By Lucy Cormack
Star casino’s senior regulatory officer did not update a “satisfactory” rating of a notorious junket operator even after he was told money was potentially being “secreted” in the coat pockets of men into an exclusive gaming room.
Graeme Stevens on Friday told an inquiry he should have updated a May 2019 report about Chinese “junket” operator Suncity after he received an email with concerns about hidden money and a lack of surveillance.
Suncity was given access to a private gaming room in 2016 for its customers, provided they used Star’s “cage” to purchase or cash in gaming chips, which the inquiry has heard it did not do.
CCTV footage shows Suncity staff dealing with large amounts of cash in the junket’s private gaming salon at The Star Sydney, which one casino executive has said was probably money laundering.
“We know the money is leaving the cupboard,” wrote an internal investigator in the June 2019 email reviewing the operator’s exclusive use of the Salon 95 gaming room.
“There was no way of knowing how the money is getting into the cupboard unless it is being secreted in the male coat pockets via smaller amounts.
“There was some obvious movements, on occasion, of three persons going into the cabinet with the door shut. In such a confined space it appeared ridiculous.”
Mr Stevens, now the group compliance manager, said he did not update his report from one month earlier because it had already been circulated. He conceded the business may have relied on his “satisfactory” finding and not responded to the risks raised.
The inquiry heard the report was still being utilised to support continuing a Star-Suncity relationship in January 2021.
The royal commission-style inquiry into Star’s casino licence heard Suncity sought to install branded signage, water bottles, ashtrays and lighters in Salon 95, where bundles of cash were handled in breach of money laundering regulations.
Mr Stevens said he had concerns in 2019 that branding would make the exclusive suite look like “a Suncity casino and not the Star”.
“I felt that was moving it away from a room we controlled and becoming the property of Suncity. Staff working in that room would ... think different rules apply,” Mr Stevens said.
However, the inquiry has heard Suncity staff had already been operating a cash service desk for patrons despite having no licence to do so.
Mr Stevens conceded it was “entirely improper and inappropriate” to allow cash transactions in Salon 95 and was shown CCTV footage in which bundles of cash were brought in, separated and carried out of the private room.
Star was aware of multiple similar incidents, triggering two “warning letters” to be sent to Suncity. However, its exclusive use agreement was renewed in June 2018 and the minimum monthly non-negotiable turnover in the private salon was doubled to $100 million. Its relationship with Star continued until October 2020.
Mr Stevens agreed it was “wholly inappropriate” that the operating relationship continued and said it should have been terminated.
The Hong Kong-based Suncity was the world’s largest “junket”, bringing ultra-wealthy Chinese gamblers to Australian casinos. Its dealings with Star and rival casino Crown Resorts became a major scandal in 2019 when this masthead revealed its ties to powerful Asian crime syndicates.
Mr Stevens on Friday said the casino was aware Suncity did not have appropriate anti-money laundering and counterterrorism financing programs in place and that it did not hold a casino licence.
He said senior management was also aware cash transactions were happening at Salon 95, “at least general counsel, if not above,” and agreed the casino did not have oversight over the exclusive suite.
Star’s general counsel and senior leadership team are yet to give evidence to the inquiry.
The inquiry also heard an internal investigation was conducted into Salon 95 in May 2018, titled “Operation Moneybags,” which observed cash being carried in and out in suitcases and backpacks, including by a Suncity limousine driver.
Mr Stevens agreed the findings showed Star had very little control over what was happening in Salon 95. He was later shown CCTV exposing individuals linked to Suncity consciously moving into a “blind spot” on the balcony of Salon 95 to avoid security cameras, which he conceded was “concerning”.
The inquiry before Adam Bell, SC, continues.
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