Las Vegas Sands Pays $7 Million Penalty to Resolve Criminal FCPA Charges

On January 17, Nevada-based gaming and resort company Las Vegas Sands Corp. agreed to pay the DOJ nearly $7 million to resolve FCPA charges with a non-prosecution agreement (NPA) in connection with payments from 2006 to 2009 totaling almost $6 million to a business consultant to promote its brand in China and Macau.  Sands admitted that the payments were made “without any discernable legitimate business purpose,” that its executives had knowingly and willfully failed to implement adequate internal accounting controls to ensure that the payments were legitimate, and that it failed to prevent the false recording of those payments in its books and records, continued to make the payments even after warnings from its finance staff and an outside auditor, and terminated the finance department employee who raised those concerns.

The $7 million criminal penalty is a 25-percent discount from the bottom of the U.S. Sentencing Guidelines fine range.  In announcing the NPA, the DOJ credited Sands for its full cooperation in the investigation, including conducting a thorough internal investigation and voluntarily providing evidence and information to the DOJ, and its extensive remedial measures, including expanding its compliance and audit programs and making significant personnel changes.  The DOJ found particularly notable that Sands no longer employs or is affiliated with any of the individuals implicated in the investigation and hired a new general counsel and new heads of its internal audit and compliance functions.

In an unusual move, the DOJ’s announcement comes several months after Sands resolved similar FCPA claims with the SEC in related proceedings last April.  There the SEC filed a cease and desist order against Sands and the company agreed to pay a civil penalty of approximately $9 million.  The SEC alleged that Sands violated the FCPA’s internal controls and books and records provisions in connection with more than $62 million in payments to a consultant operating in China and Macau who did not properly document how the money was used.  Sands had consented to the SEC’s order without admitting or denying the charges.  Previous FCPA Scorecard coverage of the Sands SEC settlement can be found here.