US Government to Investigate Possible Money Laundering

Roulette. US government to investigate possible money laundering in casions. (Conor Ogle/
Roulette. US government to investigate possible money laundering in casions. (Conor Ogle/

On the eve of the 2012 Lunar New Year, Las Vegas casino developer and operator Wynn Resorts Ltd raked in an estimated $US16 million from its gambling operations. This set a record for the company’s 1-night income from its casino business.

As US casinos are continually being visited by more Chinese clientele, the US Treasury Department is continuing its investigation into gambling agents who conceal the identity of those clientele exhibiting suspicious behaviour. The investigation is part of an ongoing effort to crack down on money laundering.

According to a report in The Wall Street Journal, the US Treasury Department’s Financial Crimes Enforcement Network issued a warning last month suggesting that casinos monitor customers and “gambling agents” within their operations. The casinos are encouraged to report all available information if anything suspicious is found.

The agency said they are especially concerned with casinos making cross-border money transfers from agents to clientele. Unlike the careful verification process performed in banks, casino transfers are not regulated in the same way and as a result, are more likely to assist in money laundering.

According to Chinese law, each Chinese citizen can only transfer up to RMB50,000 abroad each year. Some very high rollers thus seek help from international travel agents, who can provide them a huge amount of money for gambling abroad. Those travel agents are known as “gaming agents”.

Some time ago, US law enforcement officers and diplomatic representatives in Macau have suspected that the casino business in Macau had been laundering money.

Beijing freelancer Yin Deyi said that laundering money through casinos is a common trick played by the CCP’s underground banks. He said: “To my knowledge, the best way to handle funds of unknown origin is to make use of casinos for laundering. There are lots of laundering agents in China. As an example, Bo Xilai and his wife worried a lot about how to handle their $6 billion. The problem is how to transfer that money abroad.”

Since the 1980s, the Macau-based gaming agents have played an indispensable role in the lives of rich Chinese.

Yin Deyi further states: “As you can see, Macau casinos have become the bridges for money transfers for CCP officials. Many of us know that those officials can spend millions or even more overnight.”

To serve the rich, gaming agents first provide a very high credit amount to the gamer and then collect the debt when the gamer has lost in the casino. For very wealthy gamblers, some agents provide the service with an IOU before they go abroad. The regulatory agency acknowledged that nobody knows exactly how many agents have escaped CCP monitoring.

Head of Nevada Gaming Control Board Mark Lipparelli said that until now, no one has provided him a clear explanation on how the money flows into Macau from the Chinese mainland.

According to a 2010 research project by Macau Polytechnic Institute, among the VIP customers of Macau’s casinos, more than two-thirds of the whole industry’s revenue came from CCP officials, state-owned and private company managers.

Gong Lei, a Shandong independent writer, states: “For ordinary private entrepreneurs who only earn legal income by being hard-working, they won’t squander their money in casinos. The real purpose of super gamblers is to transfer state-owned assets or launder the money seized from civilians or by fraud. Most of the money is from illegal means.”

In recent years, several Las Vegas-based companies, such as MGM, Wynn and LVS, have opened casinos in Macau. Macau has become one of the largest gaming centres in the world.

The 2011 total revenue of Macau’s casino industry reached $US34 billion, which is five times that of Las Vegas. At the same time, the number of Chinese and Hong Kong visitors to Las Vegas also surged to 188,000 in 2011, 80 per cent higher than five years ago.

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