The Star Sydney Casino reportedly did business with a junket operator linked to Asian triad gangs, and renewed that working relationship despite the increased risk of money laundering in the VIP room.
According to the Australian New Daily, Suncity brought foreign high rollers to gamble in a private room known as Salon 95. An agreement between the junket and casino forbade the use of cash, but on several occasions, video surveillance footage showed “bundles of cash being brought into Salon 95 and exchanged.”
Though Suncity violated the terms of the agreement, the agreement was renewed in June 2018, just over a month after it received a written warning from the operator. In 2019, Star CEO Matt Bekier suggested that Star and Suncity had mutually agreed that the junket would no longer do business there. In fact, though Suncity stopped operating out of Salon 95, it simply moved to Salon 82, where no signage displayed its brand name.
“It was still operating at the Star, just not under the Suncity banner … We certainly had a room,” said Angus Buchanan, Star’s group manager of due diligence and intelligence (Suncity no longer operates junkets, having closed that part of its business after CEO Alvin Chau was arrested in Macau in November).
According to the Sydney Morning Herald, Star disguised $900 million worth of Chinese debit card gambling transactions as hotel expenses, then lied to banks in an attempt to conceal the “massive fraud.” The ASX-listed casino group’s chief financial officer Harry Theodore and general counsel Oliver White reportedly were both involved in misleading the National Australia Bank (NAB) and China UnionPay (CUP) about the transactions in 2019.
Paulinka Dudek, Star’s assisting group treasurer, told NAB the company operated “hotels, restaurants and other entertainment facilities,” indicated that the cardholders had reserved hotel rooms, and forwarded their invoices. Under questioning in the matter, Dudek conceded that her response was “utterly misleading,” because it failed to mention the Star was a casino or that records showed some suspicious funds ended up in patrons’ “front money” accounts for gambling.
Dudek added that she was parroting written by Star’s legal team, which was led by White and at times approved by Theodore. “I had concerns, but this was the response that had been discussed at a senior management level; it was not something I was involved in,” Dudek said. “I wasn’t responsible for the [UnionPay] transactions occurring at the Star, and I knew senior management were involved in that correspondence.”
Adam Bell, SC, who is heading the NSW inquiry, asked the witness if she felt unable to “challenge senior management.” She replied, “I didn’t feel I could challenge a process that had been in place for a very long time at the Star.”
Though a Chinese high roller claims to have spent $2.5 million in three days on “hotel expenses” at the casino, the transaction did not cause a NAB executive to ask if the transactions were related to gambling. NAB’s Tanya Arthur denied that she was trying to help the casino conceal the transactions; she said she thought CUP card transactions were transferred across to a patron’s account to be spent on accommodation and luxury goods. She said the Star assured her there was “no gambling component” to any of the transactions.
However, after CUP raised concerns about the transactions and asked whether they were being used for gambling, Arthur reportedly discussed reducing the daily transaction limits from $100,000 to $50,000.
Peter Braham, SC, who is representing Star’s group treasurer Sarah Scopel, asked her, “Wasn’t that really just about flying under the radar? A smaller number might not get the attention of a larger number? And you were assisting people at the Star to get CUP off their back, notwithstanding the probability that some of the money was being used for gambling. Isn’t that what was going on?”
Arthur denied the allegation, and said Theodore did not tell her about the use of CUP cards for gambling.
Later, former Star Sydney chief risk officer Paul McWilliams told the inquiry he developed an ethics panel while he was responsible for managing risk and anti-money laundering at the Star from 2016 to 2019. But he added, “I think it’s fair to say to some degree it fell between the cracks.”
