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Gaming Guru

Jeff German
 

International Mob-connected ring linked to illegal World Cup betting at Caesars

15 July 2014

LAS VEGAS -- An FBI-led raid has shut down a multimillion-dollar illegal sports betting operation at Caesars Palace that authorities say was run by Malaysian and Chinese nationals who were taking wagers on the World Cup soccer tournament.

Authorities have linked one of the ringleaders, Paul Phua, to a well-known Chinese crime syndicate.

Phua, 50, a prominent poker player and wealthy Malaysian businessman, and his son Darren Wai Kit Phua, 22, were among eight people arrested by FBI agents over the weekend.

In a criminal complaint unsealed Monday, Las Vegas FBI Agent Minh Pham said the elder Phua, who was charged under the name Wei Seng Phua, was “known by law enforcement to be a high-ranking member of the 14K Triad,” one of the largest criminal syndicates in the world. Hong Kong-based 14K Triad specializes in drug trafficking and traditional forms of criminal activity, including illegal gambling, prostitution and loan sharking.

Assistant U.S. Attorney Kimberly Frayn said in court that Phua told authorities after his arrest he was worth $300 million to $400 million, and she sought to keep both Phuas behind bars, saying they were threats to flee.

But the elder Phua’s Las Vegas lawyer, David Chesnoff, denied in court late Monday that Phua was linked to organized crime and said Phua was prepared to vigorously fight the charges.

“This is a very sophisticated, intelligent individual who wants to defend himself,” Chesnoff said.

U.S. Magistrate Judge Bill Hoffman ordered both the father and son released from custody with several restrictions.

Hoffman ordered Paul Phua to put up $2 million bail along with his $48 million private jet as collateral. Darren Phua was ordered to post $500,000 bail with the jet also as collateral. Both defendants were ordered to stay on home detention with electronic monitoring in the third-party custody of a Las Vegas physician who befriended the elder Phua in the poker community.

Chesnoff said members of the poker community, including well-known player Andrew Robl, were gathering assets to help with Phua’s bail. Robl was prepared to put up $1.5 million, Chesnoff said.

Frayn, without citing names, said a number of Phua’s poker associates may have been involved in illegal activity uncovered by the FBI investigation.

Phua and more than 20 other people were arrested June 18 in Macau for running a large gambling operation that took in hundreds of millions of dollars in illegal bets on the World Cup tournament, the Las Vegas FBI complaint alleged.

Last month, the South China Post in Hong Kong reported that police broke up an illegal betting ring at a Macau hotel involving roughly $645 million in wagers on the World Cup, including a single wager of $51.5 million. The hotel was not named in news reports.

Caesars Palace was not a target of the Las Vegas investigation and cooperated with authorities.

The Nevada State Gaming Control Board and the U.S. Department of Homeland Security assisted the FBI in a raid last week at the Strip resort. It was unclear how much money the illegal bookmaking ring took in here.

Gaming Control Board Chairman A.G. Burnett declined comment other than to say the agency cooperated with the FBI.

Caesars Palace officials also declined comment.

All eight defendants were each charged with one count of illegal transmission of wagering information and one count of operating an illegal gambling business, both felonies. They made initial appearances Monday in Hoffman’s courtroom.

Two defendants, Seng Chen Yong, 56, and his son, Wai Kin Yong, 22, both of Malaysia, were ordered detained as flight risks. Frayn described the elder Yong as another one of the ringleaders of the international betting operation. She also said he was well-known in the poker community.

Another defendant, Hui Tang, 44, of China, also was ordered to stay in custody. Detention hearings for three other defendants, Yan Zhang, 40; Yung Keung Fan, 46; and Herman Chun Sang Yeung, 36, all of Hong Kong, were delayed until later in the week.

Paul Phua, a frequent visitor at Las Vegas poker tables, in 2012, he played in the “Big One for One Drop,” a $1 million buy-in event that also served as a charitable fundraiser for the One Drop water awareness foundation.

According to World Series of Poker press material, Phua is “a big league investment banker from China who is one of the driving forces behind the nosebleed cash games in Macau.” Phua did not play in the current World Series of Poker at the Rio, which was to conclude Monday.

In 2011, Phua played at the Aussie Millions tournament in Australia.

The illegal betting ring is alleged to have accepted wagers on the World Cup inside Caesars Palace. The arrests, however, took place at other Strip resorts after the ring was broken up and the operators were kicked out of Caesars Palace.

Following his arrest in Macau, Phua was released on bail and flew to Las Vegas on his private jet, where he and his associates are alleged to have resumed their illegal gambling at Caesars Palace, the complaint alleged.

The group reserved three high-roller villas at the Strip resort and at their request were provided with an “unusually large amount of electronics equipment and technical support.”

After Caesars technicians tipped off authorities, undercover FBI agents posed as electrical and computer experts and were able to see first-hand the high-tech, illegal gambling operation, the complaint alleged.

Federal search warrants were executed last Wednesday at the three Caesars Palace villas, the complaint said.

Nevada sports books accepted wagers on the month-long World Cup, but the betting activity was not expected to rise to levels casinos can see during such events as the Super Bowl or the NCAA Basketball Championships.

Wagering on the World Cup by Macau high-rollers was blamed for the region’s first monthly gaming revenue decline in more than four years. Analysts said gamblers wagered on soccer rather than baccarat.

The illegal sports betting market siphoned off bets that could have been placed with the Hong Kong Jockey Club, which has a government-mandated monopoly on sports and racetrack wagering.

Gaming sources said there wasn’t evidence that operators of the illegal gambling ring were using Caesars Palace to make “lay-off” wagers on the soccer games to minimize their risk.