Star Entertainment Inquiry Refutes Claims Made by Board Regarding Junket Partnerships

Star Entertainment’s former CEO, Matt Bekier, said recently that the casino operator’s board would have taken action if it had known about the company’s misguided operational management. However, as the New South Wales (NSW) inquiry continues, new testimony refutes that claim.

Star Entertainment
Star Entertainment
Star Entertainment’s Star Sydney casino. More details emerge about how the company bungled anti-money-laundering procedures. (Image: Daily Telegraph)

The Star Sydney’s senior management allegedly wasn’t aware of the casino’s involvement with a controversial junket operator. However, after reviewing allegations that Star Entertainment enabled money laundering, fraud, and foreign interference at its Sydney casino, lawyers representing the NSW gaming authority don’t believe this to be true.

The inquiry found that the casino’s relationship with notorious junket operator Kuan Koi was continuing, despite the fact that the board received warnings that the company could not verify compliance with the law. It also received alerts that Star could be at risk if it continued to maintain the relationship.

Star’s True Colors Come to Light

Adam Bell SC is heading the inquiry. He heard evidence this week that Koi operated an illegal cage at the casino. The casino also failed to cooperate with regulators and violated rules regarding Chinese debit cards through the China UnionPay card.

Today, Naomi Sharp SC, the primary lead in the inquiry for Bell, reviewed an August 2019 memorandum by Star’s corporate general attorney, Oliver White. It outlined the company’s relationship with Koi and explained how to transfer money to Star accounts for international patrons through Koi’s accounts.

White made his comments in a memorandum to Greg Hawkins, then chief casino operator, and Paula Martin, chief legal and risk officer. Both recently announced their departures from the company.

The scheme included licensed remitters that send money all over the globe. White warned at the time, though, that he wasn’t sure “whether the process was legal.”

Sharp stated in the inquiry that it was also a commercial risk due to the Star’s inability to know the actual costs incurred for its patrons. She explained that there were also options for those who couldn’t pay in cash. “That problem is pointed out in the papers that go up to the board at this time,” she emphasized.

Ignoring Expert Advice

Senior Star employees received warnings about their actions. They allegedly knew that these methods could increase the risk of the casino falling foul of anti-money laundering or counter-terrorism financing laws. It was also difficult to trace the source of the cash payments.

Sharp stated that it was unacceptable for a casino to continue this course of action, knowing the risks. She added that at no time did executives advise authorities. Bell inquired whether senior-level executives knew of the terms of the arrangement, to which Sharp asserted that they didn’t.

Koi reportedly told Star that he wanted to end their relationship because of the increased threat of scrutiny that resulted from the inquiry into Crown Resorts’ activities.

Sharp stated there was evidence of a dispute over money Koi felt Star owed him. They reached a settlement, but details of that arrangement remain unclear.

It wasn’t long before the National Australia Bank launched inquiries into certain transactions. Specifically, it began by exploring activity a Star subsidiary in Hong Kong was conducting.

At that point, White sent a second email to Star’s financial crimes and investigations manager, Kevin Houlihan. This warned of potential grounds for a complaint due to the lack of oversight over the casino’s involvement with Koi and the tight group of people included in those transactions.

Although only a few people controlled the movements, the board allegedly received several notifications, according to Sharp’s revelations. Even if those few tried to thwart the delivery of those notifications, someone who wanted to do the right thing would have found a way to complete the mission.

The NSW inquiry continues, but is close to wrapping up. Bell will receive more input and rebuttals this month before delivering his final recommendation, which should happen before the end of August.

The post Star Entertainment Inquiry Refutes Claims Made by Board Regarding Junket Partnerships appeared first on Casino.org.

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