Stormy Clouds Above Imperial Pacific, Federal Charges Against Executives

Federal prosecutors indicted 3 people related to Imperial Pacific and its controversial casino project in Saipan, the second-largest island of the Mariana Archipelago and part of the Commonwealth of the Northern Mariana Islands (CNMI), a Bloomberg report revealed on Friday.

The trio of Chinese nationals allegedly conspired to hire illegally a large number of Chinese workers for the casino site, dealing with illegal money transfers in the process. The indictment is adding to the pile of troubles for the Hong Kong operator which recently received an ultimatum from the Commonwealth Casino Commission (CCC), the gaming regulator in CNMI, to either pay its debts or lose its casino license.

Scheme for Illegal Import of Labour

Liwen Wu, Jianmin Xu and Yan Shi were employed by either Imperial Pacific, or its subcontractor MCC International Saipan Ltd, the construction company hired to build the massive casino-type resort in Saipan, which is US territory in the Pacific Ocean.

All three Chinese nationals that were indicted in conspiracy under the Racketeer Influenced and Corrupt Organizations Act currently reside outside the US, the Department of Justice pointed out, and the purpose of the illegal scheme was to reduce labour costs, avoid compliance with federal labour and immigration laws and avoid paying taxes and penalties for violating the law.

The Department of Homeland Security and Citizen and Immigration Services issued only several hundred worker visas for Imperial Pacific, the indictment pointed out.

“(Imperial Pacific, MCC International) and other contractors chose to import nearly all of their employees from China instead of hiring U.S. citizens or otherwise eligible foreign nationals.”

Indictment

Defendants Wu and Xu put pressure on subcontractor MCC International starting September 2015, to speed up work on the casino site, or else face financial sanctions for missing deadlines, as Imperial Pacific was facing fines under the exclusive rights agreement with the CNMI government, which were dependent on meeting certain phases deadlines.

“As part of this pressure, defendants Liwen Wu and Jianmin Xu and (another conspirator) implicitly and explicitly ordered (MCC International) to hire unauthorized alien workers, referred to informally as ‘heigong,’ Mandarin for ‘black worker.’”

Indictment

Besides ordering MCC to import workers from China using the CP program, under which Chinese nationals can enter the CNMI for business or pleasure for up to 45 days without any work rights, the defendants instructed potential hires to lie to the immigration officers that they were visiting the CNMI as tourists under the program.

The sophisticated plan to deceive US Customs and Border Patrol included pairing the prospective work candidates in China with Chinese females, who were hired to pose as spouses or girlfriends in exchange for paid vacations to the CNMI.

“The scheme lasted through at least March 2017 and resulted in an influx of more than 600 illegal workers onto the worksite, many of whom were inexperienced and/or not qualified to perform their assigned tasks.”

Indictment

Imperial Pacific explained in its filing to the Hong Kong Stock Exchange, August 5, that one of the indicted trio was a non-managerial employee of the company until 2017, while in a separate court filing related to a civil case, the attorneys of the group depicted Liwen Wu and Jianmin Xu as company executives.

Neither Imperial Pacific, which reimbursed MCC International and other contractors for the illegal workers’ salaries, plane tickets and other expenses, nor Metallurgical Corp. of China Ltd, the owner of the subsidiary unit in Saipan, were accused of any wrongdoing in the legal filing.