FBI Visits Office of Saipan Casino Run by Trump Protege

(Bloomberg) -- Agents from the U.S. Federal Bureau of Investigation visited an office belonging to the operator of a casino on the remote U.S. island of Saipan that has attracted attention for its huge revenues, according to a local legislator and residents.

FBI personnel, accompanied by uniformed police officers, arrived Thursday morning at a local office used by Imperial Pacific International Holdings Ltd., the Hong Kong-based company that owns the Best Sunshine Live casino, local residents said. They stayed for several hours, with local police blocking access to the building.

“There definitely was some kind of investigation or raid being done," said Ed Propst, a member of the territorial legislature. "It appears to be a joint effort between local and federal authorities."

In a stock exchange statement Friday, Imperial Pacific said "neither the Group nor any of its staff has received any investigation notice from any of the U.S. Federal Bureau of Investigation or government departments."

The FBI "is not in a position to comment at this time" on any enforcement actions in Saipan, Michele Ernst, a spokeswoman for the bureau in Hawaii, whose jurisdiction includes the island, said on Thursday.

Saipan local television, KSPN2, reported Thursday that there was an FBI raid at the Best Sunshine office. It's not known whether Imperial Pacific was the target of any investigation or what law enforcement officials may have been seeking.

Shares of Imperial Pacific traded 5.6 percent lower at 2:11 p.m. in Hong Kong, after falling as much as 17 percent.

Saipan, an island of 50,000 residents closer to China than to Hawaii, relaxed rules on casinos in 2014 and soon awarded Imperial Pacific exclusive rights to open casinos there. The casino, run by an executive who cut his teeth in Atlantic City casinos then owned by Donald Trump, enlisted a slate of luminary overseers including former leaders of both the Republican and Democratic national parties in the U.S.

Its board members include James Woolsey, who ran the U.S. Central Intelligence Agency in the early 1990s and was among national-security advisers to Trump's presidential campaign. Former FBI director Louis Freeh and Ed Rendell, a former Pennsylvania governor and Democratic National Committee chairman, sit on an advisory committee, as does Haley Barbour, the ex-Mississippi governor and Republican National Committee chairman who's now a prominent lobbyist.

Woolsey, Freeh and Barbour didn't immediately respond to requests for comment.

Rendell, through a spokesman, said he wasn't aware of any developments at Imperial Pacific facilities and said an “independent, prestigious account organization” had reviewed the company's finances and found nothing improper.

In 2015, the company opened Best Sunshine Live in a mall between a laundromat and a cellphone shop. From its sleepy storefront, Best Sunshine Live has posted per-table revenues far greater than those at the largest resorts in Macau, Asia's gambling capital. 

Read more: Big Money, Big Questions at Trump Protege's Remote Casino

Those cash flows attracted interest from the U.S. Treasury unit that monitors suspicious financial flows, a person familiar with the matter said in November. A spokesman for the unit declined to comment for this article. 

Imperial Pacific has been sued several times since it opened the casino, including in December by a former executive accusing it of violating money-laundering rules. 

The company says it complies with regulations and that high transaction volumes are the result of high-rollers, including Chinese who sometimes bet millions of dollars at a time. In response to the former executive's suit, it told the court this month that it would file an amended answer soon.

More recently, in a dispute to which Imperial was not a party, a court found credible evidence that effectively illustrated connections between the company and a separate firm, Esteem Capital Success Ltd., that paid for Saipan legislators to take "fact-finding" trips to Hong Kong and Macau shortly before the island granted its sole gaming license to the Hong Kong company.

While Imperial Pacific and Governor Ralph Torres said last year that Esteem wasn't involved in the bidding process, the judgment described evidence that Ji Xiaobo, the son of Imperial Pacific's controlling shareholder, was an Esteem representative. Imperial Pacific's headquarters are currently in the same suite as the one specified in the decision as Esteem's office.

Imperial Pacific this week declined to comment on any links with Esteem. Torres said he wasn't aware of any connection.

Mark Brown, Imperial Pacific's chairman who has also served as its chief executive officer, is a former executive in President Trump's Atlantic City casino empire. He has led Imperial Pacific's plan to replace what it describes as a temporary gaming facility with a much larger casino complex in coming weeks. Brown didn't respond to email and phone requests for comment.

--With assistance from Daniela Wei Greg Farrell and David Kocieniewski

To contact the reporter on this story: Matthew Campbell in Hong Kong at mcampbell39@bloomberg.net.

To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Kenneth Wong at kwong11@bloomberg.net, Jeffrey D Grocott