Packer And Barton Under Scrutiny In NSW Crown Inquiry

New South Wales has been trying to conduct a serious and thorough inquiry into Crown Resorts since 2019. The NSW Independent Liquor and Gaming Authority (ILGA) did begin its hearings in January, but the coronavirus pandemic prohibited its progression for several months.

Since the hearings resumed in late June, the news emerging from the testimony has been damaging to Crown. Not only is former Supreme Court Judge Patricia Bergin openly disturbed by money laundering evidence as she oversees the inquiry, new allegations involving Crown surfaced most recently. They indicate that James Packer had inside information regarding financials before he tried to see 20% of his shares to Melco Resorts.

Hearings Upon Hearings

The first public hearing regarding the NSW Casino Inquiry – its official title – got underway on January 21, 2020. Another round of them commenced on February 24 and continued intermittently.

However, as all non-essential business in Australia began to shut down in March 2020, non-urgent court and investigatory matters did as well. On April 3, the ILGA put the inquiry on an indefinite hold.

As lockdowns began to be lifted in June, the ILGA decided to reopen hearings on June 24, 2020. There were also hearings in late July and intermittently through most of August and September.

Crown isn’t the sole focus of the inquiry, as some general categories of issues have been explored. Some of those have included the general operation of casinos, junkets, and vulnerabilities to various crimes.

Much of the testimony has pertained to Crown, however, due to a stunning and extensive report produced by 60 Minutes, the Sydney Morning Herald, and the Age in July 2019.

Allegations were wide-ranging and included connections between Crown executives and members of Chinese syndicates, junkets to facilitate drug and human trafficking rings, money laundering, governmental influence, and overlooking criminal behavior. The exposé determined that Crown protected an “arrogant culture” driven by a “lust for profits.”

With all of that in mind, it is not surprising that the hearings tend to focus on Crown and seem to be on the path to continuing for the indefinite future.

And Crown’s gaming licenses may depend on the outcome.

Looking the Other Way

There is a big difference between Crown participating in illicit activities, willfully ignoring them, or being altogether surprised by them. Allegations in the hearings of early September indicated that Crown Resorts executives willfully ignored warnings regarding money laundering and other organized crime activities.

Technically, Crown seems to have followed legal and governmental anti-money laundering requirements. However, the its claims to have been a “gold star” AML-compliance company proved false, a lie from former CEO John Alexander. In fact, a compliance expert said that Crown had much room for improvement.

In addition, Crown used a market release in its advertising that proved false. The material claimed that partner Suncity Holding Group was listed, regulated, and controlled via a Hong Kong base. In reality, though, the partnership was not with the group but Suncity’s chairman, who was recently blocked from even entering Australia based on possible organized crime connections.

Troubling Allegations

The testimony provided in the September 23 hearing was so troubling to Commissioner Bergin that, according to the Guardian, she stated, “This has reached debacle levels; it’s extraordinarily troubling.”

Current Crown CEO Ken Barton answered questions regarding the alleged money laundering. He admitted that he was not aware that Suncity’s junket company, which ran Crown Melbourne’s high limit room, accepted cash deposits. He claimed that he found out when a media outlet released a video of said transactions in October 2019.

Bergin pushed Barton on the evidence showing such activities happening from 2013 through 2016, as well as information regarding other gaping loopholes in money laundering protections.

Crown did suspend all junket activities until the end of June 2021 to give ample time for an internal review process. The company is also seeking a person to fill a new role as Head of Compliance and Financial Crimes.

Fumbling Financials

The following day, on September 24, the hearings dove into James Packer and his attempt to sell nearly 20% of his shares to Melco Resorts, run by Lawrence Ho. Eventually, after the pandemic set in, Ho decided not to take that much after all, leaving his share at 10% before selling even that.

The entire deal, however, perked the ears of NSW regulators. Crown’s license for its Sydney project at Barangaroo contained a clause prohibiting any deals with Stanley Ho, Lawrence’s father. The elder Ho had long been suspected of maintaining ties to organized crime syndicates. The younger Ho buying shares from Packer breached that agreement.

Packer had already been under scrutiny in association with the Crown inquiry, but the hearings delivered more concerning accusations.

Evidently, Barton urgently requested the financial forecasts for Crown through 2021, and he did so on May 3, 2019, less than a month before the announcement of the sale of shares to Melco. Crown Director Michael Johnston also knew of the request for documents. The allegation is that Packer received those financial forecasts in May.

Packer is due to testify in the coming days.

Hearings are set to continue through October 9. It is unclear at what point the hearings will end and Bergin will begin working on her report.