Alleged Chinese Gang Leaders Are At The Center Of A Busted World Cup Gambling Ring

On June 23, Malaysian businessman Wei Seng Phua, aka Paul Phua, landed his G-550 jet in Las Vegas. He was likely tired, as one would be after a long flight from Macau - where he had been arrested and held in police custody.

Unfortunately for Phua, an alleged high-ranking member of China's brutal mafia, the 14K Triad, his troubles had only begun.

Within a month, FBI agents would descend on the three villas he and his associates - including Macau casino junket operator Richard Yong - had rented at Caesars Palace. They would arrest him and seven others in connection to an allegedly illegal World Cup gambling ring, which authorities claim Phua and his associates controlled remotely, according to the FBI's complaint.

Now months later, Phua is maintaining his and his son Darren's innocence. He says he has nothing to do with a the 14K Triad - though US and Malaysian law enforcement agents say they have been monitoring his association with the crime syndicate since 2009. He says he did not flee Macau on his jet after bribing his way out of jail in June.

And he says the government should not be able to use any of the information found on laptops and cellphones collected during the FBI's raid on his villa.

"The searches were unconstitutional," Phua's lawyer wrote in a brief. "A ruling upholding these intrusions would cause innocent Americans to live their daily lives burdened with the palpable fear that their government is regularly scheming to spy on them in their homes."

The raid was conducted under interesting circumstances.

Kind of like Ocean's 11

Phua and his crew were occupying villas 8881, 8882, and 8888 - 8 is a lucky number in Chinese culture. According to the complaint, once they landed they requested a bunch of electronic equipment. The Feds used that request to enter the villas.

One June 22, a few Caesars Palance engineers allegedly entered the villas to help set up and troubleshoot the equipment set up in the rooms. The engineers took detailed notes and pictures, according to the Feds. They later presented their findings to the Feds and the Nevada Gaming Control Board.

The engineers said there were about five stations, each set up with a Century Link DSL line, three monitors and voice over internet protocol capability. Cox, Dish, and Direct TV signals were all allegedly set up on big screen televisions tuned in to the World Cup games.

To law enforcement agents, the setup looked like a "wire room," where illegal bets are made and monitored.

Technicians made a few more visits back to the villas in the first few days of July. This time they were accompanied by special agents in disguise. At one point they were blocked from fully entering the villa by a butler brought to Caesars by the guests.

Finally, on July 9 agents officially raided the villas, where Phua and his son Darren were watching the Argentina vs. Netherlands match.

One woman working at a computer was so focused on her work, according to the FBI's complaint, that when the agents demanded that everyone put their hands up, she lifted one arm and continued typing with the other.

Phua was arrested a few days later in the lobby of the Palazzo hotel.

Bad Timing

The problem is that Phua and his associates were allegedly using gambling platforms, SBOBet and IBCBet. Both are not licensed in Nevada. According to the complaint, Darren Phua admitted under questioning that his father owns IBCBet.

Paul Phua was bailed out of jail by poker stars Andrew Robl and Phil Ivey. They paid out $2.5 million and offered up Phua's $48 million jet as collateral.

The government argues that Phua was able to get out of jail in Macau in part because he's a powerful junket operator. Junkets are one way high-rollers get money to gamble in Macau.

The system works like this : Investors pull their money into a fund, and the junkets use that money to give high-rollers cash for the casinos. The junkets, in turn pay, investors a certain amount of interest on their investment - maybe 1%-2%.

The system worked until this spring, when a junket operator walked out of a casino with over $1 billion in junket money. All of the sudden investors wanted higher returns.

It couldn't have come at a worse time, the Chinese economic slow down and President Xi's crackdown on corruption have China's super-wealthy laying lower than before. That means less money in Macau.

Wells Fargo estimates that Macau revenue could be down as much as 25% from this time last year. Analysts think the business model is "nearly broken."

Connections

Since the arrest, government officials have used the information they found on laptops and cellphones in the raid to connect Phua to other high-ranking members of the 14K Triad. Meanwhile, Phua has maintained that he has nothing to do with the organization.

"[The] allegation rests entirely on one sentence from a six-year-old document stating information supposedly provided by someone in the Malaysian police," lawyer Tejinder Singh argued in opposition. "One isolated sentence does not support the US government's claim that Phua supposedly is a leader of the organisation."

They allege that Cheung Chi-Tai, the leader of Hong Kong's Wo Hop To Triad who also has ties to Macau's Neptune junket, is connected to the World Cup group - a charge everyone soundly denies.

Officials also allege that Richard Yong is a member of the 14K Triad. A charge his lawyers also deny.

Phua is trying to make the case that he's merely a globe-trotting poker aficionado who regularly plays in multimillion dollar "nosebleed" games.

Phua's next hearing will take place in Nevada on Dec. 15. Phua's attorney did not immediately respond to Business Insider's request for comment.