Macau junket operator charged with money laundering

ominent Macau junket operator has been accused of laundering HK$1.8bn (£148m) through bank accounts in Hong Kong according to court documents released this week, report Reuters.

Cheung Chi-tai has been the subject of a lengthy investigation, with police freezing his and seven of his companies’ assets in November last year.

A former major shareholder of Macau junket operator The Neptune Group and associate of ex-Birmingham City owner Carson Yeung, himself imprisoned for six years on charges of financial misdealings, Cheung has been charged with three counts of money laundering, and could face up to 14 years in prison if found guilty.

Appearing in court last Wednesday, Cheung was presented with three charges relating to dealing with property known to in whole or in part directly or indirectly represent the proceeds of an indictable offence.

The Neptune Group has denied any current links with Cheung and that he remains a shareholder.

Chinese President Xi Jinping has launched a campaign to crack down on corruption and illicit transactions in the country, resulting in heavy scrutiny of Macau’s junket operators, with Deutsche Bank analysts forecasting a decline of over 30% in the VIP gaming sector that drives their business.

Analysts at JL Warren Capital say in relation to junket operators that “Macau is merely a marketing venue for them, but no longer the place they bring VIP gamblers.”

Forbes reported in April that the investors who usually fund junkets are turning their interest to the Shanghai Stock Exchange, while one junket operator claimed a turnaround in fortunes may not come until Jinping leaves office in seven years’ time.

Junkets act as middlemen for the Macau gambling industry, organising trips for wealthy groups and individuals from mainland China, lending VIPs money and collecting debts upon their return to China.

Because gambling debts are unenforceable in mainland China, a number of junket operators are suspected of liaising with triads to ensure debts are paid.

Cheung Chi-tai has never been convicted of triad-related offences, but was identified by a 1992 US Senate Committee investigation as a lieutenant of the Wo Hop To triad group and linked to the triads in a 2010 Reuters report.

With the case adjourned until 24 September, Cheung has been released on bail set at HK$200,000.