Inside Star Entertainment’s complicated relationship with Macau ‘junket king’ Alvin Chau

Despite detailed links to Chinese triads and money laundering arrests, Star Entertainment is yet to formerly sever ties with ‘junket king’ Alvin Chau.

In an internal report, Star said Alvin Chau was an “astute businessman”. Picture: David Paul Morris/Bloomberg via Getty Images

On a colder-than-average August day in Sydney last year, Star Entertainment’s chief legal officer Paula Martin met with senior managers to discuss phase one of what they called Project Congo.

There had been several projects with similar exotic codenames following a NSW inquiry’s explosive findings that Star’s bigger rival, Crown Resorts, had facilitated money laundering and other organised crime.

In an email before the Star meeting, Martin and other attendees – including chief casino officer for NSW, Greg Hawkins, and international casino marketing president Chris Peasley – circulated a spreadsheet containing the names of “non-excluded patrons”. A rogues gallery of sorts.

High on the list was Alvin Chau, known as the Macau junket king who had generated millions of dollars for Star and Crown by attracting cashed-up gamblers via his VIP tour groups.

During the Crown inquiry, Chau’s links to China’s 14K Triad criminal gang were revealed in various dossiers, including US government reports. But that was not entirely news to Star. A year earlier in June 2019, Angus Buchanan started at the company as its new due diligence manager and sent to Martin and other senior executives a report he wrote while working at his previous employer, the Hong Kong Jockey Club, detailing Chau and his Suncity junket’s criminal links.

Buchanan, a former Scottish policeman, had sent the report to show his new bosses at Star what a “mature due diligence” function could achieve. He had investigated Chinese organised crime for more than 30 years, and his meticulous findings into Suncity – Star’s biggest junket earner – should have been a bombshell on any score.

But Martin and other executives who received the report have told a royal commission-style inquiry into Star that they cannot recall when they received or read it. One, compliance manager Skye Arnott, even admitted she shredded it.

Star had been doing business with Chau and Suncity since 2011 and the junket had delivered the company millions of dollars in gambling turnover. It had also become a thorn in the company’s side. In May 2018, Suncity staff were caught on CCTV exchanging bundles of cash from backpacks for gambling chips at an exclusive gaming salon at Star’s Pyrmont casino, flouting NSW laws and sparking a significant money-laundering risk.

Star later issued two warning notices to Suncity. They didn’t work. And in May 2019, Suncity staff were back at it, bringing in bundles of cash in suitcases, backpacks, green reusable shopping bags, even letting non-junket members play in their exclusive gaming room, effectively operating a “casino within a casino”. It was “out of control”, as one of Star’s staff said at the time.

Despite Buchanan saying it was unlikely that such suspicious behaviour would occur without Chau’s “acquiescence”, Star continued to believe he was of “good repute”. Management even moved him to another “secret” gaming salon, which contained Suncity branding only on television screens, making it easy to switch off. When asked why Star was continuing to business with Suncity in mid-2019, former chief executive Matt Bekier replied: “Why not?”

In August 2021 – seven months after Patricia Bergin released her damning findings into Crown – Hawkins and Peasley and others were set to finally make a call on Chau.

At the meeting, they discussed the “outcomes of phase one of Project Congo”. It presented two options regarding Chau: ceasing Star’s relationship, or continuing to allow him at its casinos.

The report, “directed” by Martin and written by two of her subordinates – Star group counsel Andrew Power and financial crimes boss Kevin Houlihan – said an audit of Suncity completed in May 2019 “provides some comfort” that it is “capable of operating a compliant junket”.

It made no reference to subsequent breaches in May, June and July 2019 or that Star possessed a copy of Buchanan’s Hong Kong Jockey Club report about Chau’s Triad links.

Furthermore, it stated that “Star could reasonably argue that evidence” from the Bergin inquiry “did not substantiate” Chau as “ever being a member of a Triad group nor that he has or has had any involvement in organised crime as such other than rumours and innuendo”.

“There is no irrefutable evidence, which may prevent the staff from continuing to engage with the patron. The patron is generally perceived as being a respected, astute business businessman who does not have any criminal convictions and who can be regarded as being of good repute,” it said.

It also followed the completion of a separate due diligence report by Buchanan into Suncity and Chau that went through several drafts between October 2020 and February 2021, and which Power and Houlihan denied was “watered down”.

Star consequently did not ban Chau and is yet to formally do so, despite Macau Police arresting him last December after a two-year investigation uncovered an illegal gambling syndicate and money laundering.

Martin told the Star inquiry on Thursday that she could not recall receiving a copy of the phase one Project Congo report.

Counsel assisting the inquiry, Naomi Sharp SC, said: “Surely, you would take care to read documentation of direct relevance to review that you have directed? Given the significance of this meeting, do you agree that the prudent course of a senior lawyer would be to request a copy of any written briefing notes that exists so you may fully inform yourself?” Martin replied: “Not necessarily.”

Sharp suspects the Project Congo report – and its omission of Chau’s Triad links – was commissioned to create a “misleading audit review in the event regulators came looking”. It’s a charge Martin denies.

Sharp also asked Martin on Thursday: “Is it really the position that Star continues or continued to deal with junket operators and would continue to deal with these people in the future because they bring in so much money regardless of what adverse information [Star possessed]?” It was another charge Martin denied.

There is no doubt that Star’s relationship with Chau is complicated, made more so by his business dealings with two of the company’s significant shareholders and casino development partners, Far East Consortium and Chow Tai Fook.

Star has partnered with Chow Tai Fook and Far East Consortium on more than $5bn worth of developments, including Brisbane’s Queen’s Wharf. Suncity has partnered with Chow Tai Fook to build a $4bn casino along a 3km stretch of coastline at Hoi An in central Vietnam.

Sharp suggested the reason why Martin was reluctant to give negative evidence about Chau or Suncity was the Vietnam casino partnership. “I’m not sure Ms Sharp I have the entity details on that. I’m not sure I have the specific details,” Martin said.

Regardless, Star’s former president of international marketing, Marcus Lim, highlighted Chau’s links to Chow Tai Fook and Far East Consortium to two of Star’s anti-money compliance managers, Skye Arnott and Micheil Brodie, ahead of a risk assessment into Suncity in April 2018.

Brodie assured Lim that the risk assessment would not “slow down the implementation of the arrangement” to grant Suncity the exclusive use of a gaming room, known as Salon 95, at Pyrmont. Brodie told the inquiry into Star on Thursday that although he was aware of a “number of joint venture arrangements” between Star and Chow Tai Fook and Far East Consortium, the intimation in Lim’s email was “regarded as a significant question for me at all”.

“I wouldn’t have allowed the conduct of the risk assessment to be done anything other than at the pace that it needs to be completed,” Brodie said.

But despite later preparing an anti-money laundering compliance report for Star’s board, Brodie – who was chief executive of the NSW Independent Liquor and Gaming Authority from July 2013 to November 2017 – said he was not made aware the Hong Kong Jockey Club’s full details.

“I don’t recall having received any of this level of detail,” he said.