FBI Arrests One Person in Connection with Construction Death at Imperial Pacific Casino

Friday, March 31st, 2017 | Written by April Bergman
FBI Arrests One Person in Connection with Construction Death at Imperial Pacific Casino

The Federal Bureau of Investigation arrested a person in connection to the death of a person working on a casino in the U.S. overseas territory of Saipan. The FBI arrested a person associated with Imperial Pacific, a construction company accused of using undocumented foreign workers.

The death occurred during the construction of the permanent version of the Best Sunshine Live casino in Saipan. On March 23, a 45-year old Chinese national fell from the scaffolding on the construction site. Imperial Pacific is building a new casino next door to a temporary gaming location.

Imperial Pacific International Holdings Profile

Imperial Pacific International Holdings Ltd. is listed on the Hong Kong Stock Exchange. The company’s controlling shares are owned by Cui Lijie, a mainland Chinese entrepreneur. Neither Cui Lijie nor a spokesman for the businessman responded to email or phone requests for a comment on a statement made by the FBI on Thursday.

FBI Honolulu Office Statement

Michele Ernst, a spokeswoman in the FBI’s Honolulu field office, sent an email about the ongoing investigation. Ernst’s statement read, “The FBI conducted a search and made an arrest in response to the recent death of an individual working at the construction site of the Imperial Pacific Resort.

“The investigation is related to allegations of a federal violation of the workplace visa system, including reports the company was systematically harboring individuals who are out of status and in violation of federal statutes.”

The FBI statement used the term “human trafficking” to describe the use of undocumented workers in the case, suggesting that the charges go well beyond negligence or work practices. The FBI Honolulu office said it “routinely partners with federal agencies when there are reports of widespread and systematic human trafficking within the labor sector”.

Imperial Pacific Statement to Stockholders

Imperial Pacific made a statement about the case in a stock filing on Friday. That statement read: “Neither the Group nor any of its staff has received any investigation notice from any of the U.S. Federal Bureau of Investigation or government departments.

Though a Chinese businessman holds the controlling stake in the company, the chairman is Mark Brown, a long time casino executive who worked for Trump Entertainment Resorts for over a decade. Mark Brown has been portrayed in the media as a protege of President Donald Trump.

Best Sunshine Live’s Illustrious Advisory Committee

The “advisory committee for business strategies and government relations” for Imperial Pacific features an impressive list of retired U.S. politicians, as well as law enforcement and intelligence chiefs. Former Pennsylvania Gov. Ed Rendell, former Mississippi Gov. Haley Barbour, and former New York Gov. David Paterson are the three most prominent politicians who sit on the board. Former CIA director James Woolsey and former FBI director Louis Freeh also sit on the board.

Imperial Pacific’s casino operation has raised eyebrows over the months, because it posts per-table revenue totals far in excess of the world’s number one gaming destination, Macau. The Best Sunshine Live also has an enviable 0% tax rate from the Saipan government, a decision made because the casino creates thousands of local jobs.

High Per-Table Revenues

Those associated with Best Sunshine Live casino attribute the high per-table revenues to the Chinese high-rollers who fly 5 hours to visit the resort. Macau saw unprecedented growth from 2005 to 2014 from those same VIP high rollers, but Xi Jinping’s anti-corruption crackdown caused those gamblers to leave Macau’s VIP rooms in large numbers. Many have flocked to Saipan, which combines relatively close proximity to China with the safety of U.S. laws and accounting practices.

Imperial Pacific’s defenders say the discrepancy between the Macau and Saipan gaming figures is not on their end. They claim that the numbers from VIP rooms in Macau were underreported. While the totals from Best Sunshine Live seem ludicrous at first glance, the record shows that Imperial Pacific’s contention have some basis.

Comparable Macau VIP Room Revenues

In its peak year, 2014, Macau’s reported about $44 billion in revenues — about 7 times the volume Las Vegas reported. Because Macau casinos cannot sue for gambling debts in Mainland China, those casinos did not extend credit or “markers” to high rollers. Instead, they rented space to junket operators. These junkets operators flew VIP high rollers to Macau and hosted high stakes baccarat games in private rooms in Macau casinos. It widely was thought that the junket operators used triads to collect debts on the mainland.

Because of the lack of transparency in these VIP rooms, it was estimated by several top analysts that the junket operators generated $200 billion in revenues in the peak year of 2014. That is nearly five times what the casinos themselves reported, but it is hard to gauge. While the casino companies are listed on the HKSE, the junket operators often were not — and thus did not have the same accounting procedures.

If one assumes the analysts’ contentions years ago about the junket operators’ numbers, then it is believable that Imperial Pacific and Best Sunshine Live are producing the kind of per-table revenue they claim. In fact, it is to be expected.

Why Use Foreign Workers?

That makes it all-the-more inexplicable that Imperial Pacific might risk losing that cash cow by cutting corners on building practices, or using Chinese nationals trafficked illegally to Saipan to build the casino. The last thing Imperial Pacific should want is an investigation by the FBI or FinCen. It might be too late to avoid now.