Star report talked up Alvin Chau as an ‘astute businessman’, ‘watering down’ Chinese triad links

The gaming group’s financial crimes and investigations boss continued to believe Chinese junket operator Alvin Chau was a person of ‘good repute’ until late last year.

A Star Entertainment report said Alvin Chau ‘appears to be a respected figure across Southeast Asia and enjoys the reputation of being a successful and astute businessman’. Picture: Gaye Gerard/NCA Newswire

Star Entertainment believed Alvin Chau, boss of Chinese junket operator Suncity, was of good repute until as late as 2021, dismissing a Hong Kong Jockey Club report that revealed his links to criminal gangs, an inquiry has heard.

Despite police charging people with dealing with the proceeds of crime in Suncity’s exclusive gaming salon at Star’s Pyrmont casino, the company continued to deal with Mr Chau and his associates.

And although its own general manager Angus Buchanan compiled the Hong Kong Jockey Club during his time there, Star’s financial crime and investigations boss, Kevin Houlihan told a royal commission-style inquiry that he recommended the group continue to allow Mr Chau and his Suncity associates into the casino – subject to “six mitigation strategies”.

This followed Mr Buchanan writing in another report in October 2020 that Mr Chau was “most likely to have been conversant with the money laundering activities his Suncity staff engaged in at both the Star and Crown properties”.

However, Mr Houlihan said: “I didn’t agree Mr Chau was conversant with those operations but don’t have that knowledge”.

Counsel assisting the inquiry Naomi Sharp SC asked Mr Houlihan on what basis did he form that view. He replied he didn’t have evidence, despite receiving the report from Mr Buchahan, who had investigated Chinese organised crime for 30 years.

The report was later changed to add: “Mr Chau appears to be a respected figure across Southeast Asia and enjoys the reputation of being a successful and astute businessman”.

It was only in late 2021 after Macau’s police arrested Mr Chau after a two-year investigation, which uncovered an alleged illegal gambling syndicate and money laundering that Mr Houlihan changed his recommendation. This was despite Mr Chau’s criminal links being also aired in NSW Bergin inquiry into Crown Resorts a year earlier.

Australian casinos are legally obliged to only deal with patrons who are of good repute.

In June 2019 – before the Bergin Inquiry – Mr Houlihan and other senior management at Star received the Hong Kong Jockey Club report – which stated Suncity had “demonstrated links” to Chinese triads – from Mr Buchanan.

That report also revealed that Australian law enforcement agencies suspected Suncity of “large scale money laundering activities in Australia” to the tune of $2m a day between 2013 and 2015.

But Mr Houlihan said his own law enforcement “contacts” told him after he received the Hong Kong Jockey Club report that they did not have an “active interest” in Suncity or whether the junket operator was laundering money at The Star.

“You weren’t able to exclude the possibility that other people involved in law enforcement had this interest?” Ms Sharp said.

“Correct,” Mr Houlihan replied.

He also said he did not share the Hong Kong Jockey Club report with the NSW gaming regulator, saying it was not his report to share.

“Surely you appreciated that this document would be relevant to anybody who had a concern about the probity of Suncity or Alvin Chau?” Ms Sharp said. Mr Houlihan agreed but maintained the document was shared with him and others at Star confidentially.

Police later charged people over dealing with the proceeds of crime during 2018 and 2019 at Salon 95 at Star’s Pyrmont casino. But Mr Houlihan said that did not necessarily mean engaging in money laundering, despite one of his investigators describing the charges as that.

“It’s a trigger that could be related to money laundering,” he said.

In an email circulated among senior management, Star said it had reached a “mutual decision” to terminate its agreement with Suncity regarding the exclusive use of gaming salon 95. Instead, it moved them to Salon 82, which only contained Suncity branding on television screens.

Mr Houlihan asked Mr Buchanan to prepare a report about Suncity and Mr Chau. In his draft, completed in October 2020, Mr Buchahan wrote “Star’s response was somewhat weak, and not proportionate to the risk”.

Mr Houlihan said he did not agree with that statement, saying he had more visibility on Suncity than Mr Buchanan. When Ms Sharp asked Mr Houlihan why he didn’t write the report himself, he said he wanted a view independent of him and Star’s general counsel Andrew Power.

This was despite Mr Power marking up a copy of the draft, striking out statements, including the “allegations made against Suncity, should have merited a stronger AML CTF (anti-money laundering, counter-terrorism financing) response” and that “future non compliance would not be tolerated and may lead to the voiding” of Suncity’s agreement with Star.

Mr Houlihan dismissed accusations that Mr Buchanan was ordered to “water down” his report, saying Mr Power merely made “suggestions”.

“There was a discussion about making it more succinct and shorter but not to change the context of it,” Mr Houlihan said.

A later version of the report added that “Mr Chau appears to be a respected figure across Southeast Asia and enjoys the reputation of being a successful and astute businessman”.

Mr Houlihan’s evidence follows The Weekend Australian revealing on Saturday the nation’s financial intelligence agency Austrac conducted an extensive compliance audit of Star’s Sydney casino while officials were engaging in illegal gambling transactions but failed to uncover the impropriety.

The only matters raised by Austrac included trivial matters such as the wording of policies concerning customer verification for a gambling payout.

The inquiry continues.