By Nick McKenzie and Joel Tozer
Star Entertainment has been inviting in many of the same people as Crown did.Credit:
Listed gaming giant Star Entertainment has been enabling suspected money laundering, organised crime, large-scale fraud and foreign interference within its Australian casinos for years, even though its board was warned its anti-money-laundering controls were failing.
Between 2014 and 2021, Star cultivated high-roller gamblers who are allegedly associated with criminal or foreign-influence operations, according to multiple casino and law-enforcement sources with knowledge of the company’s operations, including Star insiders.
Sydney-based The Star Entertainment Group, which runs casinos in Sydney, Brisbane and the Gold Coast, has portrayed itself as the cleanskin casino company compared to its rival, Crown Resorts, whose reputation has been shattered by the findings of two royal commissions and a regulator’s investigation. But an Age, Sydney Morning Herald and 60 Minutes investigation has confirmed that Star has engaged in many of the same improper practices while escaping the withering public examinations faced by Crown’s executives and key shareholder James Packer.
Among the high-roller gamblers feted by Star were an alleged Sydney cocaine importer, a Canberra restaurateur and accused drug trafficker and money launderer, the nation’s most infamous accused foreign-interference agent and some of Australia’s biggest alleged tax cheats and corporate fraudsters.
Star allowed these figures to gamble vast amounts of money, ignoring a number of red flags about their conduct while wooing them with luxury goods, free hotel rooms and other incentives.
Punters banned from Crown Melbourne and The Star Sydney by the NSW and Victorian police commissioners because of their links to organised crime have been permitted to gamble at The Star Gold Coast’s casino.
The firm’s failings are exposed in internal company documents, court cases and law-enforcement intelligence briefings, as well as a dozen sources with detailed knowledge of Star’s operations.
Asked a series of questions, a spokesman for Star responded with a statement saying: “We are subject to thorough and ongoing regulatory oversight including compliance checks and reviews across our operations in NSW and Queensland. The Star works closely with authorities including law-enforcement agencies and is committed to transparent engagement with regulators.“
Ignoring the warnings
In 2018, global audit firm KPMG was commissioned by Star to provide two reports to the board’s audit committee, which included chief executive Matt Bekier and chairman John O’Neill. On May 24, 2018, the committee received the confidential reports. They outlined how Star was profoundly failing to combat the risk of money laundering, terrorism financing and corruption with its Sydney and Queensland casinos.
The Star Entertainment CEO Matt Bekier.Credit:
The highly critical KPMG reports warned Star’s anti-money-laundering risk-assessment system “does not consider terrorism financing as required by the AML-CTF [anti-money-laundering and counter-terrorism financing] Act.” Star’s assessments of some gamblers “appear to understate the level of money-laundering risk” and Star had “no documented money-laundering risk assessment, or risk-assessment methodology” for Chinese high-roller tour groups known as junkets.
KPMG also found Star was inadequately resourcing its internal anti-money-laundering unit and was failing to properly vet these high-wealth Chinese junket gamblers: “Due diligence on junket participants is limited.”
The company’s dealings with suspected criminals, foreign agents and fraudsters occurred over many years and in some cases as recently as 2020 and 2021, suggesting the warnings in the KPMG reports were not adequately acted on.
The Age, Herald and 60 Minutes investigation has found that between 2014 and 2018, Star Entertainment allowed Chinese high-rollers to use special Chinese debit and credit cards to withdraw hundreds of millions of dollars in funds from Star’s hotel properties in a manner which disguised gambling activity as hotel expenses.
“Senior management pushed back when we pointed out [the criminal connections of one man], because he was such a big gambler.”
It was one of the methods also used by Crown to evade China’s strict national laws against taking money out of the country for gambling. The practice was exposed this year at the Victorian royal commission into Crown, with counsel assisting Adrian Finanzio, SC, arguing that it meant Crown should lose its licence.
Casino industry analyst Ben Lee said Star’s use of the system, which included using China Union Pay cards, was unethical and contrary to anti-money-laundering practices and that Star managers should have known about it. The concealment involved “tells you … that they are aware it is illegal”.
The chairman of the NSW gaming regulator, Philip Crawford, last month announced that his organisation would conduct a routine, closed-door review of The Star Sydney to privately examine if the improper practices exposed at Crown by the NSW Bergin inquiry have “if at all … been part of the business of The Star”.
