Crown even allowed some junket operators to access Crown-linked bank accounts to launder their funds, leading to junket insiders boasting that laundering money through Crown was ‘easier than using a bank’.56 Bergin found that some of these accounts ‘were infiltrated and used for years by organised criminals’.57 Crown did not report these transactions to AUSTRAC.58 The federal government’s anti-money laundering laws were being grossly compromised, and either the government didn’t realise what was happening or – more likely – it didn’t want to know.

  Given the vastness of his criminal enterprise, the clock was always ticking for Alvin Chau. The secretive Australian Criminal Intelligence Commission (ACIC), which was monitoring him and had the power to compulsorily question witnesses, now tightened the screws. Throughout 2019, ACIC agents confronted Chau’s high-roller clients as they prepared to board flights out of Australia or when they were relaxing in their luxury complimentary apartments. Most coughed up what they knew about Suncity’s criminal underpinnings. The pressure was too much for Chau, and by 2020 he had decided to shut down his Australian empire.59 By 2021 he’d finally run afoul of the Chinese authorities, who arrested, tried and jailed him for 18 years.

  As extensive and lucrative as Alvin Chau and Tom Zhou’s junket operations were for Crown, they were only two of the nine such operators with whom the company dealt. Nefarious activities were threaded through most of the other junket companies Crown used.

  Ties to sex trafficking

  The criminality behind Crown’s operations was linked not just to the laundering of the proceeds of crime, but also to a highly organised system of the trafficking of women for sexual use by Crown’s Chinese high rollers. The link was known to federal police but only publicly emerged through investigative journalism carried out by a team from The Age in 2019, the same process that exposed Crown’s ties to triad-operated junkets.60

  At the centre of the allegations was a brothel called 39 Tope that took its name from its South Melbourne address, 39 Tope Street, just a few minutes’ drive from Crown. Behind the garish red-painted and brightly lit brick wall, replete with a stylish white awning over the door, women plied their trade. Some had been trafficked from different parts of Asia. Typically, women arrived on the same flights used by the high rollers. These were flights owned and operated by Crown.

  The connection to Crown wasn’t just the clientele. The owner of the brothel, Simon Pan, was also a junket partner with Crown. Documents uncovered by The Age’s investigative team showed that Pan was the representative at Crown for a Macau junket operator, the Kim Teng Jong junket, and had given Crown high rollers millions of dollars to gamble. Pan himself had serious connections to organised crime and was subject to Australian Federal Police investigations between 2008 and 2015 for suspected sex trafficking.

  In 2019, Andrew Wilkie told the federal parliament of the testimony of a former Crown driver who ferried wealthy overseas gamblers from the tarmac to Crown. This whistleblower described picking up a sex worker on the way to the casino and seeing many instances of ‘women being degraded, women being abused, women slapped around’.

  Pan’s 39 Tope brothel was part of a larger syndicate trafficking Asian women to Australia as sex workers. Police removed at least two women from the brothel who they suspected had been trafficked. Some members of the wider syndicate were arrested, but not Pan. It was claimed that the women at 39 Tope were too scared to lay charges. Or was it because the brothel, with its links to Crown, was another plank in the casino’s power structure?

  This was the possibility raised by anti-trafficking advocate Kathleen Maltzahn. In 2000, a police officer had told her the names of 12 Victorian brothels that were known to traffic or otherwise exploit women – 39 Tope was on the list. Yet the Victorian state government continued to license it to operate.61

  Pan’s partnership with Crown also raised the prospect that the proceeds from his controversial brothel could have been washed through the casino’s high-roller rooms.

  Fallen star

  As Packer was developing his high-risk business model around known organised crime figures, Star taking the same business model to another level. When in 2014 Star – then known as Echo Entertainment – announced that it had joined forces with a Hong Kong business empire, Chow Tai Fook, to bid for a second Brisbane casino licence, it wasn’t well known that Tai Fook had business partners in Macau casinos who had been named by the US government as organised crime figures.

