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tion because through your efforts, why, a major money laundering scheme was broken up, you prosecuted the culprits, and justice was done.
And, you've set a fine example, and we appreciate that.
Mr. TYRE. Thank you very much. I might add that Mr. Powers is the man that was wired for sound when this thing began, and it was quite an experience.
Mr. HUGHES. First and last time, Mr. Powers?
Mr. HUGHES. Thank you. That concludes the testimony before the subcommittee today. Before I adjourn, I have a statement which I want to put into the record, submitted by the Atlantic City Casino Hotel Association, which I received today.
And, I might mention that the hearing record will remain open for 2 weeks for such other submissions as interested parties might want to make.
That concludes the hearing today and the subcommittee stands adjourned.
(Whereupon, at 12:50 p.m., the subcommittee was adjourned, to reconvene subject to the call of the Chair.]
STATEMENT SUBMITTED BY THE ATLANTIC CITY CASINO HOTEL ASSOCIATION The Atlantic City Casino Hotel Association welcomes the inquiry of the House Subcommittee on Crime into the potential utilization of casinos to further laundering of money from illicit drug trafficking. The Association's members are sensitive to this issue, and any issue, which threatens the integrity of Atlantic City's casino hotel industry.
The gambling industry will never condone the use of casinos for any unlawful purposes whatsoever, and a number of industry representatives have independently instituted policies and procedures which make it unlikely that they would be victims of laundering efforts. Nevertheless, Atlantic City's casino hotel operators are prepared to work closely with state and federal regulatory and law enforcement agencies to analyze the true nature and extent of this concern and to seek the right solution.
The industry in Atlantic City is comprised of the most sophisticated and successful operators in the gambling industry. It has grown in one of the most regulated structures ever developed for an industry. Millions of regulatory dollars and millions of regulatory hours are spent to insure the integrity of the industry.
The Association firmly believes that the regulatory tools are available to manage this concern. We urge this committee to carefully evaluate the facts before any decisions are made that would place this industry within another regulatory structure.
STATE OF NEW JERSEY,
DIVISION OF STATE POLICE,
West Trenton, NJ, May 10, 1984. HAYDEN GREGORY, Counsel, Subcommittee on Crime, House of Representatives, Committee on the Judici
ary, Washington, DC. DEAR COUNSEL GREGORY: Consistent with our recent telephone conversations and a re-evaluation of available data concerning my February 10, 1984 testimony before the Subcommittee on Crime, the following adjustments are in order:
"Page 32, lines 740 through 743, containing references to an individual by the name of Yip Hon, are to be deleted.”
I would expect that staff will make any necessary grammatical corrections for the final printing of my remarks. Sincerely,
CLINTON L. PAGANO,
NEW YORK, NY, May 29, 1984. Hon. WILLIAM J. HUGHES, Chairman, Subcommittee on Crime, House of Representatives, Washington, DC.
DEAR CONGRESSMAN HUGHES: At your February 10, 1984 hearing in Atlantic City, a witness, Colonel Clinton Pagano, testified about career criminals who utilize Atlantic City casinos to launder the fruits of their crimes. This testimony was given to support proposed legislation to extend the provisions of the Bank Secrecy Act to gambling casinos.
Because your Subcommittee will rely upon statements made by witnesses, you and your Subcommittee should know in what respects they are erroneous. If they are erroneous, other portions of the testimony of a witness who gave erroneous “information” thus becomes questionable.
Among those listed as career criminals by Colonel Pagano is my client, Mr. Yip Hon, who Colonel Pagano described as an “international narcotics smuggler from Hong Kong” and who deposited $280,000 in cash at the Golden Nugget Casino and $100,000 at Caesar's Casino.”
This “information” is entirely erroneous, except for the fact that he lives in Hong Kong. We ask permission to read Mr. Yip's formal statement at the hearing of your Subcommittee which is scheduled for June 7, 1984. Mr. Yip had been in the casino business for the greater part of his life. He will be 78 years old on December 15, 1984. An immediate reply will be appreciated. Respectfully yours,
SAMUEL M. SPRAFKIN.
