Former Sands Macau executive alleges he was wrongly fired

By Steve Green

Friday, Oct. 22, 2010 | 12:06 a.m.

Steve Jacobs, former point man for Las Vegas Sands Corp. in the fast-growing Chinese gambling district of Macau, claims in a lawsuit he was fired over disputes, including his resistance to demands that he engage in improper and illegal activity.

In a complaint filed this week in Clark County District Court in Las Vegas, Jacobs says he was improperly terminated as CEO of Sands China Ltd. after conflicts erupted with Las Vegas Sands CEO and Chairman Sheldon Adelson.

Jacobs was hired to run Sands’ Macau gambling and hotel operations in May 2009 at an annual salary of $1.3 million plus bonuses under a three-year contract, the suit says.

The lawsuit says Jacobs received a positive performance review by Sands Chief Operating Officer Michael Leven for 2009 and that he had repaired relationships in Macau, where officials had stopped meeting with Adelson because of his “rude and obstreperous behavior.”

But the lawsuit says that in July, Jacobs was terminated and “escorted off the property by two members of security in public view of many company employees, resort guests and casino patrons” and was escorted to the border to leave Macau.

Some of the conflicts with Adelson were over issues such as demands that Jacobs use improper “leverage” in working with Macau government officials and prominent Chinese banks on a Four Seasons Apartment project, the lawsuit said.

Jacobs also claims Adelson ordered him to arrange investigations of Macau government officials so that “negative information” could be used to thwart government regulations and initiatives adverse to the interests of Las Vegas Sands.

The suit said he was pressured to use a Macau attorney, despite concerns this could risk violations of the Foreign Corrupt Practices Act, and that he was told not to disclose “material information,” such as cost overruns to the Sands China Board of Directors.

The suit also claims Jacobs disagreed with Adelson’s desire to aggressively grow the Macau junket business because of its low margins, credit risks and investigations alleging connections between Las Vegas Sands, triad organized crime groups and the junket business.

Jacobs says in the lawsuit that while Las Vegas Sands said he was fired for cause, including exceeding his authority and failing to keep the board of directors informed, these reasons were “manufactured” and “pretextual.”

Because Las Vegas Sands claims he was fired “for cause,” Jacobs says, he’s been deprived of the right to exercise stock options he had been awarded as well as at least one year of severance pay.

The lawsuit alleges breach of contract, tortuous discharge in violation of public policy and other counts and seeks unspecified compensatory and punitive damages.

The tortuous discharge count alleges: “Certain of the improper and illegal demands made upon Jacobs by Adelson would have required Jacobs to engage in conduct that he, in good faith, believed was illegal.”

Las Vegas Sands typically doesn’t comment on lawsuits and hasn’t yet responded to Jacobs’ lawsuit, which was filed by Las Vegas attorneys Donald Campbell and J. Colby Williams of the law firm Campbell & Williams.

But Jacqueline Wu, a spokeswoman for Sands China, told Bloomberg, "We deny the allegations."