Global Gaming’s lawsuit against Razon riddled with intrigue By John L. Smith, CDC Gaming Reports May 6, 2021 at 7:00 pm When Las Vegas-based Global Gaming Asset Management (GGAM) in late March took its pursuit of the Philippines’ second-richest man to the U.S District Court of the Southern District of New York, it was only a matter of time before its lawsuit began to reverberate through the casino industry. Beyond the breaking news and the ugly allegations contained in the litigation, it is a reminder of the big profits and potential pitfalls inherent in the international gaming market. Led by former Las Vegas Sands President and Chief Operating Officer William Weidner, GGAM is a casino development and management company and a subsidiary of Cantor Fitzgerald. It once had Bloomberry Resorts and its wealthy chairman Enrique Razon under contract to manage the Solaire Resort and Casino in Entertainment City, Manila. Former Las Vegas Sands President William Weidner The arrangement appeared to be profitable for both parties. GGAM bought an equity stake in the casino resort project. When that contract was terminated in 2011, the fireworks began. GGAM sued Bloomberry and Razon for millions in unpaid fees and eventually was awarded nearly $300 million by an arbitration tribunal in Singapore. Razon has appealed and countered that the Philippines is the proper legal venue. It now appears his lawyers will have to make that argument in New York. Razon is accused in the current lawsuit of pushing out GGAM following Solaire’s successful 2013 opening and using “his personal relationships in the Philippine stock market to unlawfully prevent GGAM from selling its equity interest in the project – an obstructive effort that continues to this day.” He’s also accused of hiding assets through a network of shell companies. Some of those assets are in the United States. There’s much at stake for Bloomberry and Razon, but in this game, the risks aren’t limited to one side. Bloomberry attorneys aren’t shy about reminding the court in filings of GGAM management’s own history in Asia – especially Macau, where Weidner once held a senior position for Las Vegas Sands. The protracted litigations have produced an investigative analysis by Spectrum Gaming Group that paints an ugly reminder that the impressive Sands Macau success story came at a cost. Written in 2017, the report by Spectrum’s Fredric Gushin and Daniel Reeves raises issues about GGAM and Weidner’s business practices in the time leading up to the termination of the Solaire contract. “These issues included repeating various wrongful conduct that led to serious fines being imposed by the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) on Las Vegas Sands Corp. (LVS) for willful violations of the Foreign Corrupt Practices Act during the time Weidner served as President and COO,” the report summarizes. “…During his tenure as COO with LVS, Weidner was also the senior executive that oversaw LVS’s Macau operations, the time during which the DOJ and the SEC investigated certain conduct and practices that took place in Macau that resulted in cumulative fines of almost $16 million being assessed against LVS.” In a 2016 Cease and Desist Order to Las Vegas Sands, the SEC outlined failures by the company to “develop and maintain a reasonable system of internal accounting controls over its operations in China and Macau” during Weidner’s tenure. The SEC investigation found more than $62 million was improperly transferred from the company to a Chinese consultant. In 2017, Las Vegas Sands agreed to pay millions in penalties to settle the charges that it had willfully violated the Foreign Corrupt Practices Act. The report accuses Weidner and GGAM President for Asia Eric Chiu, a former Las Vegas Sands President of Asian Development, of being directly involved in the “conduct and decision-making that have been enumerated in the SEC and DOJ settlements.” It also outlines a pattern of activity that “proposed to repeat much of the same conduct at Solaire” that had placed Las Vegas Sands in big trouble. Weidner has vehemently denied any involvement in wrongful conduct and was never separately sanctioned by the government. In a 2012 written statement to Bloomberry officials, he denied any involvement in the conduct under investigation. The report paints a far more damning picture, calling his answers “untruthful and incomplete.” The report also offers a stinging reminder of the scandal surrounding the Las Vegas Sands’ favorite high-rolling gambler Zhenli Ye Gon, a Chinese-Mexican businessman linked to the Sinaloa drug cartel. Ye Gon gambled millions at the Venetian in Las Vegas and other casinos and was known as the largest all-cash customer. But the failure of Las Vegas Sands to follow established rules led to the company paying $47 million as part of a non-prosecution agreement with the U.S. Attorney’s Office to settle federal charges. As both sides trade body blows in the Southern District of New York, the sound promises to reverberate widely. John L. Smith is a longtime Las Vegas columnist and author. Contact him at email@example.com On Twitter: @jlnevadasmith.