Casino commission tells IPI: Answer FinCEN or casino will die

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THE newly appointed chairman of the Commonwealth Casino Commission, Edward C. Deleon Guerrero, on Thursday told Imperial Pacific International to promptly respond to the request of Financial Crimes Enforcement Network for information related to possible violations of the Bank Secrecy Act.

“There are two ways that this industry will quickly die. One, violate FinCEN regulations, and two, don’t pay your vendors. If those two occur, you are on an absolute cliff,” Deleon Guerrero told the officials of IPI who attended the meeting of the commission at the office of the casino regulatory body in Gualo Rai.

FinCEN is a bureau of the U.S Department of Treasury that probes domestic and international money laundering, terrorist financing, and other financial crimes.

IPI Holdings Limited, the parent company of IPI, reported in its “Annual Results for the Year Ended 31 December 2019” that on March 4, FinCEN requested IPI to provide certain information and documents relevant to compliance with regulatory requirements from October 2016 through the present.

FinCEN indicated in the letter that there were apparent violations of the Bank Secrecy Act and its implementing regulations, and the agency is considering whether to impose civil money penalties or to take additional enforcement action against IPI.

The IPI Holdings report stated that “as of the date of issuance of this results announcement, IPI is still in the process of preparing for the information to be submitted to FinCEN.”

The Commonwealth Casino Commission holds its regular meeting in the conference room of its office on Thursday. Photo by Emmanuel T. Erediano

“You do not have any [other] option but to immediately respond to FinCEN,” Deleon Guerrero told the IPI officials on Thursday. “I don’t know if you know much about FinCEN and its operations. You do not have the luxury to wait.”

Deleon Guerrero said IPI must immediately allocate every available resources to resolve the issue, otherwise “the entire gaming industry is moot.”

Deleon Guerrero also asked IPI officials to “shed some light on what’s going on with allegations that IPI is not in compliance with labor laws, not in compliance with tax laws, and not in compliance with casino license agreement.”

None of the IPI officials present commented on the issues. They included vice president for construction Eric Poon, vice president for public affairs Tao Xing, and human resources director Redie Dela Cruz.

IPI still has no chief executive officer, which is also a cause for concern, Deleon Guerrero said.

The IPI board of directors, he added, needs to understand that these issues, include the employee housing units disconnected by the Commonwealth Utilities Corp. because of the failure of IPI to pay its utility bills must be addressed immediately.

“We need some leadership as to who is responsible for IPI,” Deleon Guerrero said. “The casino license is for gaming and non-gaming so the issue of construction is [also] very much part of the agreement…. But I think enough is enough. If you cannot make up your mind, guess what’s coming. You might be surprised,” Deleon Guerrero told the IPI officials.

Rep. Tina Sablan, who attended the meeting via videoconference, reiterated her concerns about the living conditions of IPI employees at the staff houses whose power supply was disconnected by CUC. She said IPI has the obligation to rectify the situation immediately.

To the casino commissioners, she added, “All these issues really speak [about] IPI’s doubtful financial viability. If the casino operator can’t even pay their CUC bills, I wonder what financial capacity IPI has in complying with the license agreement.”

Sablan wants to know what IPI is doing to address the issues facing the casino operator, which, she added, is not able to meet its basic financial obligations including those owed to vendors, payroll, arrears with the Department of Public Lands for land lease payment, and the $15 million annual license fee, “not to mention the community benefit fund that IPI is required to contribute to the community.”

Sablan asked the commissioners, “Where do we go from here?”

The lone casino, she said, “is clearly a failing venture and you have the duty, obligation, and responsibility to regulate and ensure compliance in the interest of the Commonwealth.”

As the casino licensee “is clearly failing to meet its obligations,” she added, “at what point do we say enough is enough?”

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