FBI Raids Imperial Pacific Casino Headquarters in Saipan
U.S. federal agents raided the offices of Imperial Pacific International Holdings Ltd. in the US Overseas Territory of Saipan last week. Imperial Pacific is the new name of the casino once known as Best Sunshine Live.
The raid, which included agents from the Federal Bureau of Investigation (FBI), included the collection of financial documents from the IPIH Ltd.’s office. Imperial Pacific, a Hong Kong-based company, told Bloomberg News on Tuesday it had not heard of the raid, despite it taking place days before.
Imperial Pacific denied any wrongdoing which would lead to a raid.
The casino has been a source of speculation since its opening in an old shopping mall in 2014. Named Best Sunshine Live at the time, the casino was designed to lure Chinese high rollers to a casino in territories belonging to the United States — a safe jurisdiction. Saipan, an island of 50,000 people closer to China than Hawaii, is a part of the Northern Mariana Islands, which have been administered by the U.S. authorities since the latter stages of World War II.
Imperial Pacific Holdings Casino Venture
Imperial Pacific Holdings originally was named First Natural Food Holdings, but was renamed in 2014. The company’s founder, Yeung Chung-lung, was charged by Chinese authorities with embezzlement.
Eventually, Cui Lijie and her son, Ji Xiaobo, became the owners of Imperial Pacific Holdings back in Hong Kong. They were the financial backers of the Best Sunshine Live casino, which was founded by Mark Brown, a former member of the Trump Organization who once helped Donald Trump run his casino empire.
Best Sunshine Live’s Advisory Board
The original Best Sunshine Live casino had good connections. Under Mark Brown’s leadership, Best Sunshine Live had an advisory board which read like a who’s who of American politics. One member of the advisory board was James Woolsey, former director of the CIA and onetime national-security adviser to Donald Trump’s presidential campaign. It also included former FBI director Louis Freeh.
Ed Rendell, a former governor of Pennsylvania and ex-chairman of Democratic National Committee chairman, sat on the council. So did Haley Barbour, former governor of Mississippi and ex-chairman of the Republican National Committee chairman. Ed Rendell said in an interview he was paid $5,000 a month to advise the project on American political and legal matters, but otherwise knew little about the business.
March 2017 FBI Raid
Such high-tone consultants did not protect Best Sunshine Live from a March 2017 raid by US authorities. By that time, work on a permanent casino-resort was nearing completion. On March 23, 2017, a worker fell from scaffolding and died while the Imperial Pacific Casino was being completed.
This led to a raid by the FBI to the work site, because of allegations that Imperial Pacific was using Chinese nationals who had been shipped to Saipan illegally for the construction of the casino. Despite the raid, the new casino-resort had its soft opening in June 2017.
$2 Billion in Revenues (Not Turnover)
By that time, Best Sunshine Live/Imperial Pacific Casino had received months of press about its high revenues. According to one 2016 report, Best Sunshine Live had generated $2 billion of revenues in one year’s time.
It was hard to verify those reports, especially because much of the revenue appeared to be on paper. Best Sunshine Live issued a form of casino credit called “markers”, which US casinos use and Chinese casinos (in Macau) do not. Markers are a kind of IOU that high rollers sign to the casinos. In many parts of the USA, gamblers who play for $10,000 or more qualify for markers.
Best Sunshine Live Casino Markers
The problem in Saipan is many of the Chinese high rollers went back home to China and never paid back their casino credit. Chinese mainland courts do not force players to pay back casino credit, which is why Macau casinos never allowed markers.
Instead, they developed a system of junket operators — third party trip organizers who provided credit to VIP high rollers. Junket operators allegedly used Chinese organized crime (triads) to force high rollers to pay back their gambling loans, which is why the junket operator industry collapsed in the wake of Xi Jinping’s anti-corruption crackdown in Macau in late-2014 and 2015.
Because Best Sunshine Live could not force many of its customers to pay back their IOUs, Cui Lijie is said to have had to lent the business $100 million at one point to keep it afloat. Due either to the casino’s financial troubles or its raid by the FBI, Imperial Pacific Holdings Ltd. came under new leadership in August 2017: Henry Cheang.
Henry Cheang Denies Wrongdoing
Henry Cheang is the current CEO of Imperial Pacific. He denies wrongdoing, but also denies knowing of an FBI raid on Imperial Pacific Casino last week. No details have emerged about the raid, as an anonymous source gave Bloomberg News the scant details which have been published at the moment. Whether the raid has to do with illegal immigrant workers or financial wrongdoing is unknown, but BOC will report on those details as they emerge.