Posted: Oct 6, 2021, 4:30 a.m.

Last update on: October 6, 2021, 4:30 a.m.

Filipino casino operator Bloomberry Resorts has asked a federal judge to order a U.S. gaming company to turn over documents it says could confirm the fraud allegations.

Bloomberry is due to pay $ 296 million after an arbitration panel in Singapore determined in 2016 that it wrongly terminated a contract with Las Vegas-based Global Gaming Asset Management (GGAM).

GGAM sued Bloomberry in New York City in an attempt to get its multi-billion dollar owner, Enrique Razon, to pay.

But now Bloomberry claims that GGAM committed fraud in the arbitration tribunal by deliberately withholding documents “for the purpose of covering up … illegal conduct.”

What’s the story?

In 2011, GGAM signed a five-year agreement to manage the operation of Bloomberry’s Solar Resort in Manila upon completion. The American company also bought an 8.7% stake in the $ 1.2 billion project, which opened in 2013 and immediately paid off.

But just six months after the inauguration, Bloomberry terminated the deal, ultimately withholding “tens of millions of dollars in fees and other consideration owed,” according to GGAM.

Bloomberry claims to have terminated the management contract because the American company had “not devoted significant time to the management of Solaire and … had not fulfilled its obligations”.

“Unexplained transfers”

But now Razon’s company says it discovered after the arbitral tribunal’s ruling that its management agreement with GGAM had been “undermined by violations of Philippine and US law.”

Bloomberry alleges that GGAM covered up violations of federal anti-corruption laws during their partnership. This was the “pursuit of a ‘business strategy’ by GGAM centered on a Chinese government official exerting influence over business actors for [GGAM’s] benefit in exchange for remuneration, ”according to the Philippine company.

Bloomberry cites two unexplained transfers of $ 25,000 from GGAM to the office of then-Asia President Eric Chiu. “This happened when the official was meeting Mr. Chiu in Macau and granting him such benefits,” Bloomberry said in court documents.

LVS Saga

Razon’s company discovered these potential irregularities after a 2017 investigation by the United States Securities Exchange Commission (SEC) into the activities of American casino giant LVS Corp in Macau in the 2000s. The SEC was focusing on d ‘possible violations of the law on corrupt practices abroad involving Chiu, then director of LVS, and other executives of the US casino giant.

LVS ultimately paid a fine of $ 6.96 million to the US Department of Justice under a no-prosecution agreement. As a condition of the deal, LVS admitted that some company directors “knowingly and willfully failed to implement a system of internal accounting controls to adequately ensure the legitimacy of payments.”

GGAM was founded by former LVS directors including Chiu and former COO and Chairman Bill Weidner. Bloomberry alleges in court documents that GGAM pursued a strategy of lining the pockets of Chinese government officials during the partnership with Solaire in violation of the FCPA.

“Serious questions”

It is not proven. But Bloomberry says his defense in this case rests on “serious factual issues” that he hopes the documents he is requesting from GGAM will resolve. Japan also claims that the Singapore arbitration panel would have ruled differently if GGAM had provided these documents to the panel.

In the meantime, GGAM is asking the court to uphold the arbitrators’ decision and wants it to be enforced against Razon’s US assets.

GGAM says those assets are hidden across a vast network of shell companies and include Steve Wynn’s former residence at the Plaza, which Razon bought for $ 24.4 million, according to court documents.