U.S. prosecutors refile charges in FBI ruse case

By Ken Ritter, Associated Press

Thursday, May 14, 2015 | 11:42 a.m.

Federal prosecutors in Nevada have added a conspiracy allegation and re-filed Internet bookmaking charges against a Malaysian businessman who won a recent court ruling that his rights were violated in an FBI search of his Las Vegas Strip hotel suite.

Defense lawyer David Chesnoff on Thursday derided the new charge and the refreshed indictment against Wei Seng "Paul" Phua as a last-minute attempt to revive a case crippled by governmental misconduct.

"The conspiracy charge has always been the darling of the prosecutor's nursery," Chesnoff said. "Mr. Phua categorically maintains his innocence."

Phua remains in Las Vegas under house arrest after posting $2 million cash bond and surrendering a $50 million aircraft as collateral. His trial is scheduled June 1.

U.S. Attorney Daniel Bogden declined through a spokeswoman to comment. He has said the government would only speak about the case in court and documents.

The indictment filed Wednesday in U.S. District Court in Las Vegas includes the same two charges — operating an illegal gambling business and transmission of wagering information — initially filed after Phua and seven other people were arrested last July in three suites at Caesars Palace.

Combined, those counts could get Phua, now 51, up to 14 years in prison and hundreds of thousands of dollars in fines.

The new conspiracy charge ups the ante. It carries a possible five-year penalty and a $250,000 fine.

The government also seeks to keep, as ill-gotten gains of a crime, more than $1.2 million in cash and more than 70 electronic devices seized from the luxury villas.

Prosecutors allege that Phua is a top member of an Asian organized crime syndicate who flew to Las Vegas on his private jet last June, days after having been arrested and charged with operating an illegal sports-betting business in the Asian gambling hub of Macau.

Phua's attorneys, Chesnoff, Richard Schonfeld and Thomas Goldstein, dispute allegations that their client had criminal ties. They say he's a respected hotel and mining businessman in Malaysia.

The government alleges that while in Las Vegas, Phua headed an international Internet gambling ring that converted several Caesars Palace hotel suites to boiler room operations crammed with laptop and tablet computers, Internet routers and cellphones and handled about $13 million in illegal bets during the FIFA World Cup.

Phua's son and six other defendants pleaded guilty to lesser charges in plea deals that had them forfeit hundreds of thousands of dollars in equipment and fines, and got them banned from returning to the U.S. for five years. The case against one defendant was dismissed. All seven returned to Asia.

U.S. District Judge Andrew Gordon ruled in April that FBI and Nevada Gaming Control Board agents improperly posed as Internet repairmen to get in to search Phua's villa.

The ruling threw out evidence collected from Phua's suite. It didn't kill the case outright.

Gordon this week rejected a bid to allow Phua to return to Malaysia pending trial.

Phua doesn't have a valid U.S. entry visa, the judge said, so letting him leave could mean he'd never return.

Phua's defense attorneys also accuse deputy U.S. attorneys of prosecutorial misconduct, and want the judge to punish the government by suppressing key evidence.