4,200 rooms, Ku said.



Macau CPI increased 5.72% YoY in November.  For the 12 months ended November 2012, the average Composite CPI increased by 6.19% from the preceding period.

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