Crown Resorts, which operates two casinos in Australia, is denying reports made by several media groups that casino high-roller rooms and bank accounts were used to launder funds for a Chinese mob syndicate known as “the Company” in return for attracting Chinese VIPs to its Perth and Melbourne, Victoria casinos.
Crown Resorts plans to open a VIP only casino in Sydney at Barangaroo, an inner city suburb, in 2021. Some critics say Crown is regarded by police as “the Vatican,” and largely above the law.
Other reports cite court filings that show Crown paid the owner of a house of prostitution—a person implicated in human trafficking and also accused of money laundering—to attract “whales” to its casinos and provide them with funds to gamble.
The allegations prompted several prominent national Australian political leaders, such as MP Andrew Wilkie, a frequent critic of the government’s gaming policy, to call for an official investigation of Crown Resorts. Attorney-General Christian Porter announced early this week that there were “sufficient concerns” to refer the matter to the Australian Commission for Law Enforcement Integrity.
He declared, “I think that would be one of the things that a parliamentary inquiry could explore—the degree to which there is a cultural or systemic problem among Australia’s casino industry.”
The government confirmed that it has an agreement with Crown to fast-track short-term visa applications for Chinese visitors. Porter told the Australian parliament: “I have considered the allegations that have been raised in the media reporting, and particularly as they touch upon allegations which are either directly relatable to or tangentially relatable to Commonwealth officers.” He added, “It’s my view that there are sufficient concerns raised at least to warrant further investigations.”
The allegations were made by a joint investigation conducted by The Age, the Sydney Morning Herald and 60 Minutes. They are based on court documents, internal Crown memos and interviews with some within the company.
The “Crown Unmasked” report also suggests that James Packer, founder of Crown Resorts, himself had connections to Chinese triad syndicates through junket operator companies he founded.
Packer, who is a major stockholder, claims he hasn’t been an executive with the company since 2012 and resigned as chairman and board member in 2015. According to his attorney, he has a “passive role” with the company.
Crown Resorts sent a statement to the Macau News Agency (MNA) that it takes “legal and regulatory responsibilities very seriously” and has a “comprehensive Anti-Money Laundering and Counter-Terrorism Financing Program” overseen by the Australian government’s Australian Transaction Reports and Analysis Centre (AUSTRAC).
Crown added, “Crown takes its regulatory obligations very seriously and works closely with all of its regulatory agencies, including law enforcement, both state and federal. In this respect, Crown provides a range of information in a proactive manner consistent with its regulatory obligations, including reporting all transactions over AU$10,000 (MOP55,618/US$6,909) and suspect transactions of any value.”
A spokesman for Crown said that non-disclosure provisions within the law prevented it from disclosing details of transactions. He added that the company has a “robust process” for vetting junket operators and regularly reviews them as new information comes to light.
MNA asked Crown to comment on the arrests of 19 current and former Crown employees in China for gambling promotion crimes. It is illegal to gamble in China except on the island of Macau.
Crown replied that there is a class-action lawsuit being conducted regarding the arrests, which took place in July 2017. Crown stated: “Crown does not wish to comment on the matters in issue in that action, other than to say that it denies any allegation that it knowingly exposed its staff to the risk of detention or conviction in China.”
Crown itself was not accused by the Chinese government, but one of the 19 arrested told the Sydney Morning Herald that some executives of the company violated that law.
FollowCN.com reported that several government sources confirmed that sex workers from Asia had been flown into the country as part of junkets organized by companies working with Crown. One filing in Victorian County Court several years ago identified a Mr. Pan at Crown who “arranges people to gamble at a casino and (who) the casino pays … a commission.”
The court documents indicate that Simon Pan represented the junket operator Kim Teng Jong for Crown Melbourne, and that he brought in high rollers and gave them millions of dollars to gamble with, which might be considered a form of money laundering.
In 1998 a massage parlor run by Pan was raided by the Victoria police vice squad, which accused the establishment of employing women there in the country illegally. In 2011, police rescued two women suspected of being victims of human trafficking from Pan’s establishment in Melbourne.
When interviewed by the Age, Pan used an expletive and claimed his connections with Crown were all licensed and appropriate.
In 2015 ,court documents quote a woman that an Australian judge characterized as “at the apex of the laundering enterprise,” Mae Ja Kim, who said she knew Pan well when she was running his Melbourne brothel: “Simon and I would regularly talk on the telephone. I am aware that the Australian Federal Police intercepted a number of telephone calls … when I helped organize the recruitment of females in south-east Asia to travel to Australia and provide sex work … with the full knowledge and permission of Simon.”
The joint investigation also obtained documents from South Korean police that linked Crown Melbourne to 39 Tope, a brothel that Australian federal police have raided several times to rescue women who might have brought to the country against their will.
Investigations of 39 Tope between 2007 and 2015 led to several organized-crime prosecutions. Sex trafficking charges were not pressed because the women involved were afraid to testify, said the report.
Anti-human trafficking activist Courtney Keefe told the Age, “I think it’s extremely disturbing that the casino would have a contractual relationship with someone allegedly implicated in human trafficking,” she said.
Last week the Sydney Morning Herald pointed out that casinos are an obvious place for criminals to launder money. “Because casinos are a potential way for criminals to launder cash, Australia’s state and federal governments are supposed to regulate them tightly,” said its editorial on July 28. It added, “Trust in a company or industry rests on what governance experts describe as a ‘social license to operate.’ Without an informal social license built on a foundation of ethical behavior, corporations risk losing the community support needed to remain in business.”