NEW YORK, NY, June 7, 1984. Hon. WILLIAM J. HUGHES, Chairman, Subcommittee on Crime, House of Representatives, Washington, DC.
DEAR CONGRESSMAN HUGHES: I refer to the telephone call from Committee Counsel, Hayden Gregory, Esq., on May 31, 1984. Mr. Gregory informed me that I would not be permitted to read Mr. Yip Hon's statement at the hearing scheduled for June 7, 1984, but that such statement may be submitted, that it will be accepted and made part of the Congressional Record. Accordingly, I hand you the statement, subscribed by Mr. Yip. Respectfully yours,
SAMUEL M. SPRAFKIN.
STATEMENT OF Yıp HON At the February 10, 1984 hearing, Colonel Clinton Pagano, Superintendent, New Jersey State Police, read his prepared statement which previously had been submitted to your Subcommittee. His statement was given to support proposed legislation to extend the provisions of the Bank Secrecy Act to gambling casinos. In his statement, he sought to demonstrate that career criminals use casinos to launder the proceeds of organized crime and drug trafficking.
I find no fault with the proposed legislation. Indeed, your Subcommittee is to be commended for its consideration of every means which will enable law enforcement agencies to apprehend those who use the casinos to launder the proceeds of organized crime and drug trafficking.
However, because the Subcommittee will rely upon statements made by witnesses, it should know in what respects they are erroneous. The reliability of other portions of the testimony of a witness who gave erroneous “information” is thus questionable.
In his prepared statement, among “career criminals” who are “washing money", Colonel Pagano listed my name and stated: “Yip Hon, an international narcotics
smuggler from Hong Kong, China, deposited $100,000 in cash at the Golden Nugget Casino and $280,000 at Caesar's Casino."
Colonel Pagano's statement regarding me is erroneous on all counts:
1. I am not a criminal, nor a career criminal. Indeed, I have never been arrested or even charged with committing any illegal act.
2. I am not an international narcotics smuggler. Narcotics or drugs are odious to me. My businesses are in no way related to narcotics or drugs.
3. I did not deposit $100,000 in cash at the Golden Nugget Casino, nor $280,000 in Caesar's Casino. I made no deposit of any cash at either.
Colonel Pagano's statements regarding me were made recklessly and without regard to the truth. This is based upon the independent investigations which were made by me, by my son, Bing Yiu Yip of South Pasadena, California, and by my lawyer, Samuel M. Sprafkin, of 230 Park Avenue, New York, NY. We sought to ascertain the source of such information”. Neither Golden Nugget nor Caesar's Casino was the source of any of the “information”. Neither the Drug Enforcement Agency in Hong Kong nor New Jersey was a source of the “information". The Customs Service also was not a source of such "information". If Colonel Pagano did have a “source” for such “information”, it is unreliable and he did not even make the effort to check it with any of these government agencies.
I and my son contacted the U.S. Drug Enforcement Agency in Hong Kong. My lawyer contacted the D.E.A. in New Jersey, the U.S. Customs Service in Washington, and the two casinos.
Immediately after learning of Colonel Pagano's statement, my lawyer contacted the people at Golden Nugget and Caesar's Casino. Each confirmed that it could not have been the source of the statement. We subsequently wrote to each and each re sponded. Copies of the correspondence are available. Both casinos verified that I made no cash deposit.
On March 13, 1984, I and my son visited the U.S. Drug Enforcement Agency office in Hong Kong. The purpose of the visit was to ascertain the basis, if any, of Colonel Pagano's statement. It was a prearranged visit, so that Special Agents Robert Furey and George Hawkins were prepared to question me at length. The meeting consumed two hours. I answered all of their questions, not only with regard to my activities, but also with respect to people with whom I had come in contact. The meeting was fruitful. Incidentally, it is they who suggested that I have my lawyer seek to have the statement corrected before your Subcommittee.
My lawyer contacted the office of Gary Liming, Deputy Assistant Administrator for Intelligence, D.E.A. in Washington. Mr. Short and his Supervisor, Mr. Tobin, Special Agent of the D.E.A. in New Jersey, telephoned him. Mr. Tobin informed him that D.E.A. did not and could not have supplied the "information" about which Pagano testified with respect to me.
