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The High Court Of Singapore Catches On To The Facade Of FCPA Enforcement


As highlighted in prior posts here and here, in April 2016 Las Vegas Sands (LVS) paid $9 million to resolve an SEC Foreign Corrupt Practices Act enforcement action finding violations of the books and records and internal controls provisions concerning various conduct in China.

As highlighted here, in January 2017 the DOJ brought a related action in which LVS paid $7 million pursuant to a non-prosecution agreement. As highlighted in the prior post, it was an usual development because FCPA enforcement actions against issuers involving a DOJ and SEC component are nearly always resolved on the same day. Adding to the intrigue, the enforcement action was brought during the final hours of the Obama administration while LVS CEO Sheldon Adelson (a major Republican contributor) was in Washington D.C. for President Trump’s inauguration.

Recently, the High Court of Singapore (pictured) issued this decision in the context of an arbitration dispute. As highlighted below, the High Court of Singapore dives deep into the LVS enforcement action and concludes, from an evidentiary standpoint, that the FCPA findings have a low degree of reliability and were agreed to by LVS against the backdrop of incentives that diminishes their overall weight. In other words, the High Court of Singapore caught on to the “facade of FCPA enforcement” (see here for the article).

The Singapore decision is also interesting because it involved, as dueling experts, Peter Clark (former DOJ FCPA Unit) and Philip Urofosky (former Assistant Chief of the DOJ Fraud section who worked extensively on FCPA matters).

The 103 page decision is dense on facts, but the gist is as follows.

Bloomberry Resorts and Hotels Inc. (“Bloomberry”), and Sureste Properties, Inc (“Sureste”)(together the Plaintiffs) are the owners of the Solaire Resort & Casino (“Solaire”), a luxury hotel and gaming resort located in Manila, Philippines. The Plaintiffs and Global Gaming Philippines LLC (“GGAM”) and GGAM Netherlands B.V. (GGAM Netherlands)(together the Defendants) entered into a Management Services Agreement in 2011 “to provide management and technical services in the development and construction, and to manage the operation of” Solaire for a period of 10 years.”

In the arbitration, the plaintiffs sought to terminate the MSA claiming that there was fraud or misrepresentation by the defendants in relation to the MSA. In a 2016 arbitration decision, a tribunal decided that there was no causal fraud or misrepresentation by the defendants in relation to the MSA and that the termination of the MSA was not justified and constituted a breach of the MSA.

Thereafter, the plaintiffs asserted that there was evidence of fraud and/or corruption that was not discoverable until after the 2016 arbitration. Specifically, the plaintiffs asserted that the 2016 SEC enforcement action against Las Vegas Sands and the 2017 DOJ enforcement action against Las Vegas Sands (collectively referred to as the “FCPA Findings”) represented “new” evidence of fraud.

The link between the arbitration and the Las Vegas Sands FCPA enforcement action is that William Weidner and Eric Chiu (executives of the GGAM entities) were directors of Las Vegas Sands during the time period relevant to the FCPA enforcement action.

According to the Singapore court:

“It is undisputed that the “LVSC President and Chief Operating Officer” mentioned in the SEC Order and the “Sands Executive 1” in the DOJ Agreement refers to Mr Weidner. It is also undisputed that the “VML Executive” in the DOJ Agreement and the “LVS President of Asian Development” in the SEC Order refers to Mr Chiu.”

After reviewing the specifics of the SEC and DOJ enforcement actions, the judge stated:

“An interesting aspect of this case is the new evidence argument …. The FCPA Findings represent the new evidence that was not in existence at the time of the Arbitration. In my view, the new evidence of fraud needs to be admitted; if it is incontrovertible, the new evidence of fraud could be “accepted” in the interest of saving time and costs. In this case, the defendants did not challenge the FCPA Findings on admissibility. Instead, the dispute was over what the FCPA Findings said and their effects.”

Although the judge found other aspects of the plaintiffs’ arguments lacking, and thus was not required to reviewing the FCPA findings, the judge nevertheless did conclude that “the FCPA Findings do not satisfy the materiality requirement: they do not constitute material information that would substantially impact the making of the Partial Award or information so material that earlier discovery of it would have prompted the Tribunal to rule in favour of the plaintiffs.”

The opinion states:

“Whether the FCPA Findings constitute evidence of actual fraud

The foundation of the plaintiffs’ arguments on the relevance and materiality of the FCPA Findings is that they show that Mr Weidner and Mr Chiu deployed the same strategies in Solaire for driving foreign VIPs and junkets which they had used while they were at LVS.

This allegation warrants closer examination of the FCPA Findings. In this regard, I start by considering the expert evidence on the evidential significance and value of the FCPA Findings.

