FBI Links Money Laundering, Wire Fraud to Imperial Pacific, CNMI Politicos

Posted on: January 3, 2023, 06:19h. 

Last updated on: January 3, 2023, 02:35h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

A federal complaint that accuses a casino license holder in the Northern Marianas Islands (CNMI) of money laundering and wire fraud involving local political figures doesn’t directly name Imperial Pacific International (IPI). But since IPI is the only casino license holder in CNMI, a US unincorporated territory and commonwealth in the northwestern Pacific, the smart money is on the Hong Kong-based developer.

Imperial Pacific International
The Imperial Palace, IPI’s understated casino on Saipan, faces an uncertain future following the company’s financial meltdown and possible federal enforcement action. (Image: Bodu365)

IPI has been building a gaudy, rococo gaming palace — now paused — on CNMI’s biggest island, Saipan, since 2016. It’s a project beset by a grim catalog of labor violations, missed deadlines, and lawsuits. IPI has now run out of cash and owes more than $100 million to the Commonwealth Casino Commission (CCC) in licensing and regulatory fees.

Governor Raided

In November 2019, the FBI raided the home and offices of CNMI Governor Ralph Torres, as well as the offices of his brother’s law firm. A week later, IPI was ordered by the US Attorney’s Office to turn over all communication between the company and Torres.

Now, the US government has filed a complaint for forfeiture in the US District Court for the CNMI. The feds seized more than $300K from two local bank accounts under the name “MCS.”

The complaint says the FBI has uncovered a “suspected conspiracy by foreign entities and entities and individuals in the CNMI to commit wire fraud and money laundering,” as well as tax evasion. 

The owner of the MCS accounts is referred to only as “AY.” This is one of four individuals suspected of involvement in the scheme. Two are described as CNMI “political figures,” and two as partners in a CNMI business.

IPI, referred to as “the Company,” established a relationship with CNMI political figures in 2013, when the islands launched a bidding process for the casino license, according to the complaint. “The Company” did this, amongst other things, by showering them with foreign trips, including 13 to Hong Kong and Macau, and at least one to Singapore via private jet.

“Following the trips, the participating political figures joined other members of the 15 CNMI legislature to pass a bill which enabled an exclusive gaming license on a certain island within the CNMI,” asserts the complaint. “Months prior to receiving the license, in May 2014, the Company had already begun paying MCS and AY several thousand dollars per month.”

Sweet Deal

IPI got a pretty sweet deal when it was awarded the single Saipan casino license – a 25-year gaming monopoly — in return for paying the cash-strapped island a $15 million annual fee and a handful of other fixed payments. Unlike almost every other licensed commercial casino, it was not required to pay tax on revenue. The company had never built or operated a casino at this time.

IPI is controlled by mother-and-son Cui Lijie and Ji Xiaobo, former Macau junket operators.  In 2017, a temporary casino set up in a shopping mall to train dealers while the main property was being built, was generating $2 billion per month in revenues. Thanks to a stream of Chinese high rollers flown in by its owners, it was briefly the highest-grossing casino in the world.

But the high rollers soon dried up, and IPI was forced to write off hundreds of millions in unrecoverable bad debt. COVID-19 drove the final nail into the coffin of its business model.

The complaint for forfeiture could be a precursor to federal criminal proceedings against the “entities and individuals” it references.