A Chinese billionaire banned from Australia as a “national security risk” and possible agent of the Chinese government deposited A$1.7 billion ($US1.3 billion) at the Star Casino Sydney between 2010 and 2018. But Star Entertainment executives did not ask the Compliance Team to investigate the source of his wealth.
The revelations were disclosed during the eleventh day of an inquiry by the state of New South Wales. They are looking into Star Entertainment’s suitability to hold a gambling license in Sydney. The company has been accused of flouting anti-money laundering rules and doing business with junket operators linked to organized crime.
In February 2019, Australian authorities tore up property mogul Huang Xiangmo’s bid for citizenship and revoked his permanent residency. That’s after he was found to have made illegal bribes to high-level politicians.
He is suspected of working for the Chinese Communist Party’s United Front Work Department. That unit gathers intelligence and attempts to influence elite individuals and organizations outside China.
On Thursday, counsel assisting the inquiry, Caspar Conde, cross-examined Star’s general manager of financial crime and investigations, Kevin Houlihan, about the casino’s relationship with Huang.
While Huang had bought in for an “extraordinary” amount of money at the casino, Conde noted that his losses were “only” in the tens of millions. The barrister suggested this could indicate that the funds had not been deposited solely for Huang’s own play and that he may have allowed others to access it for gambling and other reasons.
An NSW Independent Commission Against Corruption (ICAC) investigation into Huang’s activities concluded that an illegal donation in 2015 to the state’s Labor Party probably came from the Star Sydney Casino cage.
The ICAC alleged that an associate withdrew the $100,000 in cash, stuffed it into a shopping bag and dropped it off at Labor HQ in Sydney.
Houlihan agreed that Huang’s activities at the casino should have raised alarm bells. But he said he was not asked to look into the matter and didn’t learn of it until it was brought up by the inquiry.
A December 9, 2017, email to Star Sydney execs from the casino’s general compliance and responsible gaming manager, Micheil Brodie, addressed the casino’s relationship with Huang.
I don’t see that conditions are present for us to refuse to do business with Mr. Huang because he has not been convicted of a crime that might be relevant, he is not charged with a crime that is relevant, and his gambling activity is consistent with a high-valued customer in that he loses at about the theoretical rate over time,” wrote Brodie, who, controversially, is a former head of the state gambling regulator.
Codie reminded the hearing that Star is obligated to do business with individuals of “good repute” and that merely “not being convicted of a crime” was part of the equation.
By 2018, minutes from a meeting attended by casino officials showed they had noticed that Huang had used three different Chinese passports when providing ID at the casino. But they were still happy to give him the benefit of the doubt.
One official suggested having multiple passports was “normal” in China and explained the differing birthdates on the documents by claiming that “a lot of Chinese people” don’t know their exact birthdate, according to filings.
According to Conde, when the Australian government effectively banned Huang from the country, there were discussions about keeping his account open so that others could use it. The justification was that Huang’s transgressions had been “political” rather than “criminal.”