In relation to LVS

In summary, the plaintiffs’ expert, Mr Peter Clark (“Mr Clark”), the former special counsel in the SEC’s Division of Enforcement and the former Deputy Chief of the DOJ’s Criminal Division, Fraud Section, attempted to make much of the FCPA Findings. Mr Clark opines that the FCPA Findings indicate “a high probability that Mr Weidner and Mr Chiu were directly implicated in the conduct which formed the basis of the [FCPA Findings]” and that they “indicate a high probability that the actions of Mr Weidner and Mr Chiu were in possible violation of the Anti-Bribery Provisions of the FCPA.”

On the other hand, the defendants’ expert, Mr Philip Urofsky (“Mr Urofsky”), the former Assistant Chief of the DOJ’s Criminal Division Fraud Section, is of the opposite view. Mr Urofsky’s report states that the FCPA Findings do not contain any findings by the DOJ or the SEC that either Mr Weidner or Mr Chiu violated the FCPA, and the FCPA Findings do not contain any findings of bribery by LVS, Mr Weidner or Mr Chiu for the following related reasons:

(a) First, the FCPA Findings are derived from negotiated agreements containing allegations based on the DOJ and SEC’s inferences and extrapolations from the evidence.

(b) Second, there are no findings by a court or independent tribunal on the appropriateness or sufficiency of evidence of the allegations in the FCPA Findings.

(c) Third, Mr Weidner and Mr Chiu had no opportunity to contest the allegations in the FCPA Findings as they were not parties to the negotiated agreements.

(d) Fourth, there was no conclusion made from the FCPA Findings that bribes had been paid by LVS.

(e) Fifth, no public accusations were made or charges were filed by the US government authorities against Mr Weidner or Mr Chiu.

I am of the view that, on a balance of probabilities, the FCPA Findings do not prove that Mr Weidner and Mr Chiu bribed Chinese government officials and state-owned entities while they were with LVS (much less in Solaire). At its highest, the FCPA Findings implicate Mr Weidner and Mr Chiu in the conduct of three transactions, pertaining to LVS’ violations of the FCPA Accounting Provisions but not the Anti-Bribery provisions. Consequently, I find that there is no sufficient degree of connection between the alleged fraud by the defendants and the Partial Award. I say this for a number of reasons.

As a preliminary point, it is apposite to recall that in the SEC Order, LVS settled the matter “without admitting or denying the findings herein.” Thus, the significance of the SEC Order is that LVS cannot challenge the alleged facts in any proceedings brought by SEC but it can do so in a proceeding brought by a party other than the SEC. This is contrasted with the DOJ Agreement where LVS admitted that the alleged facts in the Statement of Facts “are true and accurate”. The DOJ Agreement is a non-prosecution agreement between the US government and the LVS, whereby LVS agrees to pay a financial penalty, undertake remedial measures and admits to stipulated facts. In return, the US government does not file any formal charging instrument in court.

Turning to the reasons proper, the first reason has to do with the inherent evidential issues with the FCPA Findings. Both sides argued on the weight of the FCPA Findings. I accept Mr Urofsky’s point that the statements in the FCPA Findings are of “much lower degree of reliability than those that would be established through traditional adversarial proceedings in open court.” The SEC Order and the DOJ Agreement are both negotiated documents between the US government and LVS that contain allegations based on the US government’s view of the evidence, including its inferences and extrapolations from the evidence. The findings itself were not placed before a court, an independent tribunal or fact-finder to evaluate the sufficiency of underlying evidence or its appropriateness. I also note that Mr Weidner and Mr Chiu were not parties to the FCPA Findings and to that extent, had no participation in the negotiations between LVS and the authorities that resulted in the documents.

Secondly, no charges were brought by the DOJ or administrative actions brought by the SEC against Mr Weidner and Mr Chiu, in particular under the Anti-Bribery Provisions of the FCPA. As noted by Mr Urofsky, the statutory limitation period for filing charges against both Mr Weidner and Mr Chiu lapsed at the end of 2017 for the alleged conduct that occurred between 2006 and 2009.


Mr Weidner and Mr Chiu were neither charged by the DOJ nor were administrative actions brought against them by the SEC. The FCPA Findings are only negotiated agreements that cannot, by themselves, be elevated to factual findings of bribery by Mr Weidner and Mr Chiu in LVS. The absence of any charge is notable given the DOJ’s emphasis on the prosecution of culpable individuals. The following excerpt from the Principles of Federal Prosecution of Business Organisations issued by the DOJ was highlighted to me in this regard:

58 9-28.210 – Focus on Individual Wrongdoers A. General Principle: Prosecution of a corporation is not a substitute for the prosecution of criminally culpable individuals within or without the corporation. Because a corporation can act only through individuals, imposition of individual criminal liability may provide the strongest deterrent against future corporate wrongdoing. Proving individual culpability should be pursued, particularly if it relates to high-level corporate officers, even in the face of an offer of a corporate guilty plea or some other disposition of the charges against the corporation, including a deferred prosecution or non-prosecution agreement, or a civil resolution. … [emphasis added]

This coheres with the guidance on individual accountability for corporate wrongdoing published by the DOJ, which is referred to as the “Yates Memo.”

