Chinese triad association alone not enough to trigger casino ban, says Star lawyer

Star’s group counsel says factors other than triad association need to be considered when banning cashed-up Chinese gamblers from its casinos.

Star Group General Counsel Andrew Power began giving evidence at the independent review of The Star on Friday.

Star Entertainment general counsel Andrew Power says cashed-up Chinese gamblers having known links to triad criminal gangs is not enough to ban them from playing at its casinos.

At a royal commission-stye inquiry to determine Star’s suitability to hold a NSW casino licence, Mr Power defended the company’s association with Chinese junket boss Alvin Chau — saying the group was yet to finalise its decision on whether he was a person of good repute despite his arrest in Macau last year.

He also said the NSW government potentially moving to a new licensing process for junket operators “appeared that junkets may not be dead forever”. And a report into Chau, which Mr Power jointly commissioned, stated that given Chau was a member of Chinese People’s Political Consultative Conference — a key part of the Chinese Communist Party’s United Front — it was unlikely he was involved in criminal behaviour.

Senior star executives were told of Chau’s links to Chinese triad gangs in June 2019 when its head of due diligence, Angus Buchanan, sent them a copy of a report he wrote during his employment at the Hong Kong Jockey Club.

While the club used Mr Buchanan’s report to ban Chau, Star Entertainment continued to allow his Suncity junket into its Pyrmont casino, despite his staff being caught on CCTV exchanging bundles of cash from backpacks for gambling chips, flouting NSW laws.

Mr Power said being associated with triads was a concern. “But I don’t know if you could place it as just a blanket rule that if someone had an association with triads that you can’t deal with them,” he said.

“I think it’s a relevant factor. I think it’s probably a decisive factor. But I think it is one factor that would need to be considered in the context of all the factors: the timing of that association, the nature of that association, the source of that information, the weighting given to that, that source and so on,” Mr Power said.

“I just don’t believe it’s as straightforward as if there is an allegation that someone was at some point involved with triad therefore the Star can’t deal them. It has to be considered with all other information relating to that person.”

Mr Power later dismissed accusations from counsel assisting the inquiry Naomi Sharp SC that he had instructed Mr Buchanan to “water down” a due diligence report into Chau, which wasn’t finalised until early last year.

“Well, I think a decision had been made in 2021 in relation to the question whether under the AML (anti-money laundering) program, we could continue to deal with Mr Chau. But I still think to this day, we‘re yet to finalise the decision as to the appropriate way to approach whether or not Mr Chau could be considered to be someone of good repute.”

Last November, Macau’s police arrested Chau after a two-year investigation, which uncovered an alleged illegal gambling syndicate and money laundering. This came after Chau ferried Chinese high-rollers to casinos in Macau for almost 20 years, bringing tens of billions of dollars into the city as it tore past Las Vegas to become the world’s richest gambling hub. He also operated junkets at Star and bigger rival Crown resorts.

Mr Power and Star financial crime boss Kevin Houlihan asked Mr Buchanan to complete a due diligence report on Chau after following the explosive allegations during the Bergin inquiry into Crown Resorts.

“I was discussing with Mr Buchanan at the time was it appeared to me that witnesses before the Bergin inquiry were shown a document and … responded, saying that it was clear that Crown should not continue to deal with Mr Chau.

“I was asking Mr Buchanan, whether we’ve missed anything. It seemed to be obvious to those people, but on the information we had, it didn’t seem obvious. And so I was wanting him to make sure one, he was across all of the details that were discussed in the Bergin review, and that we didn’t overlook something that was in our possession that needed to be taken into consideration.”

Ms Sharp asked Mr Power about when her saw the Hong Kong Jockey Report that Mr Buchanan wrote and alleged Chau was a member of the Macau faction of the 14K Triad Society and follower of former 14K leader Wan Kuok-Koi, also known as Broken Tooth Koi.

Mr Power had told the inquiry on Friday that he had “never read” the report and cannot recall when he received it - nor can Star general counsel Oliver White and compliance manager Skye Arnott, who said she might have “shredded” a copy she received.

“There was a lot of noise about Mr Chau at the time,” Mr Power said.

“There were a lot of different reports. We had intelligence reports that indicated that he was reputable and didn’t have links to organised crime and then there were others that refer to media that were conflicting.

“And I was basically hoping that someone would, you know, Angus’ experience could assess all this information and then provide to us an outline of the Star’s understanding and position and then a recommendation as to whether we continue to deal (with him).”

A copy of Star’s report into Chau - the result of several drafts that Mr Power denied “watering down” - highlighted that although Chau was a “politically exposed person” via his Chinese People’s Political Consultative Conference (CPPCC) membership, that also meant he was unlikely to be a criminal.

Inquiry head Adam Bell SC asked Mr Power if the report attempted to give Star “some comfort from the fact of Mr Chau’s membership at the CPPCC because it was unlikely he would have been appointed to that body if he was suspected of being involved in criminal activity”.

“I‘m not sure…we can take comfort,” Mr Power said. “But certainly… that could be read from that material, yes.”

Ms Sharp asked Mr Power: “is it right that the regulator can have no confidence in your judgment as to whether or not it is appropriate to deal with particular patrons or junket operators?”

“I don’t agree,” he replied.

The inquiry continues.

Originally published as Chinese triad association alone not enough to trigger casino ban, says Star lawyer