By Lucy Cormack
After 36 online hearings, more than 30 witnesses and hours of off-camera deliberations, an inquiry will now determine if Sydney’s Star casino is suitable to hold a licence.
Alleged money laundering, criminal infiltration and fraud all took centre stage at the probe which claimed the scalps of a slew of Star executives, not least that of former boss Matt Bekier.
Claims of “sham” documentation, notorious VIP junket operators running a casino within the casino and an executive culture that placed profits over probity will factor in the considerations of Adam Bell, SC, who has overseen the public inquiry since March and whose report is due by August 31.
Counsel assisting the inquiry Naomi Sharp, SC, this month closed her submissions arguing that Star Entertainment Group and its close associates were not suitable for a casino licence.
And the casino’s board, she said, is only grasping the extent of its “unsuitable associations and uncontrolled money laundering risks” because of the revealing public review. She will deliver her final reply submissions on Monday.
Here’s a look back at all that we have learnt through the inquiry.
Chinese debit cards used to gamble
The first day of public hearings heard explosive evidence that Star disguised $900 million worth of Chinese debit card gambling transactions as hotel expenses and then lied to banks in an attempt to conceal the massive fraud.
Senior staff created “sham” hotel invoices for “dummy rooms” to disguise the transactions, while the debit cards brought in at least $10-20 million from high-roller patrons every month. Billionaire property developer Phillip Dong Fang Lee was the casino’s largest user of the CUP process, accounting for $100 million of the transactions, despite giving evidence he never once stayed at the hotel.
Phillip Dong Fang Lee
The high-roller and billionaire property developer turned over more than $2 billion at Star in the 14 years to 2021. On one occasion in 2015, he swiped almost $12 million in 14 separate transactions within minutes.
The inquiry heard concerns were held as early as 2015 that Lee was allegedly engaging in money laundering, but staff prioritised the making of money from him over compliance with its own rules.
Junket operator Suncity and “Salon 95”
Suncity was the biggest junket operator, bringing ultra-wealthy Chinese gamblers to Star and its rival Crown Resorts until this masthead revealed in 2019 that it had clear links to organised crime.
Star’s top legal officer warned a senior executive there was an “unacceptable risk” that Suncity was laundering money in May 2018. It continued to run a private gaming salon at the Pyrmont casino for more than a year after evidence of dirty cash dealings emerged, the inquiry heard.
Billionaire Chinese businessman Alvin Chau was the boss of Suncity. He enjoyed an $80 million cheque cashing facility at Star and maintained business with the casino despite warnings of his links to triads. Chau was arrested in Macau in November last year as part of a Chinese crackdown on gambling.
The Hong Kong Jockey Club report
The inquiry heard Chau was described in a 2018 report about Suncity as a “threat” who would pose “tangible criminal ... reputational risks” for the Hong Kong Jockey Club. Multiple senior executives were in possession of the report. Sharp said it was a matter of serious concern that Star did not share allegations levelled against Chau when asked for a briefing by the board and that it continued to deal with the junket in light of the claims.
The KPMG reports
The review heard Bekier furiously rejected a KPMG audit that found his company was failing to tackle money laundering, before the group re-hired its authors in an attempt to water down their damning report. Star later erroneously claimed legal privilege over the 2018 KPMG report to hide it from the financial crimes watchdog. Bekier denied that he sought to persuade KPMG and said he was frustrated but “not rude and aggressive”.
Overseas payment channels
The Star’s lawyers conceded the gaming giant employed a “deficient” operating procedure that allowed overseas deposits to be made without authorisation from late 2017 to October 2021. Kate Richardson, SC, said the casino failed to conduct probity checks on $70 million in gambling debt repayments over four years, opening its door to increased money laundering and terrorism risks.
Star used the payment channels from 2019 to help overseas customers disguise cash payments to the casino, after the Bank of China shut down its Macau bank account because it would not touch gambling funds.
Former boss Matt Bekier
Bekier blamed his senior executive team for letting him down and giving way to the “dark art” of VIP gambling, but said the casino’s failings were ultimately his responsibility. He resigned as chief executive shortly after the inquiry began, before he gave evidence. He said he believed the culture of the company at large was good, but there was “a subculture that has let us down”.
Former chairman John O’Neill
O’Neill acknowledged the recognised failures within the casino, as well as a disregard for regulators, but said they were largely contained in Star’s international rebate business for VIP players. He said the inquiry had been “a cathartic moment”. Completing three days in the witness box he insisted: “You can’t waste a moment like this [inquiry]. There has to be significant good to come out of it”.
What Star’s lawyers say
In closing, lawyers for the gaming giant said it had already triggered a dramatic overhaul in response to the inquiry. Richardson said that while the casino was not suitable to hold a licence when the review began, it was now, after sending a “powerful message” with a mass clean-out of senior executives. She said evidence had exposed significant failings and misconduct, but that Star had committed to a “reformation” to guard against such failures occurring again.
What does “reformation” look like?
Richardson said the casino giant had started implementing a number of renewal programs, including reviewing whistleblower protections and engaging third-party experts to recruit senior staff. Star has also split the probity and risk functions from the chief legal and risk officer role and will appoint a separate chief risk officer. Junkets are also now banned from casinos.
Editor’s Note: After this article was published, counsel assisting the inquiry Naomi Sharp, SC, stated that the inquiry is not in a position to make a finding that Phillip Dong Fang Lee engaged in money laundering.