By Lucy Cormack
Star casino’s senior ranks were plagued by a culture of dishonesty, a lack of ethics and a deliberate failure to be transparent with the regulator and the board, lawyers leading a public inquiry have argued.
Failures to manage risk, due diligence and supervision of the lucrative VIP “junket” business stretched to the top of the organisation, including former chief executive officer Matt Bekier, the inquiry heard.
Counsel assisting the inquiry Naomi Sharp, SC, suggested Star’s willingness to prepare “sham” documentation could amount to a criminal offence of obtaining a financial advantage by deception.
Counsel assisting Naomi Sharp, SC, begins closing submissions to the Star inquiry on Tuesday.
In her final remarks on Friday, Sharp said the slew of executive resignations triggered by the public review of Star’s suitability to hold a casino licence could not turn things around.
She has told Adam Bell, SC, who is overseeing the inquiry, Star showed a “disdain for the casino regulator”, and was not suitable to hold the privilege of a casino licence.
“Merely parting company with a number of senior executives and embarking on a program of board renewal is not enough to change the culture of the organisation,” Sharp said.
Former Star CEO Matt Bekier at the NSW casino inquiry.
“We submit something has gone very seriously wrong within the culture of the senior ranks of Star Entertainment and of course The Star itself.”
The long-running inquiry was prompted by revelations by The Sydney Morning Herald, The Age and 60 Minutes of alleged criminal infiltration and money laundering at the Pyrmont casino.
Over eight weeks it has heard evidence from Star’s most senior executives and directors, who were tested on allegations of misleading conduct, a failure to manage anti-money laundering risks and turning a blind eye to criminal links of VIP junkets.
The inquiry has heard evidence Star disguised $900 million worth of Chinese debit card gambling transactions as hotel expenses and then lied to banks in an attempt to conceal the massive fraud.
It has also heard Star knowingly let more than 1300 VIP guests use China Union Pay cards in almost 2000 transactions from 2013 to March 2020, despite the practice being prohibited.
Allegations Star gave free rein to major “junket” VIP tour partners and disregarded anti-money laundering procedures to avoid China’s strict capital flight and anti-gambling laws have also been probed by the inquiry.
Among prominent high-rollers to feature during the review was billionaire property developer Phillip Dong Fang Lee, who swiped more than $22 million on his CUP card in two days in 2015, breaching Star’s own policies. He turned over more than $2 billion at the casino in the 14 years to 2021.
Sharp argued that Star had repeatedly breached the Casino Control Act and that its preparedness to use fake documents to mislead banks about its use of CUP cards could constitute a crime.
“... There is a serious question about whether a criminal offence has been committed ... [by] obtaining a financial advantage by deception,” she said.
All directors who have fronted the inquiry, including the now-former chairman John O’Neill, accepted there were significant cultural failings for which the board must accept responsibility.
O’Neill told the inquiry there was “no straightforward answer” for why things went wrong, conceding, “bad habits went undetected”.
Sharp said all directors gave evidence of feeling let down by management, “and they were let down by management”.
However, she raised concerns about the way the board reacted to media allegations about unchecked money-laundering risks and criminal infiltration and said evidence established there had been selective briefing of investors to manage the fall-out.
Sharp said the inquiry had heard a spectrum of views from directors, including Sally Pitkin, who said competitive threats posed by Crown Resorts meant “voices in the VIP business were the loudest”, and those in compliance and legal were either silenced, ignored or were complicit.
“Where there were tensions between competing objectives, profit won out,” she said.
The inquiry will resume on June 14 for Star’s response to the submissions.
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