However, in an interview with The Age, the Herald and 60 Minutes, Mr Crawford said he was unaware of long-standing, poor practices at Star, or the damning KPMG reports.
“If it is as bad as you say it is, then that’s certainly something they should have reported to us,” he said.
The welfare recipient and the chef
Over 14 years between 2007 and 2021, one of The Star Sydney’s biggest pokies players, the mostly unemployed Mende Trajkoski, turned over $175 million, according to casino records and briefings from confidential sources.
Unemployed poker machine gambler Mende Trajkoski.Credit:
In the last six years of his massive splurge, Mr Trajkoski cashed out $18 million, casino records say, and he only stopped when the NSW police organised crime squad arrested him in June in connection with three tonnes of cocaine he allegedly imported in various shipments in 2020 and 2021.
Former Australian Federal Police financial crime investigator Cameron Watts said Star’s failure to apply basic due diligence to Mr Trajkoski was inexplicable.
“I suspect that if you were the person responsible for looking at this over a time period and you didn’t identify it, it’s one of two things: you’re either incredibly bad at your job or there is some other reason that this hasn’t been picked up.”
Rather than act on the red flags, Star wooed Mr Trajkoski with lavish gifts for him, his friends and relatives, including penthouse accommodation, luxury watches and handbags.
Mr Trajkoski was made a member of Star’s invitation-only Diamond Club and given all-hours access to a Star employee who was told to accommodate his every need, including late-night limousines and accommodation requests.
Star also permitted a close associate of Mr Trajkoski to access its high-roller area and use Mr Trajkoski’s Diamond Club privileges. A basic internet search of this associate would have exposed him as a convicted drug trafficker recently released from jail.
Casino records reveal that Mr Trajkoski told staff he was a car salesman, a falsehood never checked by Star. The casino also permitted Mr Trajkoski to gamble on the pokies in stretches of up to nine hours at a time, indicators of both problem gambling and, in some situations, money laundering.
A Star insider said a senior manager had told him that despite suspicions about Mr Trajkoski’s gambling habits and source of income, Star decided to keep taking his money “until this all blows up”.
Another Star high-roller recently arrested by police over alleged drug trafficking and money laundering is Canberra restaurateur James Mussillon, who was The Star Sydney’s biggest ACT patron until he was banned by the NSW police commissioner from entering the casino. Mr Mussillon was charged by the AFP in August and accused of money-laundering activity dating to 2016.
Sources at Star said that over several years, the casino company had ignored red flags, including Mr Mussillon’s erratic behaviour. Even though Star staff had identified him as a “suspicious” player, the casino had provided Mr Mussillon with incentives to not only keep gambling but to recruit others from his network. A Star senior marketing manager had also visited Mr Mussillon at his Canberra restaurant Courgette, a Star source said.
Restaurateur James Mussillon, another Star high roller.Credit:
Asked about a number of these cases, the Star spokesman replied: “There are constraints that prevent The Star from commenting publicly on individuals.”
In 2020, Star’s managers were also busy cutting deals with another entity accused of links to organised crime: a high-roller tour junket company called Suncity. Crown Resorts was excoriated in the media in 2019 for dealing with the Macau company because of its links to Asian organised-crime gangs and suspected money laundering. In August that year, it was also revealed that Suncity’s chief executive, Alvin Chau, had been banned on character grounds from entering Australia by the federal government.
But asked at the time if the casino would continue doing business with Suncity, CEO Matt Bekier said: “Why not? Suncity is the largest junket operator in the world … and we work in a very prescribed and lawful way with junkets that are credible and have been approved, in some states, by the regulators.”
On March 23 this year, a NSW Supreme Court statement of claim issued by Star high-roller Guoyi Su alleged that in January 2020, Star encouraged him to deposit millions of dollars “into an account operated or controlled by Alvin Chau and Suncity” so that he could then gamble at The Star Sydney. Mr Su is suing Star because he alleges the winnings he generated by gambling these funds were not paid out.
Star confirmed in court papers that its casino was dealing with a high-roller tour operative in January 2020 — who this masthead has confirmed is a Suncity representative — but that Star was not liable for the missing winnings.
This masthead has also confirmed that high-rollers banned by police chief commissioners from attending casinos in Sydney or Melbourne have been allowed to keep gambling at The Star Gold Coast. Concerns about the inconsistent application of anti-money-laundering controls between Star casinos in Sydney and Queensland was flagged in the 2018 audit reports presented to Mr Bekier.
