Star heads accused in court over alleged failure to manage illicit cash risk at casinos as major trial begins

The Guardian

10-02-2025

Former executives at embattled casino operator The Star put profit above risk when they failed to take action as junket operators potentially linked to crime gangs flaunted wads of cash and money in eskies, a judge has heard.
Lawyers for a slew of ex-heads from the embattled Star Entertainment Group appeared at the federal court as a lengthy hearing began on Monday.
The Australian Securities and Investments Commission alleges they breached their obligations to manage the dangers of possible money laundering and other criminal activity in its Sydney, Brisbane and Gold Coast casinos.
'This is a case about casinos and risk,' Asic barrister Ruth Higgins SC said as she opened submissions on Monday.
'Not the risk involved when a player bets black instead of red in roulette or twists instead of sticking in blackjack.'
The Star executives and board behaved in 'so incurious and complacent a manner' by allowing unacceptable legal, regulatory, financial and reputational risks within the group between November 2016 and March 2022, Higgins said.
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The firm maintained relationships with overseas junket operators, in particular one of the largest in Suncity, despite having evidence they were engaged in illicit activities and organised crime, she told Justice Michael Lee.
'Asic's case concerns the maintenance and escalation of these business relationships despite a slew of profoundly troubling, publicly available information about junkets.'
Junkets were ripe for exploitation because they obscured the origin of funds, she told the court.
They also led to vast sums of money with a higher risk of being associated with Chinese triads flowing into Australia after a prohibition on gambling in China, Higgins said.
In Suncity's dedicated space at The Star Sydney, known as Salon 95, bags of $50 notes were tied together with elastic bands, money was delivered to the service desk in blue esky bags and junket staff obscured the view of CCTV cameras by hiding under blankets, she said.
'These are acts uncluttered by subtlety and freighted with risk.'
Asic alleges that former chief executive Matthias Bekier, former company secretary and general counsel Paula Martin and former chief casino officer Greg Hawkins failed to promptly terminate or suspend the firm's relationship with Suncity or inform the board of the risks.
The three executives were aware of repeated suspicious conduct by Suncity personnel at the Sydney casino, Higgins told the court.
Former board members John O'Neill, Wallace Sheppard, Kathleen Lahey, Gerard Bradley, Sally Pitkin, Benjamin Heap and Zlatko Todorcevski are accused by Asic of failing to properly oversee The Star's relationships with junket operators.
'The directors of Star knew enough and more than enough about the risks that arose from junkets and red flags in relation to the junkets that were in fact operating at Star's casinos,' Higgins argued.
Former The Star executives have also been accused of providing misleading information to National Australia Bank about the use of China UnionPay debit cards in its casinos.
From 2016, China UnionPay had told The Star the use of its cards for gambling was prohibited, the court was told.
Higgins' opening submissions will take three days in what is expected to be a lengthy and closely watched trial.
Asic is seeking penalties as well as orders banning those sued from managing a corporation for a period to be set by the court.
The hearings come as The Star struggles to stay afloat, battling falling revenues and the ongoing fallout from prior regulatory breaches.
The firm agreed in February 2023 to pay $150m in penalties to Asic for its non-compliance with anti-money laundering laws.