Because I make frequent visits to the United States and do not want to be "stopped” or to be subjected to "special attention” upon arrival in this country, I had my lawyer contact the U.S. Customs Service. He spoke to Lee H. Kramer in Washington. Mr. Kramer undertook to make a check of the Customs Service's “TECS”. After such check, Mr. Kramer informed him that I could be assured that I will not subjected to any “automatic special attention" upon my arrival.
You may ask: Who am I? What brings me here and what prompts me to visit casinos?
I reside in Hong Kong. I also have a residence in Macau. I will be 78 years old on December 15, 1984. My occupation and business from early youth was the manage ment and operation of regulated casinos. Later on, from 1962 through 1982, I was the managing director and operating partner of Lisboa Casino in Macau. As such director and partner, I traveled widely and visited casinos throughout the world. With some degree of modesty, I can state that the success and reputation of the Lisboa Casino was, in no small measure, due to my efforts and abilities.
My business and travel resulted in expanding my Hong Kong businesses and activities to other parts of the world, including the United States. In the United States, I own and operate commercial real estate. Aside from real estate develop ment, my business interests include the Macau Trotting Track and Stadium, which I had built and which celebrated its third anniversary of operation in September 1983. My businesses are, for the most part, family owned and operated, with my sons taking management roles second only to me.
Although I am no longer an owner of the Lisboa Casino, my interest in casinos has not abated. When in the United States, I often visit the casinos in Las Vegas and Atlantic City. My visits to the United States are not solely for pleasure. I do confer with people with respect to my business interests. This includes my lawyer. I meet with others regarding prospective ventures.
My lawyer communicated with Colonel Pagano and provided him with detailed information regarding me. We requested that he appear before you, correct and retract the statement made to your Subcommittee regarding me. Thus, you will not rely on information of a witness which is clearly and unmistakenly erroneous.
STATE OF NEW JERSEY,
DIVISION OF STATE POLICE,
West Trenton, NJ, September 25, 1984. HAYDEN GREGORY, Counsel, Subcommittee on Crime, House of Representatives, Committee on the Judici
ary, Washington, DC. DEAR COUNSEL GREGORY: By letter dated May 10, 1984 I confirmed a request that you delete from my remarks at the Subcommittee's February 10, 1984 Atlantic City hearing references to an individual named Yip Hon. I did so after giving consideration to a request by an attorney representing Mr. Hon who requested a retraction.
I am now writing to supplement my May 10 letter to you because I am advised that that letter does not constitute a full retraction which I intended. For the record, I hereby retract my remarks concerning Mr. Hon which were identified in my May 10, 1984 letter, and I request that you make this letter and my earlier letter part of the public record in this matter. Your courtesies in this matter are appreciated. Sincerely,
CLINTON L. PAGANO
85 - 6
PUBLIC LAW 97-258-SEPT. 13, 1982
96 STAT. 995
(2) the Secretary considers necessary to carry out section 5302 of this title. SUBCHAPTER 11–RECORDS AND REPORTS ON MONETARY
85311. Declaration of purpose
It is the purpose of this subchapter (except section 5315) to require certain reports or records where they have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings. $ 5312. Definitions and application (a) In this subchapter
(1) "financial agency" means a person acting for a person (except for a country, a monetary or financial authority acting as a monetary or financial authority, or an international financial institution of which the United States Government is a member) as a financial institution, bailee, depository trustee, or agent, or acting in a similar way related to money, credit, securities, gold, or a transaction in money, credit, securities, or gold. (2) "financial institution" means
(A) an insured bank (as defined in section 3/h) of the
(B) a commercial bank or trust company;
(D) an agency or branch of a foreign bank in the United
(E) an insured institution (as defined in section 401(a) of the National Housing Act (12 U.S.C. 1724(a)));
(F) a thrift institution;
(G) a broker or dealer registered with the Securities and
(H) a broker or dealer in securities or commodities;
(L) an operator of a credit card system;
(T) an agency of the United States Government or of a
(U) another business or agency carrying out a similar,
(A) United States coins and currency; and