  The US and Canadian authorities reported credible intelligence of the business group’s dealings with Chinese triads through casino VIP rooms.62 In fact, the head of the Tai Fook empire was Cheng Yu Tung, a Macau business partner of Stanley Ho who had long been banned from Australia. While these links were unknown to the public, it defies belief that they were not easily established in the vetting process undertaken by the newly elected Labor government led by Annastacia Palaszczuk. The failure of the vetting process remains unexamined by official inquiries to this day.

  When in 2022 the same Labor Queensland government was forced to appoint its own inquiry into Star’s shocking corporate behaviour, it omitted any term of reference to examine the original tendering process.63 What is known about this process is as potentially disturbing as it is familiar: the insidious process of insider lobbying. As The Australian has reported, in the lead-up to the approval of Star’s bid, it claimed that Star had waged:

  A ruthless and, in some parts, questionable campaign of lobbying, paying for fundraisers, secretly hiring Labor-connected consultants and showering freebies on MPs all the way up to Annastacia Palaszczuk, to get what it wanted. The Premier was even wined and dined at the home of Star’s in-house lobbyist Alison Smith, married to former Labor Deputy Premier Paul Lucas, at the height of negotiations.64

  Of course, The Australian is no friend of the Labor Party. If irrefutable proof is lacking in its account of the approval process for the Queen’s Wharf casino project, it’s not dissimilar insider politics to the Coalition New South Wales government’s approval of James Packer’s casino licence at Baragaroo. No rules had been broken, nothing illegal had occurred; politics in Australia sometimes just works like this.

  If Star’s embrace of a partner with links to criminal connections reveals its corporate culture, it’s not surprising that its business model was as compromised as Crown’s. Overseeing Star’s descent into corporate recklessness was Swiss-born CEO Matthias Bekier.

  If anyone seemed to have the credentials to operate a casino and run it with integrity, it was Bekier, who took over the company in 2014. He brought a PhD in finance, a highbrow fascination with esoteric German literature and a wealth of experience as a chief financial officer at the consultancy firm McKinsey, followed by stints at Tabcorp and Star before his elevation to the top job. Youthful-looking, with stylishly groomed hair and impeccable suits, Bekier carried the self-satisfied air of a modern CEO. In 2018 he was paid $4.4 million.

  A year earlier, Bekier had given an interview in which he indicated that going after high rollers – ‘whale hunting’, as he termed it – was an unsustainable model: it was too volatile and too risky. He wanted families to come and stay at Star’s casinos in Sydney and Brisbane, with parents having a flutter on the side as they enjoyed their break. His vision sounded almost wholesome. But it defied reality. Whale hunting was exactly what Bekier was focusing on.

  Like Packer, Bekier developed close relationships with triad-linked junket operators. In Star’s case, Suncity was the biggest customer.65 Star had been officially briefed on these risks. Angus Buchanan, the company’s due diligence manager, had been officially informed at a 2017 meeting with Australian law enforcement that in the period 2013 to 2015 the Suncity group was believed to be laundering up to $2 million a day through various methods.66

  Not surprisingly, the focus on whales paid off quickly for Bekier. By 2019, Star Casino’s revenue was $1.67 billion, more than double what it had been in 2015. Its windfall was largely due to record bets from high rollers.67

  In 2018, Star carved out a private gaming room for Suncity’s clientele. This was ‘Salon 95’, and it was staffed by Suncity employees who were not licensed as special employees under the Casino Control Act. Star’s management had seen the findings of a 2018 investigation into Suncity by the Hong Kong Jockey Club, which linked Mr Chau to triads and organised crime, but Suncity continued to operate in a private room at Star Casino.68

  Effectively, triads from Macau were allowed to run gambling operations out of Star’s premises. As the Bell Inquiry later found, CCTV footage showed dubious types bringing bags or boxes of cash to the front counter on a regular basis to be secreted away. On some occasions, staff were filmed trying to block the view of the camera with a blanket.69 The origins of these monies were never tracked by Star.