For example, Melbourne businessman John Khoury, who is best known as the long-term business partner of underworld identity Mick Gatto, has been banned by the NSW police commissioner since about 2012 from gambling at The Star Sydney based on his organised-crime associations. Despite this, he has for years been wooed by The Star Gold Coast and given luxury gifts, flights and accommodation in return for turning over tens of millions of dollars.
Mate of Mick Gatto, Gold Coast gambler John Khoury.Credit:
An Australian Criminal Intelligence Commission and Victoria Police intelligence probe in 2017, codenamed Northern, uncovered $39 million being moved through Mr Khoury’s Gold Coast casino account between 2010 and 2017, raising serious concerns about Star’s internal processes. He has not been charged and is not suspected of money laundering or other offences.
Asked why Mr Khoury had been banned at one Star property but not another, a former insider said: “Senior management pushed back when we pointed this out because he was such a big gambler.”
The triad connection
Star’s ties to high-roller tour operatives with Chinese organised-crime links also date back several years. They include brothel owner Simon Pan and Chinese organised-crime boss Tom Zhou. The pair’s dealings with Crown Resorts has led to the Melbourne company facing the potential loss of its licence in three states but, until now, their interactions with Star have remained hidden from public view.
In 2017, a report by anti-money-laundering agency Austrac identified Mr Pan as a “junket tour representative” at Star and warned of his suspicious casino activities.
Mr Zhou’s historical dealings with Star have also been examined by Austrac and the AFP. In 2016, when federal authorities searched a private jet on the Gold Coast chartered by Mr Zhou as part of a money-laundering check, they found receipts detailing $15 million in transactions at Star.
Had Star conducted basic online due diligence, it would have discovered Mr Pan and Mr Zhou’s extensive alleged criminal past.
Tom Zhou: junket operator, triad connection and Chinese Communist Party influence agent.Credit:
It also would have discovered something that had caught the attention of Australian security agency ASIO: Mr Zhou’s extensive links to the Chinese government’s overseas influence group, the United Front Work Department, and his past as a political donor.
Multiple official sources who had dealings with ASIO have confirmed that in 2019, ASIO met with state policing officials to help gather intelligence on the possible use of Star by suspected foreign interference agents. The sources have confirmed that federal and state authorities tracked at least six high-rollers or junket tour operators linked to Star and the Chinese government’s overseas influence operations.
These discoveries were hinted at in an anonymised December 2020 report released publicly by Austrac, which stated that the anti-money-laundering agency had “identified a small number of links between junket tour operations and possible foreign interference activities” as well as the use of casino accounts to make political donations.
Austrac’s classified investigations go much further, identifying Star and its links not only to Mr Zhou but to Australia’s most infamous alleged foreign-interference agent and political donor, billionaire property developer Huang Xiangmo, the man whose relationship with former Labor senator Sam Dastyari led to the end of the Australian’s political career. Mr Huang, along with at least two other members of his Australian-based Chinese Communist Party lobbying organisation, were high-rollers at Star for several years.
Alleged Chinese influence agent Huang Xiangmo.Credit:
In March 2015, Mr Huang employed one of Star’s VIP operations executives as a manager at his Sydney property development company Yuhu. Austrac has uncovered suspicious transactions involving close associates of Mr Huang at Star as recently as 2018, just prior to Mr Huang’s expulsion from Australia by ASIO.
The cases of Mr Trajkoski, Mr Mussillon, Mr Zhou, Mr Pan, Mr Huang and Suncity are not the only ones involving suspect entities dealing with Star after red flags about their backgrounds. Two Chinese billionaires currently being pursued by the Australian Taxation Office over massive alleged tax rorting have both had their Star accounts frozen by Australian authorities amid accusations of suspicious money movements via the casino.
A Star source said one of the men, Phillip Dong Fang Lee, used Star’s China Union Pay card system to move millions of dollars from China to Australia around 2014 and 2015. And alleged corporate fraudster Zu Neng “Scott” Shi was accused in the Federal Court by the ATO last year over withdrawing nearly $2 million from ATMs at The Star Sydney over five years.
Law enforcement and regulatory sources said Austrac was building a strong case against Star, and Star would face significant penalties next year, putting further pressure on senior management and the board.
Tomorrow: more on Star's dirty secrets
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