Crown board ‘in the dark’ on junkets, NSW inquiry hears

Crown Resorts executive admits its board could have been better informed about public legal cases revealing money-laundering through its casinos.

Crown’s internal controls were not reviewed by the VCGLR in the wake of media allegations about organised crime, a NSW inquiry has heard.

A Crown Resorts executive has admitted its board could have been better informed about public legal cases revealing money-laundering through its casinos before its directors signed a bombshell newspaper advertisement last year rejecting claims Crown failed to conduct adequate due diligence on its junket partners.

A series of media reports in July last year alleged Crown’s lax risk management practices allowed it to partner with junket operators with links to drug traffickers, money launderers, human traffickers and organised crime groups.

It also alleged those junket operators had criminal connections to an organisation called “The Company”.

Appearing before a NSW government inquiry on Thursday, Crown chief legal officer Joshua Preston was shown a series of legal judgments and media reports by counsel assisting the inquiry, Naomi Sharp SC, revealing some of Crown’s junket partners had been identified as alleged criminals or parts of triad gangs.

 

Some involved Melbourne financial adviser Roy Moo, who had an arrangement with The Company where he would allegedly launder cash through Crown to Hong Kong.

After Mr Moo was jailed in 2013, “The Company” began to rely on a new in-house junket known as The Hot Pot, named after a Macau hot pot restaurant chain, that was licensed by Crown.

Mr Preston maintained that Crown was not previously aware of links between Mr Moo, The Hot Pot and The Company following an internal investigation.

Mr Preston was asked at the end of the hearing by inquiry head, former Supreme Court justice Pat­ricia Bergin, if it “would have been helpful if the board had understood that Crown had had a series of, at least, cases where money laundering had occurred through its casino and that money had been linked to drug trafficking” before it released its advertisement in August last year rejecting the allegations.

“When you go on the front foot … it is necessary to make sure that the Achilles heel is exposed before you do it, isn’t it?” she asked.

Mr Preston said: “Given what I have now seen recently, having that information at hand would have been definitely relevant.”

She asked: “I suppose if you had your time over you would like do the exercise Ms Sharp has done to ensure the board was appraised of all these matters before the ASX release (of the advertisement)?”

He replied: “Going through the task Ms Sharp has taken me through, yes it would have been.”

Mr Preston, who is responsible for legal and regulatory compliance at the James Packer-backed casino giant, earlier told the hearing that Crown made no contact last year with law enforcement authorities to investigate the media allegations.

He said he did “not know” why he did not contact authorities or hire an investigator to check the veracity of the allegations after they were published in the media.

Asked by counsel assisting the inquiry if he could have taken a more proactive approach in pursuing the allegations, Mr Preston replied: “Yes, I could have.”

He also said no members of the Crown board instructed him or any other staff member to contact law enforcement authorities.

Mr Preston said he had asked members of Crown’s anti-money-laundering team to check for any reference to “The Company” in its database. None was found.

He also said he raised the allegations relating to The Company with Crown’s Australian Resorts chief Barry Felsted and other members of the group’s legal team.

In the newspaper advertisements defending the company, Crown categorically denied it had any dealings with or “any knowledge of an organisation of that name or description”.

“Our view was based on the records that we had and the inquiries we made within our business as to any reference to an entity called The Company and the answer was unequivocally ‘No’,’’ Mr Preston told the inquiry.

He also said the media reports in July last year did not trigger a review of Crown’s internal controls in relation to junkets by the Victorian Commission for Gambling and Liquor Regulation.

While under the law Crown is responsible for reviewing the probity of junket partners, the VCGLR can review those processes when “significant issues” arise.

The NSW Independent Liquor and Gaming Authority on Monday resumed its public hearings that are considering whether Crown should retain the licence for its $2.4bn casino in Sydney. The hearings continue on Friday.