Macau convicts ‘junket king’ Alvin Chau – the man who ran a casino within a casino at Star Entertainment
Star Entertainment considered junket king Alvin Chau an ‘astute businessman’ while a Macau judge has sentenced him to 18 years’ jail for running an illegal gambling empire.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
Alvin Chau – the Macau gambling tycoon who ran a “casino within a casino” at Star Entertainment –– has been sentenced to 18 years’ jail after he was found guilty of being the kingpin of a criminal syndicate and illegal gaming empire.
The 48-year-old’s conviction comes three months after NSW’s gambling regulator suspended the licence of Star’s flagship casino at Pyrmont, following a damning royal commission-style inquiry.
The inquiry, headed by Adam Bell SC, heard that Star’s management talked up Chau as an “astute businessman”, watered down his links to Chinese triad crime gangs and believed he was of good repute until as late as 2021.
More troubling, the inquiry heard that Chau’s Suncity junket was caught exchanging bundles of cash from backpacks for gambling chips in a gaming room known as Salon 95 at the Pyrmont casino, breaching state money laundering laws. But instead of banning Chau and his associates, management moved them to a “secret” room.
Chau pioneered the junket industry that brought high rollers from China to gamble in Macau – the only place in the country where casinos operate legally – and other parts of the world, with Australia a top destinations.
At its peak, junkets contributed the bulk of revenue in Macau – a former Portuguese colony, which boasted a pre-pandemic casino industry bigger than Las Vegas.
But Chau’s downfall has coincided with Beijing’s anti-corruption drive, which has included much closer scrutiny of corrupt officials who might travel to Macau to place bets and launder money.
Prosecutors charged Chau, 48, with 289 counts of fraud, money laundering and illegal gambling. On Wednesday, Macau’s Court of First Instance found Chau guilty of fraud, running a criminal syndicate and operating illegal bets.
But it acquitted him on the money laundering charge.
Suncity under Chau’s leadership “conducted illegal gambling for unlawful gains for a long time”, she said in her ruling, and sentenced him to 18 years behind bars.
The trial began in September and centred on alleged under-the-table bets worth $HK824bn ($151bn) over eight years, which defrauded Macau of tax revenue exceeding $HK1bn.
Chau, who was charged alongside 20 co-defendants, was also accused of facilitating proxy betting for Chinese customers to gamble remotely in casinos based in Southeast Asia. The defence acknowledged that under-the-table betting existed in Macau, but pointed to the lack of direct evidence implicating Chau, Suncity executives or employees.
Despite NSW police charging people with dealing with the proceeds of crime in Suncity’s gaming salon at Star’s Pyrmont casino, the company continued to deal with Mr Chau and his associates.
Concerns about Suncity flouting casino protocols were raised in May 2018, when Star senior investigator Andrew McGregor wrote to management that “we have an entity within our four walls, which is totally non compliant to reasonable requests for basic information”. “I’m going to call it out early. Suncity is operating a business model under our noses, which is problematic for Star Entertainment Group with regard to (anti-money laundering, counter-terrorism financing) laws.”
The inquiry was shown CCTV footage of a man taking a backpack full of cash and exchanging it for casino chips at salon 95’s Suncity service desk, using it as a “pseudo cage”, breaching strict casino protocols. This presented three risks: Suncity was performing a service without Austrac registration, someone other than the casino operator was running casino services, and the facilitation of money laundering.
In June 2019, weeks after Star group manager due diligence and intelligence, Angus Buchanan, began his employment at the company he alerted senior management to Mr Chau and Suncity co-owner Chen Tin Kong’s links to Chinese triads, emailing them a copy of a report he had compiled while working at the Hong Kong Jockey Club.
But Star’s former financial crime and investigations boss, Kevin Houlihan, told the inquiry that he recommended the group continue to allow Mr Chau and his Suncity associates into the casino – subject to “six mitigation strategies”.
This was despite Mr Buchanan writing in another report in October 2020 that Mr Chau was “most likely to have been conversant with the money laundering activities his Suncity staff engaged in at both the Star and Crown properties”.
But Mr Houlihan said: “I didn’t agree Mr Chau was conversant with those operations, but don’t have that knowledge”.
Counsel assisting the inquiry Naomi Sharp SC asked Mr Houlihan on what basis did he form that view. He replied he didn’t have evidence, despite receiving the report from Mr Buchahan, who had investigated Chinese organised crime for 30 years.
The report was later changed to add: “Mr Chau appears to be a respected figure across Southeast Asia and enjoys the reputation of being a successful and astute businessman”.
Mr Buchanan prepared three drafts of a report about Star’s relationship with Suncity, prompting criticism that management forced him to “water it down”.
It was only in late 2021 after Macau’s police arrested Mr Chau after a two-year investigation, which uncovered an alleged illegal gambling syndicate and money laundering, that Mr Houlihan changed his recommendation. This was despite Mr Chau’s criminal links being also aired in the NSW Bergin inquiry into Crown Resorts a year earlier.
Casino regulators in NSW and Queensland each fined Star $100m late last year, while Austrac had launched separate action against the company.
Addressing the Macau court in December, Chau said his company had never run into legal trouble in more than a decade of operating VIP rooms in casinos worldwide. “I don’t know why (Suncity) is deemed a criminal syndicate,” Chau said, according to local media. “My colleagues have not seen a cent of criminal proceeds up until now … We have never paid additional compensation for illegal acts.”
Chau’s legal woes began in November 2021 when authorities in the mainland city of Wenzhou issued a warrant for his arrest for running an illegal gambling syndicate. Macau's authorities then arrested him and other senior company executives two days later, but chose to charge them locally, citing a concurrent investigation based in the city. Macau has a separate legal system from the Chinese mainland, largely based on Portuguese law.
In September, a court in Wenzhou convicted 36 people related to Chau and Suncity based on allegations that partly overlapped with the Macau case. After the arrests, Suncity shut down all its VIP rooms and a number of casino operators followed suit, some also citing Covid-related business pressures. It signalled a shift in Macau’s gaming industry as the government strengthened its regulatory muscle with Beijing’s backing, which took the form of a legal amendment last June.
Additional reporting: AFP
Originally published as Macau convicts ‘junket king’ Alvin Chau – the man who ran a casino within a casino at Star Entertainment
BHP offers $44bn deal in Samarco settlement
A deal could be signed as soon as Friday, days after the start of a separate class action in the UK that involves about 650,000 Brazilian claimants.
What’s next in tech? Three big thinkers on some really big ideas
What’s next in innovation? Where will the big advances come from? We asked three leaders in their fields to identify the breakthroughs on the horizon for The List: Top 100 Innovators 2024