Federal law enforcement agencies, including the FBI and the IRS, have reportedly uncovered a money-laundering scheme that involves political figures and the holder of the only gaming license in the Commonwealth of the Northern Mariana Islands (CNMI), Imperial Pacific International (IPI).
The U.S. Attorney’s Office in December filed a complaint for forfeiture with the U.S. District Court. It seeks more than $310,000 that the court had seized earlier from a Bank of Saipan account in the name of “MCS.” It called this money “defendant funds.”
Allegedly, the federal agencies discovered a long-term scheme to escape taxes through money laundering and wire evasion. It involved CNMI political figures and IPI through its consultant, MCS.
The complaint spells out how MCS was involved in money laundering and wire schemes. It notes the involvement of what the complaint identifies as the company that was awarded the exclusive gaming license, which could only be IPI.
According to the complaint, “In the first scheme, defendant funds were transferred in a way that was necessary to enable fraud upon a government regulatory authority, namely the Commonwealth Casino Commission. In the second scheme, defendant funds were part of and necessary to a long-running and expansive effort to improperly influence government officials for the purpose of obtaining preferential treatment. Finally, A.Y. and MCS used defendant funds to claim false expenses, thus fraudulently reducing tax liability to the CNMI.”
The company in the complaint established relationships with local political figures by flying them around in private jets to foreign lands. Later, in 2014, the CNMI legislature voted to grant an exclusive gaming license to IPI on Saipan.
The complaint notes that “One of the political figures on the foreign trips played an integral role in passage of the casino enabling legislation.”
Before it received the exclusive license the company was paying A.Y. and MCS, which had served as a consultant, about $5,000 a month. Over a five-year period they received more than $2 million.
The complaint also notes that the company through MCS contributed over $46,000 to local political candidates, who failed to disclose the contributions. CNMI government officials are barred from accepting non-monetary gifts valued at more than $50.
The complaint also alleges that CNMI was defrauded of tax revenues through false statements and omissions.
In a separate but related development, Imperial Pacific International is struggling to protect its assets on Saipan on the uncompleted casino it owns.
According to IPI’s human resource partner How Yo Chi, IPI only has five security guards to protect its property. Recently its senior HR adviser resigned, leaving that job to Chi.
Recently, Chi spoke to the Commonwealth Casino Commission to answer questions. He noted that IPI payroll is now five security guards and six administrative staff.
The commission told Chi he needs to protect the unfinished resort hotel and casino from burglars. The property has been burglarized twice in recent weeks with tools and copper wire taken.
Chi said the best he could do is maintain 24-hour security with the five guards. Meanwhile the company is giving tours to potential investors interested in purchasing the property.
