Star casino’s high-roller gaming manager maintained a secret and longstanding relationship with accused corporate criminal Michael Gu while the gambler allegedly laundered millions of dollars through Australian casinos.
Mr Gu also offered the Star manager, Mark Walker, a lucrative job as Mr Gu sought to build his own gambling empire. Despite weeks of negotiations, Mr Walker, Star’s vice-president of premium service operations, did not accept Mr Gu’s job offer, but he continued to meet and advise the businessman about his gambling business dealings, according to sources with detailed knowledge of Mr Gu’s activities.
Michael Gu, a significant gambler at both Crown and The Star, and the chief executive of iProsperity, which collapsed owing millions.Credit:James Alcock
Mr Gu has since fled the country after allegedly dudding investors in his company iProsperity by making misleading claims about buying a portfolio of Australian commercial property worth hundreds of millions of dollars. The iProsperity group collapsed in July 2020 owing $325 million to creditors.
There is no suggestion that Mr Walker or others at Star knew that Mr Gu was a suspected corporate criminal. Mr Walker declined to answer questions about what he knew, if anything, about Mr Gu’s suspicious gambling activities.
The revelations raise fresh questions about corporate governance failures within Star Entertainment because Mr Gu and several of his associates are now accused of using Star Entertainment and rival firm Crown Resorts to launder or gamble funds suspected to have been derived from Australian and Chinese investors in iProsperity.
Senior gambling industry sources who cannot be identified for fear of losing their jobs have confirmed that The Star hired Mr Walker in May 2018 after he left Crown Casino. Mr Walker resigned suddenly from Crown before he could explain to the firm his knowledge of several probity related issues involving other staff. Before those matters could be investigated by Crown, he was hired by The Star to help it attract more high rollers.
The Star in Sydney.Credit:Louise Kennerley
Mr Walker had overseen some of Mr Gu’s gambling activities at Crown. However, multiple casino sources said Mr Walker encouraged Mr Gu and his allegedly corrupt business partner Harry Huang to then gamble at Star, where the pair and their associates went on to punt millions of dollars between 2018 and 2020.
Mr Gu and Mr Huang fled Australia last August, the month after the iProsperity collapse. Insolvency firm Cor Cordis is now tracing millions of dollars linked to the fugitive pair, including funds gambled at Crown and later at The Star. The insolvency firm declined to comment, but recently advised creditors it had traced at least $15 million the pair had gambled at Australian casinos.
Cor Cordis has flagged with creditors it is seeking backing from funders to hold court examinations into iProsperity, which could involve Mr Walker being grilled about Mr Gu and Mr Huang’s gambling activities.
The Star’s CEO Matt Bekier declined to answer specific questions about Mr Walker and Mr Gu. Mr Bekier also declined to respond to a list of questions from this masthead last week about junket operators linked to alleged criminal activity and two damning confidential May 2018 inquiries that found The Star was failing to adequately deal with suspected money laundering, especially that involving Chinese high rollers.
Star CEO Matt Bekier.Credit:James Alcock
On Sunday night, The Age, The Sydney Morning Herald and 60 Minutes exposed how Star Entertainment may have been enabling suspected money laundering, organised crime, large-scale fraud and foreign interference within its Australian casinos, even though Mr Bekier and chairman John O’Neil were warned its anti-money-laundering controls were failing.
In a statement released to the ASX on Monday, The Star said it would confidentially address the allegations, some which it described as “misleading”, with regulators and law enforcement authorities. Its share price fell 20 per cent after trading opened on Monday.
While Mr Walker worked at Crown as a senior employee between 2014 and late 2017, he had dealings with Mr Gu aimed at encouraging him to gamble large amounts.
Cor Cordis’s investigations into the collapse of the $600 million iProsperity property group has so far traced $8 million of clients’ funds wired by Mr Gu or Mr Huang to Crown Casino up until 2017. Casino sources said the pair’s use of iProsperity company accounts to gamble at Crown was a clear indicator of fraud and money laundering, a fact Crown acknowledged in July warranted investigation when it called an inquiry into Mr Gu’s activities at the Melbourne casino.
After Mr Walker left Crown and joined The Star, Mr Gu, Mr Huang and another senior iProsperity employee began gambling at The Star. Between 2018 and 2020, Mr Walker used his position at Star to encourage Mr Gu and Mr Huang’s gambling, while simultaneously having secret talks with Mr Gu in which Mr Walker was asked to head an arm of a new gaming business Mr Gu intended to launch.
Several sources with knowledge of Mr Gu’s business activities said they included a proposed Chinese high-roller tour business at The Star that would minimise Mr Gu’s tax exposure, as well as the purchase of the Canberra Casino, a casino in Vanuatu and a Chinese high-roller tour company known as a junket.
The sources said that in early 2019, Mr Gu met with Mr Walker and another Star employee and told them about his desire to begin a junket business. Around the same time, Mr Gu offered Mr Walker a job running his casino business. There is no suggestion Mr Bekier or any other Star Entertainment executive knew of this job offer or Mr Walker’s other confidential dealings with Mr Gu.
Asked questions about his dealings, Mr Walker last week denied he had left Crown under a cloud, citing “personal reasons” for his departure. He terminated the call when this masthead sought to quiz him on his dealings with Mr Gu.
Company records show the Lamborghini-driving Mr Gu took out $21 million in loans using company money from iProsperity in the years before his sudden departure to Los Angeles in mid 2020. A further $1 million of company funds was used to purchase Vanuatu passports through the Pacific Island nation’s visa program. Other company money was used to buy luxury vehicles including a Rolls-Royce Wraith.
iProsperity was one of the biggest players in Australia’s significant investor visa scheme, a government-run program that fast-tracks residency visas for offshore citizens which is popular with wealthy Chinese people.
A lawyer representing iProsperity investors has compared Mr Gu’s actions to Christopher Skase, a businessman who became one of Australia’s most wanted fugitives after he fled to Spain to live a life of luxury when his business empire collapsed.
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