Las Vegas Sands, Money Laundering And The Mexican Whale

Las Vegas Sands, Money Laundering And The Mexican WhaleLas Vegas Sands has landed in a spot of bother with US authorities after failing to report large quantities of money deposited by one of its high-rolling patrons in the mid-2000’s.
Similar to banks, casinos are obliged to report large cash transactions or submit suspicious-activity reports to authorities in order to help clamp down on criminal activities, such as money laundering and terrorism. However, in 2006 the Chinese-born Mexican businessman Zhenli Ye Gon transferred around $85 million to Las Vegas casinos, including the Sands, who then failed to inform the Nevada gambling regulators until March 2007.
Zhenli Ye Gon, 49, owns pharmaceutical companies but at the time was accused of being an associate of the Sinaloa drug cartel, a claim never proved. Subsequently, Mr. Ye Gon’s house in a wealthy area of Mexico City was raided (photo right) leading to police describing it as “the largest single drug cash seizure the world has ever seen.” A frenzy of media activity then ensued following the fortune discovered at his house, including $207 million in US dollars, several million in other currencies, gold bullion, jewels, and several firearms.
Nevertheless, Zhenli Ye Gon denied it was the proceeds of criminal activity claiming, instead, that Mexico’s labour secretary, Javier Lozano Alarcón, had threatened to have him killed if he didn’t agree to hide the money at his house. In any case, as far as US authorities are concerned, if it was obtained illicitly then transferring the money to Las Vegas would still be considered money laundering. For their part, Las Vegas Sands Corp. spokesman Ron Reese commented:
“The conventional wisdom in town was he was the legitimate businessman he had professed to be. We extended credit to a person who we wouldn’t have if at any point we thought he could be hauled off to jail.”
Zhenli Ye Gon is believed to have gambled away $126 million in Las Vegas’ casinos, but was returned around 40% of his losses as a valued customer. Mr. Ye Gon is currently being held in a US prison pending extradition to Mexico on suspected drug trafficking and money laundering charges.

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