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Star casino execs aware of gambling ‘red flags’, court told
On the first day of a lengthy trial, lawyers for ASIC accused the executives behind Star casino of having “more than enough” knowledge about alleged illicit criminal activity and associations.
Naomi Neilson
Despite having “substantial evidence” that junkets were engaged in illicit activities, including money laundering and links to overseas organised crime, Star casino’s executives turned a blind eye, the Australian Securities and Investments Commission (ASIC) alleged.
On the first day of a planned six-week trial, Ruth Higgins SC, on behalf of the financial regulator, alleged the executives engaged in unacceptable “legal, regulatory, financial and reputational risks” and allowed them to “germinate and surface within the Star group”.
The proceedings were brought against 10 former Star board members for an alleged breach of their duty to act with care and diligence.
“ASIC contends the directors of Star knew enough and more than enough of the risks that arose from junkets and red flags in relation to the junkets that were in fact operating at the Star casinos, [and] that they were on notice of the relevant risks and should have taken steps [to resolve] those matters,” Higgins said in opening.
The regulator alleged junkets acted as an “intermediary” between the casino and high-value gamblers that allegedly allowed “vast amounts of Chinese money” to come into the country. By doing so, Higgins claimed it came with links to Chinese organised crime.
The Suncity junket had a dedicated space within the casino known as Salon 95, where alleged “bags of $50 notes were tied together with elastic bands”, money was delivered to the service desk in blue Esky bags, and CCTV was shielded by blankets to obscure illicit activities.
Higgins said directors failed to manage the “obvious risks” and failed to take “reasonable steps” to shut down the junket, including by suspending Suncity or informing the board of the conduct.
ASIC told the court that Star allegedly allowed the use of Chinese-originated debit cards, or Chinese Union Pay (CUP) cards, to “obtain very large sums of money for the purpose of gambling”.
CUP allegedly told Star through the National Australia Bank (NAB) that the cards were prohibited, but the casino ignored this and made misleading communications that the cards were only being used to pay for “non-gambling accommodation expenses”.
One of Star’s former directors, Harry Theodore, settled with ASIC on charges that he knowingly misled NAB about the use of ATMs to funnel more than $900 million into the casino.
The opening submissions are expected to take another two days.
Naomi Neilson
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
You can email Naomi at:
