A Shady Consultant and Lackluster Accounting in China Wins Sands a $9 Million Penalty

Las Vegas Sands Corp. (LVSC), a casino and resort giant, agreed on April 7, 2016 to pay a $9 million SEC penalty to settle FCPA charges stemming from its activities in China and Macao. According to the SEC, LVSC transferred funds totaling more than $62 million to a consultant in China without supporting documentation or appropriate authorization for the transfer of those funds. Furthering LVSC’s troubles, the majority of the transfers were made even though senior LVSC management knew significant funds that had previously been transferred to the consultant couldn’t be accounted for. In addition to the transfers to the consultant, LVSC’s Chinese operations were rife with internal controls failures and shady accounting. The case demonstrates that such controls are “of the utmost importance,” said Susan Divers, a senior advisor at LRN Advisory Services Group. See “How Companies Can Use Enhanced Auditing Techniques to Address the Government’s Increasing Focus on Internal Controls” (May 13, 2015).

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