De Rong Shang has a habit of cheating casinos out of big bucks – now federal authorities say they are looking to break it.
The Chinese-born Shang, 50, a Southern California man convicted earlier this year of defrauding Station Casinos out of $1 million in a baccarat credit scheme, has become a key figure in a new FBI investigation into a similar, larger scam on the Strip.
In persuading a federal judge to revoke Shang’s bail last week, prosecutors alleged that Shang, while awaiting trial, was part of another group that "scammed Las Vegas casinos out of millions of dollars by cheating at baccarat."
Assistant U.S. Attorney Andrew Duncan provided few details of the scheme in court papers, but he said Shang’s group may have defrauded Paris Las Vegas out of $550,000 last October.
Federal authorities obtained a surveillance photo of Shang at the Paris on Oct. 12.
"The defendant was also identified as part of a group attempting to conduct the same scam at Caesars Palace on Oct. 9 and Oct. 12," Duncan wrote.
In all, Duncan said, "multiple casinos" were victimized.
He said Shang’s presence at Paris and Caesars Palace and his alleged involvement in the new scam violated the terms of his pretrial release.
Senior U.S. District Judge Roger Hunt bought Duncan’s argument. He ordered Shang detained in federal custody following a hastily called hearing Friday that took place before federal immigration officials could launch proceedings to deport Shang to China.
Shang is a Chinese citizen who came to the United States in 1991, prosecutors have said. Duncan told Hunt in his court papers that Shang decided not to fight his deportation, which likely would have allowed him to be sent back to China before his July 16 sentencing.
"It appears to the government that the defendant is attempting to use the removal process to flee from punishment in his criminal case," Duncan wrote.
FBI officials declined to comment on the latest baccarat investigation.
Jerry Markling, chief of enforcement for the Nevada Gaming Control Board, said he is aware of Shang’s previous casino fraud case, but has no knowledge of the newest FBI investigation.
Details of how Shang’s scam worked surfaced in the Station Casinos case.
Shang was convicted March 27 of one count of conspiracy to commit wire fraud and 22 counts of wire fraud following a two-week trial before Hunt. He faces up to 360 years in prison and $4.5 million in fines, according to prosecutors.
His co-defendant in the case, Yuli Eaton, 47, of Southern California, pleaded guilty and cooperated with prosecutors. Hunt is to sentence him on June 8.
The credit scheme unfolded between December 2006 and April 2007 at a local bank and three Station Casinos – Red Rock, Green Valley Ranch and Palace Station, prosecutors alleged.
Shang and Eaton recruited people to open Bank of America accounts funded by Shang. Then, Shang helped the recruits apply for lines of credit at the casinos.
Once the lines of credit were approved, the recruits transferred the money from their accounts to Shang’s account.
The recruits, who were paid $300 for every $10,000 line of credit they received, withdrew chips from their lines of credit and played baccarat at the casinos, prosecutors alleged.
They carried out a scam known as "rolling the chips" to make it look as though they were losing money, when in fact they were just hiding chips and giving them to other co-conspirators.
Shang ended up cashing in the chips, prosecutors alleged.
By the time the casinos tried to collect the unpaid markers, the accounts had been drained or closed.
"Shang deceived the casinos into believing that the recruits had sufficient funds to pay back the casinos," Duncan wrote in previous court papers. "In doing so, the defendant caused monetary losses to the casinos while enriching himself with proceeds from the fraudulent scheme."
Contact Jeff German at email@example.com or 702-380-8135.