Choi says Mirage was warned of Korean law on debts

David Strow

Thursday, June 3, 1999 | 11:11 a.m.

Laura Choi, the central figure in a Korean gaming debt collection scandal at Mirage Resorts Inc., has produced a letter that she says shows Mirage was aware that attempts to collect gaming debts in Korea would run afoul of that nation's laws.

Choi also claims Mirage executives tried coercing her into giving false information about the case to Nevada gaming regulators.

Choi filed the letter in U.S. District Court Wednesday as part of her lawsuit against Mirage, her former employer. In that suit, Choi accuses Mirage of breach of contract, wrongful termination and defamation.

Choi countersued after Mirage named her as a defendant in its lawsuit against Trump Hotels and Casinos. In that suit, Mirage accused her of providing trade secrets to Trump and misappropriating company funds.

Her case revolves around a 1997 trip she made to Korea to collect debts from high rollers in that country. She was arrested by Korean authorities during that trip for violating that nation's currency laws. Mirage officials later testified that Choi was acting without company authorization, and that they had no knowledge of her activities.

Prior to making that trip, Choi said she was given a letter by her supervisor, Al Faccinto, that made it clear that attempting to collect on those debts would be illegal.

The letter, entered into evidence Wednesday in U.S. District Court, is dated May 23, 1997. It was written by Young-Cheol Jeong, a Seoul lawyer, and addressed to William Bryson Jr., an attorney Choi says was working with Mirage in Taipei, Taiwan. It is headlined, "Mirage Casino-Hotel: Korean Foreign Exchange Advice."

The letter warns that the Korean government, trying to control that country's financial crisis, had severely restricted the flow of capital out of the country -- and was taking an especially hard line against casino spending. Even travel spending was restricted at the time, to $3,000 for airfare and $10,000 for "basic expenses" per trip.

"There are numerous cases of individuals who were imposed with severe penalties for excessively frequenting casinos," Jeong wrote. Thirty people had recently been indicted, he said, after they "spent a huge amount of money in foreign casinos and paid back in Korea with Korean won."

Jeong also noted in the letter that remittances by Korean nationals to "overseas" corporations were limited to $5,000 per transaction, or $20,000 in any one year. Such limits could only be waived with government permission, he said.

Choi said she received a copy of the letter from Faccinto shortly before she left for Korea.

"(Choi) was advised it was her job to go to Korea and collect the money owed to the Mirage," Choi's lawsuit says. "That if she did not go to Korea to collect the debt, she would be terminated."

Mirage officials, however, have said that Choi was ordered to abide by Korean currency laws during trips to that country.

Choi left for Korea, her third collection trip to that country. While there, she was arrested by Korean police and sentenced to a year in prison. Officials confiscated $534,000 she had collected from a Korean player. Her sentence was later suspended.

Upon her return to Las Vegas, Choi said she was immediately called into a meeting with Mirage executives. She said that these officials "attempted to compel (her) to give false and misleading testimony to the Nevada Gaming Control Board and/or Commission."

After refusing, she claims she was terminated.

In August 1998, the state Gaming Control Board filed a complaint against Mirage in connection with the trips. The complaint stated that "the blatant collection activities and deliberate efforts to circumvent South Korean law and customs agents while in South Korea, with the full knowledge and support of Mirage executives, constitutes a pattern and practice of illegal conduct while in South Korea."

In a settlement, Mirage paid a $350,000 fine, but denied that its executives knew about the collections.