Star Entertainment let billionaire gamble, prioritising ‘making money’, despite money laundering suspicions

Star casino staff suspected a VIP billionaire gambler of potentially laundering money but their concerns led to a ‘fairly deficient’ response from management.

Chinese Australian businessman Phillip Dong Fang Lee giving evidence at The Star independent review. Source: The Star independent review

Sydney’s Star casino “prioritised making money” from a billionaire VIP gambler, despite suspecting he was using its Pyrmont gaming complex to launder money, an inquiry has heard.

Property developer Phillip Dong Fang Lee drew millions of dollars more from his China Union Pay card than he needed for gambling at The Star, raising concerns from the casino’s cage staff, also known as cashiers, evidence given to a royal commission-style inquiry revealed.

But on the same day that Star chief executive Matt Bekier resigned, the inquiry heard that the casino’s chief financial officer Damian Quayle pressured staff to issue Mr Lee ‘winning cheques’ to preserve the group’s relationship with him.

In a two-day period in 2015, Mr Lee swiped $23m in two transactions on his China Union Pay card, despite a staff member saying “$2m would have sufficed for the amount he was playing”. At other times, the inquiry heard Mr Lee used “proxies” to access China Union Pay funds.

Counsel assisting the inquiry Penelope Abdiel asked Star’s regulatory manage David Aloi – who was cage and cash services manager until 2o19 – if he had “any concerns at this point around whether Mr Lee was potentially engaging in some kind of money laundering activity?” He replied, he did.

Despite the concerns, Mr Quayle wrote in an email to cage staff: “He (Mr Lee) is a $20m player and I don’t want to jeopardise The Star’s relation relationship with him. So I’m authorising you to pay him out”.

Management later slapped a $10m withdrawal limit on Mr Lee’s withdrawals, restricting subsequent withdrawals to $1m a day at 1.5 per cent commission.

“Would you agree that that is not a significant limitation imposed on Mr Lee’s. Having regard to the effect of his prior China UnionPay swaps, amounting to approximately $11m?” Ms Abdiel asked Mr Aloi, who agreed.

“And now you have Mr Quayle putting pressure on your subordinates to provide cash out to Mr Lee. And the only measures imposed on Mr Lee (are) at the bottom of this email that allow him to continue to withdraw.

“Would agree that this is a fairly deficient response to the … very serious concerns that have been raised.”

Mr Aloi agreed it was.

Ms Abdiel asked if The Star “prioritised the making of money from Mr Lee over compliance with its own rules?” Mr Aloi replied: “It would seem that way”.

Mr Aloi’s evidence followed Mr Lee telling the inquiry last week that he was “very happy” Star allowed him to use his China Union Pay card. Gambling in China is illegal and China Union Pay cards cannot be used for that purpose.

Counsel assisting the inquiry Naomi Sharp asked Mr Lee last Thursday: “So was the reason you were happy was you could use your China Union Pay card was that you could move money out of your bank accounts in China?”

“No, that was not the case,” Mr Lee said.

“The reason I was happy was that I could win money, win money from the casino because I’m enjoying gambling and also, if I lost at the time, I could repay debts, that was why I was happy.”

The inquiry also heard that during one $11m transaction on his China Union Pay card, The Star listed Mr Lee as staying at its hotel — complete with a room number — on a receipt for a 27-day period in April 2015. But, looking at a Mandarin translation of that receipt, Mr Lee — who gambled at The Star’s Sydney casino for 20 years, playing mainly baccarat — said, via a translator, that he never stayed at the hotel.

“I was staying at home. It was possible that the casino gave me some accommodation vouchers, but I did not stay, and I gave those vouchers to my friends,” Mr Lee said.

This followed Star’s assistant treasurer and former treasurer saying the casino operator concealed more than $1bn worth of highly suspicious banking transactions from NAB, contrary to anti-money laundering laws.

The inquiry continues on Tuesday.