The publication pointed out the conflict of interest inherent in the state government investigating casino activities, “because they themselves are partners in the profits. Victoria earned $220 million last year from Crown, and (Western Australia) $70 million. (New South Wales) will earn at least $1 billion in the first 15 years once Crown’s Barangaroo project is up and running.”
Such comments may have prompted the federal government to order its integrity investigation. AG Porter said the investigation in no way meant that the federal government had evidence against Commonwealth authorities. “Rather it’s the case that Section 18 of the Law Enforcement Integrity Commissioner Act might be called a precautionary referral provision,” he told members of Parliament.
The commission, he noted, has the authority to hold hearings, seize evidence and exercise coercive powers.
Just before the attorney general announced the referral, MP Andrew Wilkie called for an investigation. He said a “whistleblower” who had formerly driven for Crown in Melbourne had claimed, “there were no Border Force checks, foreign nationals getting off with up to 15 bags for a short stay, stopping only on the way to the casino to pick up a sex worker.” He added, “On breaking the law, this new whistleblower said—and I quote—‘Crown is Crown. No one touches Crown, you know there is no law at Crown.’ ”
Wilkie said his staff had spoken to three police officers in Victoria. “Crown is regarded as the Vatican, an independent sovereign state all its own, where the laws of Victoria and the laws of the Commonwealth do not apply.”
Crown is the largest employer in Victoria.
Crown responded to the announced investigation: “We believe these allegations are ill-informed and an attempt to smear the company. If there is any evidence of unlawful conduct, we encourage individuals or organizations to contact the relevant authorities.”
The premier of the Australian state of Victoria, Daniel Andrews, defended his state’s Commission for Gambling and Liquor Regulation. “If you’ve got an issue, if you’ve got a concern… then you can with confidence, go to the VCGLR, the independent regulator, give them that detail, put that forward. And it’ll be treated seriously.
“I know that they take issues of probity and integrity across the industry very seriously and I’m very confident that they have everything they need to guarantee that probity and integrity as we look to the future,” Andrews said. “No one gets a pass on integrity and probity when it comes to this industry or any industry.”
Wilkie, who is an independent member of parliament, urged the government to create a parliamentary committee to hold hearings. “This has reached a point where the Australian government has to pay attention,” he said.
Perth, where Crown operates its other Australian casino, is in the state of Western Australia. Its Gaming and Wagering Commission issued this comment: “When any issues related to casino regulation under our act are raised with the regulator they are investigated, as has happened in the past and will continue to do so.”
Wilkie later told reporters that the investigation doesn’t go far enough and that the allegations rise above “strictly criminal matters” to “integrity” and whether ministers pressured agencies to allow high-rollers with criminal records into the country.
The Department of Home Affairs issued a statement that it has arrangement with several international organizations for quick processing of short stay visas, but said no special treatment is given to individuals.
The multiple reports concerning Crown had their effect on its stock prices, which fell from $12.36 to $11.78 before recovering to end at a loss of 2.3 percent.
Sydney planners have rejected Star Entertainment Group’s Star City’s proposal for a $530 million hotel tower along the city’s waterfront. The hotel was intended to compete with the Crown Sydney casino and tower now under construction across the harbor, with a 2021 completion date.
The developer says it doesn’t plan to drop the proposal, which includes a 220-room Ritz-Carlton hotel and 204 high-end residential apartments, which it wants to build next to its Pyrmont casino. The proposal includes food and beverage options and a neighborhood center to be done in partnership with Hong Kong-based Chow Tai Fook Holdings and Far East Consortium.
The Star City proposal was opposed by anti-development groups who called the proposed casino “an eyesore,” and “completely inappropriate” by a city councilor. The New South Wales (NSW) Planning Department ruled that it was inconsistent with the existing and future character of the city.
The department wrote: “While numerous taller buildings are situated within Darling Harbour and Barangaroo, these form part of cohesive clusters of high-density buildings, associated with strategically identified precincts. The same context does not apply to the Star site.”
It added, “The plan would introduce a new tower form that is inconsistent with its immediate context and would result in unacceptable visual impacts due to its scale, isolation and visual dominance of the existing Pyrmont character and fails to promote good design and amenity of the built environment.”
The last word on the proposal rests with the independent NSW Planning Panel, which usually, however, takes the planning department’s recommendations.
A spokesman for Star said in a statement: “We believe it will have a significant benefit for tourism, the city and for the state of NSW.”
Last week, Star Managing Director and CEO Matt Bekier told Inside Asian Gaming that things are going to get rocky for casinos that appeal to VIP players due to the trade war between China and the U.S.
He noted that VIP turnover fell about 30 percent during the first half of the year and the trend is continuing. “The pattern behind that is strong arrivals but much less risk taking than in the past, so they don’t turn over as much as they have,” Bekier said. “These are very large players who are entrepreneurs and if they’re not certain how competitive their products are going to be from a tax point of view then they are not going to take as many risks with their spare cash,” he told Inside Asian Gaming.
That would continue as long as the rivalry between the U.S. and China remains on a high burn, he predicted.
Nevertheless, he called prospects in Sydney and Brisbane for Star and its rival Crown Resorts “enticing.” He added, “I think that Crown opening here in Sydney will make destination Sydney even more attractive. I think the whole east coast—Sydney, Gold Coast, Brisbane—will become very, very attractive for VIPs because you will have multiple high-end destinations in very close proximity and independent lines of credit.”