[General discussion of Yates Memo followed]

Assuming arguendo that Mr Weidner and Mr Chiu are guilty of bribery, it should follow in the light of the DOJ’s policy that prosecution would generally be pursued notwithstanding that a non-prosecution agreement is reached between LVS and DOJ. The absence of charges or administrative actions brought (by either the DOJ or SEC) militates against any finding of bribery or corruption on the part of the defendants’ directors.

Thirdly, it is uncontroverted that in their investigation of LVS, the SEC and DOJ only alleged violations of the Accounting Provisions, not the AntiBribery Provisions.


Plainly, the offences are characterised [by the SEC and DOJ] as an internal accounting failure. While there are some references to bribery (“a region known to be high risk for corruption” and “environment where significant bribery risks were present”), nowhere in the FCPA Findings is it stated that LVS or its directors themselves were directly involved in bribery. That LVS operated in those settings is simply too flimsy a basis for a finding of fraud which is a serious allegation.

Fourth, the circumstances surrounding the production of the FCPA Findings also diminishes its evidential value for the purposes of the present proceedings. I say this for two inter-related reasons.

It cannot be denied that on a systemic and practical level, there are various incentives available to LVS for entering into such agreements with the DOJ and SEC. In this regard, Mr Urofsky’s evidence is that a corporation that is intent on settlement (as opposed to litigation) would generally have very little or no incentive to contest the factual assertions contained in the FCPA Findings. It would likewise have little incentive to seek and include contrary or exculpatory evidence concerning the conduct under investigation.

I am inclined to accept Mr Urofsky’s evidence. A party may seek to settle a dispute for any number of reasons which do not relate to his legal liabilities or his views of them. […].

The DOJ for one offers considerable incentives to companies to cooperate and settle a variety of regulatory infringements instead of litigating issues of fact and liability. In the present case, LVS received a 25% discount off the bottom of the US Sentencing Guidelines range for the monetary penalty imposed on it, as stated explicitly in the DOJ Agreement. As noted from the Yates Memo earlier, in order for a company to qualify for any cooperation credit, corporations must provide facts relating to the employees and executives responsible for the misconduct. Had LVS not cooperated, it would likely face harsher penalties and often a more severe form of resolution, including the filing of formal charges, which for companies in regulated industries such as gaming, could result in adverse collateral consequences from regulators separate from the enforcement proceedings.

I should caveat that this is not to say that the integrity of the assertions set out in the FCPA Findings involving LVS are necessarily in doubt since there is admittedly no direct evidence of the effect of the practical incentives on LVS. Such evidence is in any case, I am inclined to think, generally difficult to procure. Rather, I consider that the existence of such incentives is one relevant consideration that diminishes the overall weight to be ascribed to the FCPA Findings in general, especially when they are being relied upon as evidence of fraud.

The factual circumstances vis-à-vis Mr Weidner and LVS in particular should also be taken into account. It is not disputed that Mr Weidner resigned from LVS in March 2009 after an acrimonious dispute with LVS’ Chairman and CEO, Mr Sheldon Adelson, and certain directors over the financing, management and direction of the company. Mr Weidner’s departure was a “highly publicized split” which was reported in the news. This is corroborated by his letter of resignation from LVS dated 8 March 2009, where his reasons for resignation referred to “outstanding differences with the Chairman and the Chief Executive Officer about the management of the Company” as well as his first statement given on 15 August 2012 to the plaintiffs, where he stated that “I had serious disagreements and concerns with company leadership, which I voiced to the board and ultimately led to my decision to resign.” When considered with the earlier point about the availability of incentives to LVS in the context of investigations by the SEC and DOJ, some caution must be taken in according undue weight to the FCPA Findings.

I hasten to add that none of the above should be construed as deprecating the quality of the SEC Order or DOJ Agreement in and of themselves. The present enquiry is a specific one that is concerned with assessing their particular relevance for the purposes of imputing actual fraud on the defendants, which the plaintiffs seek to do herein. Cogent and compelling evidence is needed to make good an allegation of fraud or dishonesty. On a holistic assessment of the nature and evidential value of the FCPA Findings, noting in particular that the FCPA Anti-Bribery Provisions were not breached and the fact that neither prosecution nor administrative action were initiated against Mr Weidner and Mr Chiu, I find that the plaintiffs have not discharged their burden of proof that LVS or its directors (Mr Weidner and Mr Chiu) had bribed Chinese government officials and state-owned entities.”

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