A lawsuit against casino mogul Sheldon Adelson which touches on accusations of graft and organized crime will be heard in the United States, a Las Vegas judge ruled on Friday.
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Adelson owns the Israel Hayom newspaper in Israel and is a key supporter of Prime Minister Benjamin Netanyahu. He is also a major contributor to the U.S. Republican party.
Steven Jacobs, former CEO of Adelson’s highly profitable casinos in the Chinese enclave of Macau, is suing Adelson's Las Vegas Sands conglomerate, claiming that he was sacked for trying to break links to organized crime groups, the triads, and for attempting to halt alleged influence peddling with Chinese officials.
Information from Jacobs prompted investigations by the United States Justice Department and federal financial regulators. If the allegations are shown to be true, Adelson’s gambling licenses could be in jeopardy.
A Las Vegas court hearing was called to decide whether the full case should be heard in the U.S. or in Macau. The company had argued that the case against Sands China should take place in China where its operations are based, if anywhere.
Adelson, the current chairman and CEO of Sands China, attempted during testimony to distance himself from the company at the time in question, 2009 and 2010, saying he was several thousand miles away and couldn't possibly control day-to-day operations.
But Clark County District Court Judge Elizabeth Gonzalez said that "Adelson and (Las Vegas Sands') control over (Sands China) goes far beyond the ordinary relationship of parent and subsidiary." Ultimately, Adelson made all the decisions, big and little, when it came to Sands China, she said, and thus the case can stay in Nevada.
With Friday's ruling, Adelson will face some difficult questions raised by his testimony in the hearing, the Guardian reported.
Many of the allegations concern the Hong Kong-born leader of the Wo Hop To triad Cheung Chi Tai, who is barred from entering the U.S. due to his “affiliation to organized crime.”
Adelson repeatedly told the court that his company “was not doing business” with Cheung, testimony that directly contradicted the evidence of his own deputy on the witness stand.
A Sands internal document indicated that Cheung was admitted to the casino’s exclusive Chairman’s Club, which normally comes with a personal letter from Adelson. Among the benefits are “extremely large lines of credit,” according to court records filed by Jacobs.
Las Vegas Sands finally broke with Cheung in 2010 following a Reuters report identifying his triad links.
In any future trial, he is likely to face questions as to why Las Vegas Sands waited until the Reuters report to act when Jacobs has said in court submissions that “those ties were well known to Adelson, well before the Reuters’ article.”
Adelson is also likely to be questioned about his relationship with Macau lawyer and legislator, Leonel Alves, whom he paid $700,000 in legal fees, the Guardian reported. This sum, far above the normal rates for legal services, could be in violation of U.S. law, as it could be considered graft. According to the Guardian, though Jacobs terminated the contract with Alves following the company's lawyers advice, Adelson rehired him.