The inquiry heard Crown received a due diligence report on Mr Chau in April 2016 that warned the US government considered him to be involved in organised crime, while a separate May 2016 dossier warned that he appeared to be a former member of the “14K Triad” in Macau under the leadership of notorious gangster Wan Kuok-koi, also known as “Broken Tooth Koi”.
And in June 2017, the anti-money laundering agency AUSTRAC contacted Crown asking it to explain how it considered its partnership with Mr Chau to be appropriate.
The hearing was shown footage leaked by independent federal MP Andrew Wilkie showing large bundles of cash being exchanged for betting chips inside Suncity’s private room at Crown Melbourne, which Ms Sharp said acted as an “island of immunity” from Crown’s anti-money laundering regime.
Mr Preston could not say if the incidents captured on film were ever reported to AUSTRAC due to uncertainty around when the events precisely took place.
Crown had additional “controls” put in place for Suncity after March 2018 when management discovered $5.6 million in cash stored in a cupboard at its exchange desk. Mr Preston said that was “an inordinate amount of money” and triggered concerns the room was being used to launder dirty cash.
However, none of those events prompted the senior management group responsible for vetting junkets – consisting of Mr Preston, Crown’s Australian resorts boss Barry Felstead and non-executive director Michael Johnston – to consider ending its partnership with Suncity.
“There was activity there I was not comfortable with, that’s why we put controls into place,” Mr Preston said.
Mr Preston said he had more recently recommended that Crown reconsider working with Suncity, based on a “holistic history” that took into account the “various allegations”, due diligence warnings and “recent incidents” at Crown.
The hearing was also shown a 2015 email from a senior member of Crown’s international VIP division, Ari Lee, to other Crown staff regarding junket partner Ng Chi Un, who operated the so-called “Hot Pot” junket that has links to a massive drug trafficking cartel. The email said Ng was a “very influential character” in Macau, particularly in regard to the “underground network”.
Mr Preston said he could not say if that was a reference to the underground banking networks used by crime syndicates and if it should have been a red flag for money laundering.
“That’s the only reasonable construction of this statement isn’t it,” Ms Sharp said. “Is there an underground railway network in Macau?”
“I just do not know,” Mr Preston said. “I do not know what that means. If I had seen this at the time, I would have asked some questions because that does not sound normal.”
The inquiry’s public hearings will continue on Tuesday.
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Business reporter at The Age and Sydney Morning Herald.