  In fact, Bekier fashioned a company culture in which, it was claimed, managers operated under a tacit agreement: ‘Go along with what the CEO wants, and you can keep your jobs.’70 Star’s management was well aware that its relationship with Suncity contravened its anti-money-laundering responsibilities but continued to renew the agreement with the junket operator.71

  In 2017, for example, Bekier approved a $20-million increase in credit for Qin Sixin just 21 minutes after receiving the request. Qin was a long-time player at the casino but had been arrested five years earlier for alleged money laundering and illegal banking. Bekier later explained that he trusted that regular checks had been done by his team. It was not his job, he said, to review the probity of individuals.72 Exactly what Bekier knew about Star’s connections to triad-connected junkets is, at the time of writing, subject to legal action (see below) and definitive judgements cannot be made here.

  Granting special privileges to Suncity wasn’t the only rogue element of Star’s business model. It also allowed high rollers to use the government-owned China UnionPay (CUP) debit card at hotels attached to Star’s Sydney, Brisbane and Gold Coast casinos to flout anti-money-laundering and capital export controls set by Beijing. However, the Bank of China had banned the use of the CUP debit card for gambling in its casinos.

  The CUP transactions were documented on hotel letterhead bearing the patron’s room number and arrival and departure dates, and in some instances were issued in respect of ‘dummy’ rooms when the patron had not stayed at the hotel. The documentation was an artifice and obscured the true nature of the transactions.73

  But the deception got messy. Transactions using the CUP card were permitted through NAB ATMs. But in mid-2016, China UnionPay had told the NAB it did not want their card used to pay for gambling because of money-laundering concerns.74 When NAB queried Star, management told the bank that the transactions were for hotel expenses, not gambling. Nearly a billion dollars’ worth of gambling was hidden in this deceptive manner.75 As the Bell Inquiry found:

  From 2017, NAB queried a number of CUP transactions at the instigation of UnionPay. Star Entertainment did not take appropriate steps to ensure that NAB and UnionPay were told the truth, but instead, responded to inquiries in a way which was liable to mislead both NAB and UnionPay.76

  Writing in The Australian Financial Review in 2022, Elouise Fowler and Hannah Wootton described the CUP cover-up as ‘a massive fraud’.77 But that claim would need legal testing.

  Bekier later told the Bell Inquiry that the ‘Chinese Government didn’t want the cards to be used for gaming, and we did it regardless’. Asked why the company used the cards in contravention of Chinese law, Bekier replied that they were simply following Crown’s practice of using CUP.

  Chinese high rollers weren’t the only risky clientele targeted by Star management. In Queensland, the company’s policy was to lure big interstate gamblers who’d been banned from their local casinos, including Star’s own Sydney casino. Among these were people alleged to have been drug importers and traffickers, tax cheats and corporate fraudsters. Star allowed them to gamble vast amounts of money, ignoring red flags while wooing them with luxuries.78

  How did a squeaky-clean, highly credentialed, sophisticated character like Matthias Bekier take the company down such a sleazy path? According to Sally Pitkin, the chair of the board at Star, from 2014 management at the company became preoccupied with the threat posed by the opening of Packer’s Barangaroo casino.

  Pitkin had all the credentials to be an effective company director. A former lawyer with Clayton Utz, she had earned a PhD by shadowing the board of a Brisbane private boys’ school. From there she developed a reputation as a ‘governance nut’. In 2021, the bookish Pitkin was promoted by Star on its website as one of the one of company’s ‘women to watch’.

  Pitkin told the Bell Inquiry that Star’s VIP Division was tasked with luring high rollers from China before the expected opening of Packer’s Barangaroo complex. A siege mentality developed, she said. ‘Crown was the company that benefitted from the Packer influence … and Star was the underdog.’ Pitkin choked up when explaining that the VIP Division’s voice ‘was the loudest. People in compliance … were either silent, ignored or complicit while the VIP team was just ignoring the rules.’79 In the prevailing siege environment, otherwise good people, Pitkin explained of her fellow directors, developed an ‘indifference’ to legal and ethical wrongdoing.

