Crown Resorts’ inquiry heats up

by Mia Chapman Last Updated
Crown chairwoman quizzed on money laundering at casino 

Crown Resorts’ new casino and hotel in Sydney will open its doors early next year.

The Sydney Morning Herald reports that while the 275 metre building, set to become the tallest in Sydney, is an achievement of structural and political engineering, as James Packer’s “gift to Sydney”, another carefully constructed façade has been cracked over the past two weeks.

An unprecedented probity inquiry with the same powers of a royal commission has laid bare the facts of Crown’s business dealings with figures linked to organised crime, and its failure to stop its Melbourne and Perth casinos from being used to launder dirty cash.

During four and a half days of evidence given via video link, Crown’s chief legal officer and top anti-money laundering officer Joshua Preston gave evidence that the casino ignored repeated red flags about how it operated and who it went into business with.

The New South Wales Independent Liquor and Gaming Authority launched the inquiry in the wake of a damaging exposed published a year ago by The Sydney Morning Herald, The Age and 60 Minutes.

Crown and its board responded furiously to the reports, publishing a full-page ad in rival newspapers calling it a “deceitful campaign” containing “unsubstantiated allegations…and outright falsehoods.”

That response, also sent to investors via an ASX release, could come back to bite Crown and its board, which is loaded with corporate heavyweights including Jane Halton, Harold Mitchell and its now chairman Helen Coonan.

Crown newspaper advertisement in the spotlight

Time and again Commissioner Patricia Bergin, and her counsels assisting returned to the advertisement and used it to test Crown’s credibility as they decide whether it is a suitable holder of Sydney’s second casino licence.

“I suppose when you go on the front foot…it is necessary to make sure that [your opponent’s] Achilles heel is exposed before you do it, isn’t it?” the former NSW Supreme Court judge Bergin proposed after one bruising examination.

The inquiry heard Crown was warned as far back as 2016 in two due diligence reports that its biggest junket partner, Alvin Chau and his Suncity operation, appeared to be a former member of the 14K Triad in Macau and that the US government considered him to have criminal links.

Junkets bring hyper-wealthy Chinese gamblers to overseas casinos, given them credit to get around strict controls on moving cash out of China, and then collect their debts when they return home.

The system brings in hundreds of millions of dollars for casinos like Crown every year, but is also vulnerable to being used to clean and move dirty money.

Despite the warnings, Crown gave Chau a private gaming room at its Melbourne casino, which counsel assisting Naomi Sharp, after showing a video of Suncity staff exchanging an Aldi cooler bag full of cash for casino chips, said was an “island of immunity” from Crown’s anti-money laundering controls and reporting obligations.

Crown eventually closed Suncity’s exchange desk after it discovered $5.6 million of cash stored in a cupboard in March 2018.

Such an inordinate amount of cash, Present said, sent “money-laundering alarms ringing.”

Yet none of those events, nor the reports by The Sydney Morning Herald about Chau’s underworld links and that home Affairs banned him from visiting Australia, prompted the Crown panel that approves junkets to review their business relationship.

Suncity relationship called into question

Preston said he had more recently suggested they review the partnership, based on the “holistic history” of Mr Chau, who closed his private room last year.

The Star Sydney also continues to work with Suncity, the inquiry heard, with its chief casino officer, Greg Hawkins, saying all he had read about Chau was speculation.

“I’ve nothing to validate it,” he said.

After a prolonged grilling, Preston acknowledged the “apparent link” between two former junket partners and an international junket syndicate known as The Company, which used Crown to launder drug money.

The board claimed that it “had no dealings or knowledge of any organisation of that name or description.”

Preston repeated that claim in a written submission to the inquiry in March.

But Sharp laid out a meticulous paper trail of publicly available court documents and media reports, which connected the syndicate to a former Crown junket operator, Roy Moo, who was convicted in 2013 of laundering $682,000 of drug money through Crown Melbourne.

Another partner, which Crown paid to arrange for triad bosses at its Perth casino in 2015, was identified in the report as the “Hot Pot junket”.

Internal Crown documents showed that its junket partner Ng Chu Un owned a Hot Pot restaurant in Macau.

“Are you saying you didn’t put those two things together?’ Sharp quizzed Preston.

“That’s a rather extraordinary oversight, is it not?”

“Not to my knowledge or that I recall,” Preston responded.

Commissioner Bergin said it was clear there were “instances, well documented, of money laundering through Crown…where that money laundering has been linked by the courts to drug trafficking.”

“So I suppose if you had your time over, you would like to do the exercise that Ms Sharp has done to ensure that the board was appraised of all these matters?” she said.

“Having that information at hand would have been definitely relevant,” Preston responded.

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