The Jockey Club report presented Martin with a dilemma. The Brisbane lawyer knew how important Suncity was to Star. The relationship, which deepened after competitor Crown pulled out of the junket market when 19 employees and contractors were arrested in China in 2016.
In fiscal 2016, Suncity customers spent $918 million at Star. In 2019 it was $5.9 billion.
Known as Chau Cheok Wa in China, Chau Star provided checks for gambling chips. Its customers were allocated a private gaming room called Salon 95 at Star’s Casino across from Google’s offices in the Sydney suburb of Pyrmont. Suncity received a commission for every dollar wagered.
Martin must have realized, according to ASIC, that Star risked serious legal trouble if law enforcement found it was working with known or suspected criminals.
Buchanan’s report had got around. Hong Kong police had a copy. So did Hong Kong’s independent anti-corruption commission, the Australian Criminal Intelligence Commission and the Australian Federal Police.
With her access to the board and other senior executives, Martin would have been able to voice concerns about Suncity. Instead, according to the ASIC lawsuit on which this article is based, she allowed her business to continue.
Martin, who could not be reached for comment, studied law at Queensland University of Technology and was an attorney at King for six years & Wood Mallesons, according to her LinkedIn profile. She joined Tabcorp in 2005 as an attorney in Queensland.
She stayed with Star when it spun off from Tabcorp in 2011, the same year Star’s relationship with Suncity began. Martin became Star’s Attorney at Law a year later. She was also company secretary, which involved her in board decisions about the junket operator.
In February 2018, she sent Star’s directors a proposal to increase Chaus’s loan from $50 million to $80 million. Suncity has never disputed or failed to pay any bills, she said. The proposal, which did not discuss Chaus’s integrity, passed unanimously.
Three months later, a non-Suncity customer walked out of the Suncity playroom in Sydney with $45,000. The room was reserved for Suncity members and a Suncity employee refused to reveal the identity of the person.
In response, Star’s investigators began watching Suncity more closely than normal. The results of the so-called Operation Money Bags were emailed to Martin on May 17 by Andrew McGregor, Star’s lead investigator.
According to McGregor, cash was delivered to the gaming room in backpacks and suitcases. It was unclear who owned it.
New procedures have been devised to cover in-room gambling. Martin stopped by in person a few weeks later and spoke to a Suncity manager. She then raised the matter with Bekier, the chief executive officer, although the ASIC lawsuit doesn’t specify what they said.
About a week later, Star extended the trading agreement with Suncity on the condition that its players bet at least $100 million per month.
In May 2019, Martin wrote to Star’s board of directors that an audit of the Suncity space’s operations revealed “no material issues,” according to the ASIC lawsuit.
Two weeks later, McGregor, the investigator, briefed Martin on Operation Money Bags. Police questioned several Suncity employees and customers, he wrote in an email, confiscated cash and gaming chips from people at the casino and charged them with money laundering and using proceeds of crime.
He reported that Suncity was not honoring its agreement with Star on handling cash and chips, six of its members or employees could be banned from the Sydney Casino by police, Suncity employees appeared to be deliberately trying to cover up surveillance cameras in the casino room, and they had arrived in the room with hidden cash.
Other star executives also expressed concerns about Suncity to Martin. In the second week of June, Buchanan advised her star to step up its “rather rudimentary” background checks of junket operators.
On July 23, Buchanan, who was checking the junkets, emailed Martin that he had met with an Australian Federal Police superintendent. They discussed Suncity’s attempts to legitimize its business and “cover up its criminal ancestry,” he said.
A few days later Age, That Sydney Morning Herald and 60 minutes reported money laundering allegations against Crown Resorts, based in part on the Hong Kong Jockey Club report. The media said Suncity had been banned from the racing club for alleged links to triad gangs. An article reported that Chau was barred from entering Australia by the federal government.
Board meeting in case of emergency
According to the Crown reports, Martin attended an emergency board meeting. Directors urged her and other Star executives to update her on her discussions with regulators.
Around August 13, Star told Suncity that its gaming room would be closed but that its business could “otherwise continue as usual” at Star casinos in Sydney and the Gold Coast, according to ASIC.
Two days later, Martin submitted a paper to the Star board on the Crown’s allegations. The paper was packed with information. But an addendum listing Star customers cited in the media reports made no mention of Chau or Suncity, according to ASIC.
ASIC’s detailed allegations against Martin, who resigned from Star on May 6, span seven pages of the lawsuit. The regulator claims she failed to act with “due care and diligence,” a breach of civil law that could see her banned and fined as a director.
Chau was charged in Macau with 286 offenses including money laundering and gambling fraud. His trial ended a week ago. The verdict is expected to fall on January 18th.