  Does Pitkin’s defence stand up to scrutiny? Not at all, according to Australian Financial Review journalist Joe Aston. Known for his fearless skewering of corporate humbug, Aston wrote: ‘The aura of a competitor, and a notion of moral superiority, cannot cause a team of highly paid professionals to facilitate money laundering at scale for organised crime. Crown did not make Star do this. The invisible hand of James Packer did not overpower them.’80

  In her comments, Pitkin alluded to a cultural failure at the company. But as was the case with Crown, the word ‘failure’ overlooks the deliberate steps Star took to cultivate relationships with junkets, knowing the risks and ignoring them. Bekier ignored warnings about the threat posed by the company’s lax approach to money laundering. In early 2018, he commissioned KPMG to compile a report of the company’s anti-money-laundering capabilities. The report issued by the consultancy firm was scathing. Star Entertainment, KPMG found, was understating its level of money-laundering risk and was not considering counterterrorism financing issues at all; its internal anti-money-laundering unit was inadequately resourced; and it was failing to vet junket participants properly, in particular gamblers from mainland China.

  In late May 2018, the mood was tense when the executive’s audit committee met to consider KPMG’s report. Bekier arrived in a hostile mood, throwing a copy of the report onto the table. He said that it was ‘unacceptable for the report to be prepared in this way’. He said the report’s findings were wrong, although he didn’t go into detail.81 Bekier chose to shoot the messenger rather than deal with the deficiencies in the company’s legal obligations. Reviewing the situation, Commissioner Bell was unimpressed: ‘The conduct of Mr Bekier reflected poorly on Star Entertainment’s culture and processes. His reaction seems to have been to seek to argue with KPMG rather than engage constructively with KPMG’s finalised report.’82

  All the while, the intense and ambitious Bekier drove a culture at Star around a ‘one-eyed focus on profits and money’. This, at least, was the assessment of Jonathon Horton, counsel assisting the Queensland inquiry into Star.83 Bell agreed: ‘The culture, which was particularly problematic in the International VIP business, where the risks were most acute, was one where business goals took priority over compliance goals.’84 And this was the case with Star’s 8000 staff. An external review revealed that they believed ‘profits mattered most’.85

  Bekier, in his evidence to the Bell Inquiry, sought to throw the VIP team under the proverbial bus. Asked by counsel assisting the inquiry Naomi Sharp whether Bekier felt ‘let down’ by his team, Bekier replied: ‘I feel let down by people in the risk team and people in the VIP team.’86 Bekier had a highly qualified view about his own role in Star’s flawed culture. As he explained: ‘I picked the people and I established the processes and structures and policies. And while I don’t think I was personally engaged in anything, it was happening under my leadership.’87

  Bekier failed to keep the board fully informed on critical matters, while the board, for its part, failed to ask the tough questions when they should have. Critics argued that a form of ‘cognitive dissonance’ captured Star’s board when it chose not to consider the obvious course of action: for Star to cease its relationships with criminal parties.

  Reflecting on her role as a director at Star, Sally Pitkin maintained that the board had been hoodwinked: ‘Clearly, the trust that the board placed in the CEO and the executive leadership team has been – has been breached. With the benefit of hindsight, you could say you shouldn’t have trusted them. I didn’t have any indications that we – we couldn’t trust them.’88

  Pitkin’s was an extraordinary admission. She resigned as a board director once the company’s scandal erupted all over the media, and as the Australian Securities and Investments Commission (ASIC), the corporate regulator, considered mounting charges against the company’s entire management team. Myriam Robin, a senior writer with The Australian Financial Review, was moved to quip: ‘Super Sally Pitkin retires to spend more time with her lawyers.’89 Pitkin is one of nine former directors at Star who the financial regulator, ASIC, has taken action against for breaches of their director’s duties. But, at the time of writing, the charges against her remain unresolved.

  The wash-up

  Given the potential illegality that lay behind the scandals at both Star and Crown, who has been held to account at both companies? The picture is sharply contrasting.

  In the wake of the Bergin Inquiry’s report in 2021, Crown was fined $80 million, but such fines come out of company coffers and so are effectively paid by shareholders. The management and directors of Crown got off scot-free. Yes, Packer lost the licence to operate his cherished Barangaroo casino, but sold it for $3.3 billion to US firm Blackstone Inc. A clutch of Crown executives and board members resigned but walked away with handsome payouts, collectively in the millions of dollars, such that, arguably, they suffered no financial penalty. When the Finkelstein royal commission reported in October 2021, it stopped short of forcing Crown to relinquish its Melbourne licence, but suspended it and installed an independent manager to clean up the mess.