NAB link to Star casino’s dodgy debit cards

NAB executives helped The Star casino in Sydney create a method for international gamblers to transfer money out of China and withdraw it in Australia without any scrutiny.

Sydney’s Star casino. Picture: Bloomberg

National Australia Bank executives helped The Star casino in Sydney create a method for international gambling clients to transfer money out of China and withdraw it in Australia without any scrutiny, but overlooked repeated concerns raised with the bank that these transactions were being used to fund gambling.

An inquiry examining Star Entertainment Group’s suitability to continue holding its casino licence, among a range of other matters, heard evidence on Friday confirming that some NAB officials were involved in creating the loophole for money transfers as far back as 2013.

The inquiry has already heard that $900m had been brought into Australia using a debit card that was issued to international clients who disguised their gambling spending as expenditure on hotels, a method that was completely opaque to law enforcement.

Casino patrons were provided with a debit card known as China Union Pay, owned by a Chinese ­financial services company called China Union, which raised concerns about the spending with NAB and at one point threatened to stop use of its cards at The Star.

The China-based company contracted NAB to supply merchant terminals at The Star’s various hotels; these were located in hotel areas and away from casino floors because the use of the cards for gambling purposes ran against their terms of use.

Patrons would swipe their card at the terminal, enabled by staff, who would enter a merchant code for “hotel services” and print off a voucher that could be redeemed on the casino floor, a method used by The Star and known to some NAB officials, the inquiry heard.

An email read out during Friday’s hearing established that a NAB official, Andrew Haberley, wrote to The Star’s regulatory manager David Aloi in March 2013 with advice on how the machines could be used to disperse funds to casino playing accounts.

Mr Haberley said he had sought advice confirming there would be a 24-hour delay in transactions logged at the terminal, but “once the funds hit accounts after 24 hours you can disperse them accordingly to the casino’s operating straight playing accounts”.

China Union later began querying more than 150 transactions logged with the machines because of their absurdly high cost for hotel expenditure and concerns that these transactions may have actually been used to fund gambling activity.

Law enforcement agencies generally attempt to be informed of such transactions because of the risk that gambling activity can be used to launder criminal profits.

The system created by NAB and enabled by The Star effectively skirted ordinary reporting requirements to these agencies.

Mr Haberley has not been called as a witness to the inquiry although Mr Aloi is scheduled to ­appear next week. Tanya Arthur, who heads NAB’s diversified industries and technology sector, told the hearing she had been unaware of Mr Haberley’s email or its contents until a few months ago.

Despite China Union flagging transactions that appeared suspicious, she said Star officials assured her the hotel spending was legitimate. “We were asking The Star to substantiate a number of transactions … and I believed the answers provided to me at the time,” Ms Arthur said.

Two Star officials have confirmed they misled NAB about the CUP card spending, stating that they acted at the behest of company executives.

One witness, Sarah Scopel, a former group treasurer at The Star, agreed with the proposition that her responses to Ms Arthur’s queries sought to “distance the use of these cards” from their intended purpose of funding gambling.

The inquiry continues.