Ilga Begins The Star Casino Public Hearings 17 March
The accusations began flying in October 2021. The Star Entertainment catered to high rollers and VIP players who had links to organized crime. Words like money laundering came into play. It was more than enough to prompt the NSW Independent Liquor & Gaming Authority to launch an investigation. And public hearings begin 17 March.
Media-Driven Accusations
Three well-respected media outlets conducted a joint journalistic investigation into allegations of improprieties within the Star Entertainment Group and in its casinos. Those three Australian media entities were The Sydney Morning Herald, The Age, and 60 Minutes.
If this already sounds familiar to the years-long Crown investigations, that’s because there are many similarities. Those media outlets uncovered years of failings, oversights, and permissions. And that turned into a stunning scandal that led to multiple regulatory and criminal investigations. Further, Crown is still at a point of defending its name and reputation to keep its gambling licenses.
The same three media organizations heard rumblings about potential money laundering and organized crime at Star casinos. They heard that the highest levels of management overlooked – or even permitted – high rollers to launder hundreds of millions of dollars there. The actions were so obvious that they happened in plain sight. So, journalists started to explore.
What they found was that as Star watched the allegations turn to evidence at Crown Resorts, Star Entertainment did nothing to root out corruption in its own casinos.
Even more bold, Star submitted a merger proposal to Crown in 2021.
Media Exposé Round 2
In October 2021, 60 Minutes aired the exposé that aired Star’s dirty laundry.
A man named Mende Trajkoski, unemployed, gambled about $175M in little more than a decade. He gambled it all away at the pokies. Sometimes, he played pokies for up to nine hours at a time. And as casinos do, Star considered him a VIP player. They offered gifts and luxury accommodations, treated him like a celebrity.
Law enforcement did know that something was wrong. NSW organized crime detectives investigated, which led to a massive bust in April 2021. In working with United States authorities, they jointly intercepted a three-ton cocaine shipment off the coast of South America. They substituted another substance and sent the shipment on to Australia. The shipment arrived, and its receivers put it into a storage locker.
Months later, Trajkoski went to pick it up. NSW authorities arrested him.
Another case involved John Khoury, friend and business partner of reported mobster Mike Gatto. NSW authorities watched Khoury for years, suspecting criminal behavior. And with that, the Star Sydney banned Khoury from its casino. However, Star Gold Coast treated him like a VIP. Khoury had an account with the casino. Others had deposited more than $39M into that account over the course of seven years.
Renowned Canberra restauranteur James Mussillon was also a Star VIP. He gambled millions at the casino without – reportedly – raising concerns for the casino operator. Australian Federal Police (AFP) arrested him in mid-2021, charging him with money laundering from 2016 forward.
Ignored and Overlooked Concerns
In 2018, law enforcement officials warned Star executives of warning signs. They told Star Chairman John O’Neill and Star CEO Matt Bekier of suspicious activities. Officials even presented KMPG-completed reports outlining money laundering failures at Star. Those reports alleged that Star underestimated the levels of risk associated with particular gamblers and ignored warnings about terrorism financing.
Authorities also alleged that Macau-based junket operator Suncity laundered money through Star casinos, the same as they did at Crown properties. As soon as Crown broke ties with Suncity due to the NSW investigation, Suncity upped the ante with Star. And Star did the same, advising one of its high rollers to put millions of dollars into a Suncity account.
Further, the Australian Security Intelligence Organisation (ASIO) told Star that foreign agents had exploited the company. ASIO named at least six high rollers with ties to the Chinese government who used Star to move money and people. One of those men was Huang Xiangmo. The Australian Taxation Office actually tagged him in 2019 for $140M in back taxes. He avoided taxes for so long by laundering money through casino accounts. He then quickly fled Australia with his family.
Star allowed these VIPs to move money easily. Further, people at the Star facilitated it by allowing those men to use special Chinese banking cards. They could withdraw large sums of money from their hotel lobbies. This kept it out of the spotlight of regulators and investigators. The hotels then wrote it off as a hotel expense.
Even more, AUSTRAC discovered that Star had a business relationship with 39 Tope owner Simon Pan. The brothel had long been associated with sex slavery and organized crime. Despite that reputation, Pan was a junket tour representative who frequently sent high rollers to Star, the latter understanding their affiliations.
Notably, Pan was also closely affiliated with Crown prior to those investigations.
An Inquiry Ensues
In September 2021, NSW ILGA Chairman Philip Crawford quietly announced an investigation into Star Entertainment. He appointed Adam Bell to head up the review. Bell had been a relentless part of the legal team that investigated Crown for the Bergin Inquiry. The ILGA then gave him the powers and protections to lead a Royal Commission.
Originally, NSW expected Bell to reveal his findings in January 2022. Bell did initiate his investigation. However, Bell argued that he needed more time and wanted public hearings into the matters. The ILGA agreed. That set a March date for hearings to begin.
The final report is due to the ILGA by 30 June 2022. It will then open for public scrutiny.
The first hearing is set for 17 March. The ILGA will livestream it for the public.
At this point, there are only two weeks of hearings on the schedule. The 17-18 March hearings will feature former treasurers of Star Entertainment and a National Australia Bank executive. The 21-25 March hearings will call numerous witnesses. Those include former Star patron Phillip Dong Fang Lee, former risk and audit executives at Star, KPMG partners, and current regulatory and compliance managers at Star.
Hearing Goals
The ILGA set out terms of reference for the Star review. Those are fairly concise and specific.
- Suitability of Star to manage and operate casinos
- Suitability of Star to keep its casino license per compliance or non-compliance with Casino Control Act 1992 and Casino Control Regulation 2019 laws
- Ability of Star to keep criminal influence and exploitation from its properties
- Presence of illegal and undesirable people and activities in and affiliated with Star
- Management and operation of Star bank accounts
- Implementation of gambling harm minimization programs
- Internal management controls, reporting mechanisms, risk management, and culture within Star
Crawford said that the public hearings are the final phase of the investigation. “We have every confidence that the review will thoroughly The Star’s current operations, compliance with its statutory obligations, and make appropriate recommendations for remedial action if necessary,” he said.
