The Star casino roped into Crown controversy over links to junkets

An Asian money launderer used a Star Entertainment casino account in Sydney to send more than $400,000 offshore in a transaction tracked by Australian Federal Police investigators.

The money was destined for Macau multi-millionaire casino tycoon, Alvin Chau, whose high-roller travel business, known as a junket, is licensed and paid huge commissions to lure the wealthiest Chinese gamblers to casinos.

The Star casino is being roped into similar allegations as those bedevilling Crown.Credit: Bloomberg

A 2018 report by Hong Kong gambling and racing authorities shows that in January 2012, federal police officers in Sydney identified two alleged money launderers making "a cash deposit of AUD$403,000 into an account at Star Casino in Sydney."

"The money was then immediately transferred to The Star Casino account of Alvin Chau," the report notes.

The revelations of the 2012 transaction are contained in a confidential report, and widen the focus on Australia's casino industry from just Crown Resorts, which has been at the centre of explosive revelations about its business dealings with junket operators with links to suspected Asian crime bosses and Chinese Communist Party influence agents.

Mr Chau has since been blocked from entering Australia, and the Hong Kong Jockey Club has banned his junket, Suncity, over its links to drug trafficking and money laundering.

But Star Entertainment, which runs Sydney's premier casino, The Star, has signalled it is still keen to do business with the junket. Asked on Thursday if he would continue to partner with Suncity, Star Entertainment Group's CEO Matt Bekier said "Why not?".

The Star chief executive Matt Bekier has defended the use of junkets in the gambling industry, and says he is confident that Star is running a "clean and legal" business. Credit: Dan Peled

"Suncity is the largest junket operator in the world ... and we work in a very prescribed and lawful way with junkets that are credible and have been approved, in some states, by the regulators."

When federal agents questioned a suspected money launderer in 2012 about the $403,000 transfer to Mr Chau's casino account, the man revealed that a Sydney crime figure, Benny Xiong, had told him "the money was for the boss" of a Macau entertainment business.

"It is assessed that this is a likely reference to the Suncity Group in Macau," the Hong Kong investigation report says, citing intelligence provided by Australian agencies in May 2017.

Eight weeks before Mr Xiong gave his direction to deposit funds into Mr Chau's Star casino account,  the federal police had raided Mr Xiong’s apartment after observing him launder $5 million in proceeds of crime via Sydney banks.

In April 2012, Mr Xiong pleaded guilty to dealing in proceeds of crime totalling $5,827,730, according to court files.

Mr Chau is not only Star royalty but is the chief executive of the biggest high-roller operation in the world.

But in an internal intelligence report in 2018, the Hong Kong Jockey Club reported that “Suncity Group's controlling entities ... [including] Alvin Chau ... pose tangible criminal and reputational risks to the club and indeed racing integrity in Hong Kong".

Alvin Chau, founder and chairman of Suncity Group Holdings.Credit: Bloomberg

Mr Chau’s Suncity Junket is listed on the Hong Kong stock exchange and they deny all allegations of impropriety. However, the Hong Kong Jockey Club report said: "Suncity key personalities have demonstrated links to numerous triad societies and organised crime figures", and that Mr Chau and a colleague were reportedly members of the 14K triad society.

The 2012 transaction involving Mr Chau and Benny Xiong at The Star in Sydney was among the key red flags raised in the Jockey Club report.

It is not the only crime-linked junket operator The Star shares with Crown.

Leaked Crown data from 2015 reveals how the Melbourne casino giant was seeking to lure a junket operator called Xie Xiongming from Star, where he was being paid millions of dollars in junket fees.

When Xie was subject to an attempted murder via stabbing in Sydney’s Hunter Hill in June 2016, NSW detectives pulled Xie’s financial records and discovered his deep ties to Star.

Mr Xie is now on remand in a Sydney jail after being charged by NSW police early last month with allegedly threatening a man with a knife and demanding the transfer of a $10 million property. He also has held senior positions in Chinese Communist Party influence organisations in Sydney since 2014.

Another high roller agent who had dealings with Star as well as Crown is Tom "Mr Chinatown" Zhou, an alleged organised crime figure and international fugitive running a junket and involved in Chinese government influence activities in Australia.

One source with knowledge of the situation told The Age and Herald he observed Zhou negotiate a deal with Star in the 2015-16 financial year that stood to make Zhou tens of millions of dollars.

While the focus over the past fortnight has been on Crown’s dealings — due to a vast leak of corporate data from its high roller operations, and damning claims made by one of its former Chinese employees — Star appears to be facing many of the same questions as its Melbourne competitor, albeit it on a smaller scale.

In a statement, The Star said it wanted to "make clear that junkets are legal" and, in Queensland, "all junket operators involved with The Star are approved to operate by the regulator".

The company said it had a comprehensive anti-money laundering and counter-terrorism financing program regularly reviewed by authorities, and a 2011 review of its licence showed by Gail Furness SC showed that The Star had been "co-operative at all times and compliant and willing to engage with AUSTRAC on its obligations".

Another, 2016 review found "junket programs appear to be conducted properly, honestly and with proper protections" by The Star.

In response to the revelations about Crown's VIP high-roller operations in Melbourne and Perth, the Australian Criminal Intelligence Commission and its state policing partners have started pooling information about crime and vice in the casino industry. It is almost certain that The Star casino and other Australian casinos will be scrutinised along with Crown, although multiple sources have confirmed that Crown is of greatest concern to authorities.

Star said it had not yet heard from the commission, but would cooperate with any investigation. Crown has denied all allegations of wrongdoing and described the Herald, Age and 60 Minutes investigation as a "deceitful campaign".

The NSW gaming regulator is now also probing the proposed sale of a portion of James Packer's shares in Crown Resorts to Hong Kong-based casino operator Lawrence Ho, along with the media revelations about Crown. The Victorian regulator announced late on Friday that it would cooperate with the NSW inquiry, and also shortly begin its probity investigation into whether Mr Ho and his associates are "persons of good repute, having regard to character, honesty and integrity and other matters".

A key question that will flow from the inquiries is whether casino companies and gaming regulators have done enough to keep crime and misconduct at bay in Australia's casino industry. Former NSW gaming regulator Chris Sidoti has his doubts.

"I hope this investigation [by the ACIC] provides for much more information than what is currently available," he told The Age and The Sydney Morning Herald. He singles out high roller junket agents as a key area of concern.

Last week, the Australian Criminal Intelligence Commission’s chief executive Mike Phelan warned that Australian casinos, through their dealings with junkets, are exposed to major criminal risks and pose “a significant money laundering risk".

Privately, senior Star managers have been gloating about Crown’s misfortune.

When Star’s Matt Bekier was questioned on Thursday about the rolling scandal, he appeared keen to keep the focus on Crown.

"I feel that what we do is both lawful and is executed in a way that should give us and our investors confidence that we are doing right," he said.

"We have a dedicated team of compliance officers who track everything ... we are being audited, like the banks and everyone else, so I feel pretty comfortable that we are doing a good job."