A Nevada Court has ordered Las Vegas Sands Corporation casino operator and majority owner, Sheldon Adelson, to explain how Macau business records ended up in the U.S. According to Clark County District Judge Elizabeth Gonzalez, she no longer believes that Adelson and lawyers for Sands’ attorneys have been “forthright.”
In 2010, Steven Jacobs, the fired chief executive officer of the Sands’ four China casinos, sued the company for breach-of-contract. According to Jacobs, the Sands’ terminated him because he refused to give in to Adelson’s “illegal demands” to secretly investigate Macau government officials and use “improper leverage” against them. Steven Jacobs v. Las Vegas Sands, A627691-B, Clark County, Nevada, District Court (Las Vegas). According to the Sands, Jacobs was terminated for working on unauthorized deals and violating company policy. Over half of Adelson’s billion dollar gambling revenue comes from the four casinos in China which are located in the territory of Macau.
After Jacobs’ filed suit, he requested the Sands’ produce certain business operation files, located on his former computer, as evidence in his breach-of-contract case. Attorneys for the Sands told the court that the files could not be produced because under Macau law, no evidence requested by Jacobs could be transferred from Macau or viewed in Las Vegas without lawyers for Sands China reviewing it first in Macau and getting clearance from individuals who had received the e-mails involved, as well as from local authorities. Based on testimony from another former Sands’ employee, the court recently learned the requested computer files, including emails, were brought to Las Vegas on a computer drive sometime in 2011.
According to attorneys for the Sands, neither they nor Adelson lied to the court because:
1. The testimony previously given regarding the prohibition of a records transfer from Macau pertained to documents in Macau at that time. The transferred in error, the computer drive was transferred prior to the testimony.
2. Sands’ attorneys had disclosed to Jacob’s attorneys and the court that there were Macau documents in Las Vegas.
3. Sands’ attorney had no legal or ethical duty to volunteer to Jacobs what Macau documents were in Las Vegas, unless requested.
Though Judge Gonzalez indicated no one would be jailed over the disclosure dispute, she did indicate she may sanction Adelson and/or the Sands. If found guilty of withholding evidence, Adelson may be sanctioned.
Under Nevada discovery laws, a party that without substantial justification fails to disclose information required by Rule 16.1, 16.2, or 26(e)(1), or to amend a prior response to discovery as required by Rule 26(e)(2), is not, unless such failure is harmless, permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed. In addition to or in lieu of this sanction, the court, on motion and after affording an opportunity to be heard, may impose other appropriate sanctions. In addition to requiring payment of reasonable expenses, including attorney’s fees, caused by the failure, these sanctions may include any of the actions authorized under Rule 37(b)(2)(A), (B), and (C) and may include informing the jury of the failure to make the disclosure.
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