NagaCorp Commissions Laundering Probe

NagaCorp Ltd., which owns the NagaWorld casino in Phnom Penh, has commissioned an internal investigation into possible money laundering, the company said in a report released Monday.

NagaCorp said the investigation, which is part of the Hong Kong-based company’s semi-annual auditing process, would review the first six months of the year, and that the results would be published in its next annual report.

“NagaCorp has engaged an independent professional party to review the internal controls of the Company and its subsidiaries …with a focus on anti-money laundering,” the report says.

In a report released last month by the Swiss-based Basel Institute on Governance, Cambodia was ranked the third most at-risk country for money laundering and terrorist financing, behind only Iran and Afghanistan.

Similarly, the France-based Financial Action Task Force (FATF) said in a February report that despite making some progress to stamp out money laundering, the practice remains rife in Cambodia.

“Despite Cambodia’s high-level political commitment…to address its strategic [money laundering and terrorist financing] deficiencies, the FATF is not yet satisfied that Cambodia has made sufficient progress in improving,” the report says.

According to the U.S. State Department’s 2009 country report on Cambodia, the majority of the country’s casinos, which are mostly located near its borders, use Thai and Vietnamese bank accounts to obscure the flow of illegal money.

“Casino patrons placing small bets simply hand-carry their money across borders, while others use either bank transfers or junket operators,” the report says.

“There is no effective oversight of cash movement into or out of Cambodia. Cambodian casinos have accounts with major Thai or Vietnamese banks and patrons can wire large amounts of money to one of these foreign accounts,” it says.

But despite recent financial losses reported by Queenco Casino in Sihanoukville and Dreamworld Casino in Poipet City, the gaming industry is growing steadily in Cambodia.

There are currently 26 casinos in the country, up from 21 in 2009, according to WorldCasinoDirectory.com and the FATF, respectively.

[email protected]

Correction: An earlier version of this story mistakenly stated that NagaCorp Ltd. commissioned an investigation into suspicions of money laundering. The probe is part of the company’s standard, semi-annual auditing process.

© 2014, All rights reserved.