The total outstanding liabilities of the owner of the defunct Tinian Dynasty Hotel & Casino has now climbed to over $250 million, excluding the $75 million in civil penalties assessed by the U.S. Department of the Treasury Financial Crimes Enforcement Network.<\/p>\n
Hong Kong Entertainment (Overseas) Investments Ltd. chair Chun Wai Chan disclosed that this increasing amount is due to late payment penalties and interest.<\/p>\n
Chan disclosed Tinian Dynasty\u2019s outstanding liabilities Wednesday in response to the federal court\u2019s show cause order directing HKE to explain why sanctions should not be imposed against it for failure to obtain a lawyer in connection with a lawsuit filed by foreign workers over the denial of their CNMI-Only Transitional Worker petitions.<\/p>\n
U.S. District Court for the NMI Magistrate Judge Heather Kennedy had given HKE and Mega Stars Overseas Limited until yesterday to respond to the show-cause order.<\/p>\n
Kennedy gave the order after Chan, who appeared by telephone at the last hearing, informed the court that they have not retained a lawyer and do not intend to do so because of financial inability.<\/p>\n
In HKE\u2019s response, Chan said the casino operation stopped in August 2015. When the hotel operation also halted in March 2016, the income stream dried up.<\/p>\n
\u201cWe ran out of money,\u201d he said.<\/p>\n
That meant they could not pay the government, employees, suppliers, shareholders, and the lawyers the company used to hire.<\/p>\n
Chan said they acquired HKE in 2013 and has invested over $40 million to cure all legal and financial difficulties of the previous owner. That included paying back wages of employees and taxes owed the government.<\/p>\n
In 2014, Chan said, the company\u2019s net loss was at $10.8 million and the total deficit was at $121.9 million.<\/p>\n
In 2015, he said, the net loss was at $11.2 million and the total deficit was at $133 million.<\/p>\n
Chan said the company tried hard to survive after paying the U.S. government $3 million in July 2015 to settle a criminal case.<\/p>\n
He said HKE filed for Chapter 11 bankruptcy protection in December 2015, but the federal court dismissed it in January 2016.<\/p>\n
Since they could not pay their lawyer, Daniel T. Guidotti, the lawyer withdrew, Chan said.<\/p>\n
\u201cWe cannot find another one to represent us,\u201d he said.<\/p>\n
\u201cWe want to state the fact that we have run out of money, but we are not abusing our staff,\u201d said Chan, adding that they expended a lot of effort in trying to get all their foreign workers back to their countries.<\/p>\n
Chan said that Samuel Mok, the lawyer for the plaintiffs in this case, is taking advantage of the fact that they have no money to hire a lawyer.<\/p>\n
Chan said it does not, however, make Mok right in the plaintiffs\u2019 claims in this case.<\/p>\n
\u201cI am willing to come forward to explain in person before the judge without an attorney,\u201d he said.<\/p>\n
Kennedy, in her show-cause order, reiterated that failure to obtain a lawyer may result in a district court judge striking HKE\u2019s and Mega Stars\u2019 answer to the lawsuit and entering a default judgment against them.<\/p>\n
At the Jan. 16 hearing, Guidotti withdrew as counsel for HKE and Mega Stars after the companies failed to pay his attorney\u2019s fees.<\/p>\n
Kennedy informed HKE and Mega Stars that the corporations may appear in court only through an attorney. She also explained that failure to obtain a lawyer may result in sanctions, including entry of a default judgment.<\/p>\n
Mok is counsel for Eric F. Dona and six other co-plaintiffs. There are 15 named plaintiffs in this case.<\/p>\n
In their lawsuit, Dona and co-plaintiffs alleged that the owners and management of Tinian Dynasty lied to them about their immigration legal status, that they were legally authorized to work despite the denial of their CW-1 petitions.<\/p>\n
In June 2015, FinCen assessed HKE with a $75 million civil penalty for \u201cwillful and egregious violations\u201d of the Bank Secrecy Act.<\/p>\n
In February 2016, the district court authorized the U.S. Internal Revenue Service to dispose the $2.5 million that HKE has agreed to pay as part of a $3.03-million settlement of a criminal case.<\/p>\n
In May 2017, the District Court ordered HKE to pay $191,400 in civil penalty to the U.S. Labor secretary for willful and repeat violations of the overtime provision of the Fair Labor Standards Act.<\/p>\n","protected":false},"excerpt":{"rendered":"
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