An in-depth investigation by CNN has revealed how wealthy Chinese gamblers, aided by criminal intermediaries, laundered millions in cash at high-stakes casinos in Las Vegas.
At the heart of the scandal is Wynn Las Vegas, which has since paid $130 million in a settlement with the US government, CNN reports on its website.
Criminal networks used gamblers as a conduit
The case revolves around Lei Zhang, who was caught in 2019 with a bag full of cash. According to federal agents, he worked as an intermediary for Chinese gamblers who wanted to wager large sums of money in casinos such as Wynn. That money did not come from nowhere: it originated from Mexican drug cartels and prostitution networks.
China only allows its citizens to transfer limited amounts of money abroad. This created an illegal circuit in which cartel money was bought up in the US and repaid in China via shady, unsupervised routes.
Wynn employees played a role in handovers
Some Wynn employees allegedly facilitated cash transactions in hotel rooms, bathrooms and even vehicles. The company subsequently acknowledged serious shortcomings in its control measures and dismissed the staff involved.
Wynn reached a deal without criminal prosecution, but paid $5.5 million to state regulators in addition to the federal fine. The four main suspects – Zhang, Han, Zhou and Wang – received sentences of up to 15 months in prison and had to forfeit thousands of dollars.
The case showed how cartels were able to convert their drug money into legal bank balances, while gamblers got quick cash and casinos kept their VIP customers happy. However, investigators warned that this system encouraged criminal activity and weakened American society.
This case bears a strong resemblance to how chip exchanges in Las Vegas were used for similar practices.The growth of money flows from China to American gambling halls also raises questions about why Las Vegas has become a mecca for gamblers for risky transactions and shady deals.