Star Entertainment’s senior management seems to have not been informed about the ongoing operations of the company’s Sydney casino with a controversial junket company. According to reports, bank inquiries associated with overseas transactions faced a delay, while the Australian gambling giant rushed to investigate the issue.
It now turns out that the testimony given by Star Entertainment officials during the investigation of the New South Wales (NSW) gambling authority could also be inconsistent with some documented evidence regarding a loan provider used by the company.
Lawyers, who have assisted the investigation of Adam Bell SC, are now closing their case following the examination of the claims that Star Entertainment had allowed the penetration of alleged fraud, organised crime, money laundering and foreign interference in its operations. On June 2nd, the inquiry heard that the Australian gambling operator’s collaboration with Kuan Koi, a foreign junket operator, continued, although the gambling company’s board had received a warning that the partnership could breach the law.
It was revealed that senior management figures in Star Entertainment were specifically informed they could violate counter-terrorism financing and anti-money laundering legislation but the company’s officials paid little attention to the warnings.
Mr Bell SC said that no one at a senior level at the gambling company seemed to have had any idea if the operator’s arrangements with junkets had been continuing or the terms on which it had been continuing.
Anti-Money Laundering and Counter-Terrorism Financing Rules Allegedly Violated by Star Entertainment
The assisting counsel Naomi Sharp SC examined an August 2019 memorandum from the corporate general counsel of Star Entertainment, Oliver White, regarding the relationship between the casino operator and Mr Koi. In the memorandum, it was described how money spent by international casino players could be transferred into the gambling company’s bank accounts.
At the time when the aforementioned memorandum was issued, Mr White warned that Star Entertainment had not been able to make sure that the process that had been used to make such transactions possible had been legal.
As revealed by Naomi Sharp SC, the gambling operator has also managed to circumvent the rules when it came to casino patrons willing to pay in cash. She stated that such players, especially ones originating from China, were unwilling to be known for having their funds spent in an international casino because of the restrictive anti-gambling laws in their home country. She further noted that the problem was pointed out in the papers that were tabled to the gambling operator’s board at the time.
According to the assisting counsel of the inquiry, the fact there had been no risk assessment was extremely concerning. As mentioned above, senior figures in the gambling operator paid little attention to warnings that such actions could breach anti-money laundering and counter-terrorism financing legislation because it was hard to identify the actual source of the monetary transactions. Ms Sharp commented that such behaviour was totally unacceptable for a casino, especially considering the high risks of money laundering.
Hong Kong Subsidiary EEIS Run by Star Entertainment to Conceal Patrons’ Gambling Spending
Evidence presented during the inquiry also showed that Star Entertainment also assisted some of its casino patrons to conceal their gambling transactions through EEIS, a loan-giving subsidiary based in Hong Kong.
As previously reported by Casino Guardian, the Australian gambling giant was approached by the National Australia Bank, asking the operator to provide more information why most funds transferred to the bank accounts of EEIS were coming from foreign destinations. Star Entertainment had been continuously pressed to provide more detailed information on the matter by the corporate banking head of the National Australia Bank, Tanya Arthur, with the operator still delaying the required data in September 2019.
As the investigation found, the accounts had not been monitored properly by Star Entertainment. Ms Sharp SC further revealed that they were supposed to be dormant but were instead active, and the purpose of the EEIS subsidiary changed over time, with the entity having allegedly been used by the Australian gambling giant to funnel money into the company’s casino.
The inquiry’s assisting counsel noted that the loans given by EEIS had no commercial purpose, as they were actually designed to help casino patrons conceal that they were spending their money to fund gambling.
- Author
Olivia Cole
