Star Entertainment to Face Public Grilling on Anti-Money Laundering Failures
Posted on: October 19, 2021, 07:58h.
Last updated on: October 19, 2021, 10:44h.
Australia’s Star Entertainment will face a public inquiry in the state of New South Wales (NSW) into allegations it permitted its Sydney property to be infiltrated by organized crime.
The company’s shares plunged by almost 23 percent a week ago. That’s following damning reports in Australian media that claimed it had “enabled money laundering.”
The Sydney Morning Herald reports that senior barrister Adam Bell, SC, will lead the review. That’s bad news for Star. Bell’s in-depth grilling of Crown Resorts’ operations last year under similar circumstances ultimately led to the revocation of the operator’s NSW gaming license.
Suppressed Report Denial
Bell is expected to cross-examine Star Entertainment executives, including CEO Matt Bekier, to find out how much they knew about the company’s alleged anti-money laundering (AML) failings.
The existence of a 2018 internal report compiled by auditor KPMG that heavily criticized Star’s AML and counter-terrorist financing (CTF) protocols may create some difficult questions for Star’s board members.
Last week’s media stories claim the report was ignored and buried. In an official statement last Tuesday, Star called this “incorrect,” and said the report’s findings have been actioned.
$77M Slots Session
Media allegations against the company include that it allowed Chinese high rollers to access hundreds of millions of dollars using a system that raised serious AML concerns. The VIP guests were permitted to withdraw funds for gambling that were disguised as hotel expenses.
Star is accused of putting profits before compliance by failing to properly vet hundreds of high rollers, some of whom were high-level criminals.
These include Mende Rajkoski, who until recently was the biggest slots player at the Star Sydney. He once gambled $US77 million on the machines in one week, despite having a minimal income.
In June, Rajkoski was arrested for attempting to import three tons of cocaine with a street value of US$700 million into Australia.
Other former regulars include Tom Zhou, aka “Mr Chinatown,” a Chinese crime boss wanted by Interpol, and suspected sex trafficker and money launderer Simon Pan. Also on the list is Huang Xiangmo, who was labeled a “foreign influence agent” by the Australian government and expelled from the country as a national security risk.
Meanwhile, the Herald alleges that Star’s senior vice president of VIP gaming, Mark Walker, “maintained a secret and longstanding relationship” with alleged corporate fraudster Michael Gu.
Gu is a fugitive from justice after disappearing with US$245 million of his investors’ money.
Star is now facing possible class-action lawsuits from investors after around US$740 million was wiped off its market value when it’s shares crashed last week.
It is also being probed by Australia’s financial crimes unit, AUSTRAC, and is expected to face severe financial penalties once that investigation is completed.
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