Star Entertainment used private jets, yachts to cover Chinese funds transfer, court told
Star Entertainment executives suggested using receipts for private jets, yachts and diamonds to prove funds were not being transferred from China to its casinos for prohibited gambling.
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Star Entertainment executives suggested using receipts for private jets, yachts and diamonds to show funds were not being transferred from China to its casinos for prohibited gambling purposes, the Federal Court has heard.
ASIC chief counsel Ruth Higgins told the court that former Star financial officer Harry Theodore and chief counsel Paula Martin in 2019 were asked to respond to China Union Pay concerns that fund transfers using CUP cards were in fact for gambling.
At the time China was in the middle of a gambling and corruption crackdown.
Dr Higgins is opening a six-week hearing which will detail allegations that 10 former Star executives and directors breached money-laundering controls and corporate fiduciary duties in the period between 2016 and 2022.
Dr Higgins said at one stage a Star executive involved in preparing a response to CUP attached a sample of high-value invoices covering aircraft charter, premium wine, diamonds, tourism activities, tours, vessel hire and golf days to both Mr Theodore and Ms Martin.
“So plainly at this point, Star employees are considering what documents could be collated to support the notion that CUP cardholders were expending large sums on a variety of high-end goods and services, as opposed to gambling chips,” Dr Higgins said.
She said Mr Theodore’s request to remove a reference to gaming facilities from the response to CUP “indicated that he understood that the purpose of Star’s proposed communication was to convince those entities that CUP cards were not being used to gamble at Star properties”.
Dr Higgins said that in 2016 China had launched a “very public and very aggressive crackdown” on all forms of gambling in China, adding that in October of that year several Crown employees had been arrested for alleged gambling offences.
“It’s a very significant issue for Star and from this point onwards the climate in respect of gambling in China changes very dramatically for everyone,” she said.
“CUP had made it clear to NAB that its position was that its rules prohibited the use of CUP cards for any transactions relating to the purchase of gambling chips, including going to a hotel and getting an effective cash advance on the account in the form of gaming chips.”
Dr Higgins tendered several CUP transaction receipts from 2019 of between $290,000 and $450,000 that did not show what goods and services were paid for.
Earlier, the court heard that former Star chief executive Matt Bekier had shrugged off concerns about alleged Asian money laundering at the company’s casinos, saying the operation was “run in a very clean and legal way”.
Mr Bekier told a newspaper in August 2019 that Star would continue to use Macau-based junket operator Suncity despite media reports of its alleged links with criminal figures.
She said Mr Bekier said Star was run in a “very clean and legal way” and when pressed if it would continue the relationship with Suncity he replied “why not”.
“Money launders do not operate in Australia is the view expressed here,” Dr Higgins said.
The court heard that National Australia Bank had rejected a request from Star in 2016 to install cash machines at its Queensland casinos because of concerns that prohibited funds would be funnelled from China.
Suncity was by 2018 operating from an exclusive high-roller room in Star Sydney known as Salon 95, where staff had already reported numerous suspicious transactions.
Dr Higgins told the court earlier that Star executives had responded with “glacial inertia” to reports Suncity was flouting strict cash-handling regulations at Salon 95.
In one incident, a non-participant in the Suncity junket was able to collect $45,000 from the service desk. On other occasions, CCTV footage showed large amounts of cash being dropped off at the desk in a red suitcase, brown paper bags and a blue Esky.
Mr Bekier appeared to downplay the role of gambling at Star, telling one newspaper that international visitors wanted to get “on the harbour, take photos of the bridge, bring their families and their entourage”.
“It’s a tourism experience,” he said. “Yes, they like to gamble as part of the experience, but it cannot be the only reason.”
Dr Higgins told the court that by this time Mr Bekier “knows about what has in fact been happening in Salon 95”.
Star Entertainment’s board was sent media reports in 2019, highlighting investigations into the alleged criminal links of Suncity
Dr Higgins said then Star chairman John O’Neill forwarded various articles from the Sydney Morning Herald about the investigation to non-executive directors.
By then, Suncity was one of Star’s biggest revenue providers as a wave of money from China flowed to Australian casinos.
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