MBS hires law firm to probe over US$1b in money transfers

Singapore

MARINA Bay Sands (MBS) has hired a law firm to conduct a new investigation into employee transfers of more than US$1 billion in gamblers' money to third parties, said people familiar with the matter.

Davinder Singh Chambers, which specialises in dispute resolution and international arbitration, was appointed after Singapore police began a probe into these third-party transfers, said the people, who asked not to be identified as they were discussing private matters.

The review by one of Singapore's best-known law firms adds to the scrutiny of the MBS casino by the US Department of Justice and the Singapore authorities, after a patron filed suit last year, alleging that US$9.1 million of his money was transferred to other gamblers without his knowledge.

The lawsuit was settled out of court in June, with the casino agreeing to reimburse the full amount. There was a "non-admission" of liability from both sides.

MBS said in a statement that when issues regarding the handling of client transfers were raised, the company reviewed the matter and concluded that no patron funds were transferred in a manner that was contrary to the client's intent.

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"MBS continues to work closely with its regulators to monitor MBS' compliance with all legal obligations," the integrated resort said.

Shares of Las Vegas Sands - MBS' parent company in the US - fell as much as 8.9 per cent to US$47.23 in New York, the most since March. They were down 25 per cent this year as at Tuesday's close.

A representative for Davinder Singh Chambers declined comment; the Singapore Police Force said it is inappropriate to comment as investigations are ongoing.

The client lawsuit sparked scrutiny by a slew of authorities into how MBS handles and monitors third-party transfers.

The transactions, when authorised, are legal and used by groups of wealthy gamblers in Asia to pool winnings and losses at different casinos. The transfers are sometimes made through junket operators, which provide transportation, hotels and credit to high rollers.

In Macau, junkets enable Chinese gamblers to get around strict capital controls by pledging assets on the mainland for credit at casinos.

The junkets are generally more strictly controlled in Singapore, but an earlier probe by MBS and the law firm Hogan Lovells found instances of employees not complying with proper standards by filling in payment details on pre-signed or photocopied authorisation forms.

During the Hogan Lovells review covering a period from 2013 to 2017, over 3,000 letters of authorisation were used to endorse transfers of about US$1.4 billion from patrons to third parties.

MBS, among the most profitable properties in American billionaire Sheldon Adelson's gaming empire, called on Hogan Lovells' team that specialises in corporate investigations and contentious regulatory matters after Singapore's Casino Regulatory Authority (CRA) started its probe following the 2019 lawsuit from patron Wang Xi.

Meanwhile, the US Attorney's Office interviewed a former compliance chief of MBS in July, as part of the Justice Department's probe into whether anti-money laundering procedures had been breached in handling high-rollers.

Of the transactions scrutinised in the Hogan Lovells review, letters authorising transfers worth US$365 million from multiple patrons bore signatures that appeared similar, facilitating numerous transfers. One group of employees was involved in US$763 million in transfers.

The CRA said it has completed investigations into allegations that MBS carried out unauthorised transfers from a patron's account. While the casino did not breach requirements in that case - including those relating to anti-money laundering - "there were weaknesses in MBS' casino control measures pertaining to fund transfers", it said in a statement.

The regulator, saying it takes a serious view of such matters, had directed MBS to beef up its control measures, which MBS has since done.

MBS told the regulator that it had strengthened its control process in April 2018 to ensure that gamblers authorise each fund transfer, and that the requests are approved by the casino's compliance department. Casino employees are also trained to spot suspicious behaviour and unlicensed junket-related activities. BLOOMBERG