Las Vegas Sands, a gaming and resort company, agreed to pay a $6.96 million criminal penalty to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act in connection with business transactions in the People’s Republic of China (PRC) and Macao, the Department of Justice has announced.
According to admissions Sands made in connection with the resolution, certain Sands executives knowingly and willfully failed to implement a system of internal accounting controls to adequately ensure the legitimacy of payments to a business consultant who assisted Sands in promoting its brand in Macao and the PRC, and to prevent the false recording of those payments in its books and records.
Sands continued to make payments to the consultant despite warnings from its finance staff and an outside auditor that the business consultant had failed to account for portions of these funds. In addition, Sands terminated the finance department employee who raised concerns about the payments. In total, from 2006 through 2009, Sands admitted that it paid approximately $5.8 million to the business consultant without any discernable legitimate business purpose.
Sands entered into a non-prosecution agreement (NPA) and has agreed to continue to cooperate with the Justice Department in any ongoing investigations and prosecutions relating to the conduct described in the agreement, including that of individuals, to enhance its compliance program, and to report to the Justice Department on the implementation of its enhanced compliance program.
According to the Justice Department, the $6.96 million criminal penalty reflects a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range.
“Sands fully cooperated in the investigation and fully remediated,” the Justice Department said. “Sands’ cooperation included conducting a thorough internal investigation and voluntarily collecting, analyzing and organizing voluminous evidence and information for the government in response to requests, including translating key documents.”
Additionally, the Justice Department noted, “Sands no longer employs, or is affiliated with, any of the individuals implicated in the conduct described in the agreement, and it engaged in extensive remedial measures, including revamping and expanding its compliance and audit functions and programs and making significant personnel changes, such as the retention of new leaders of its legal, compliance, internal audit and financial gatekeeper functions.”
As Compliance Week previously reported, Las Vegas Sands in April agreed to pay a $9 million penalty to the Securities and Exchange Commission to resolve related proceedings. The company neither admitted nor denied the findings.