Two former senior executives of casino operator The Star Entertainment Group Ltd have been fined and disqualified from managing companies after an Australian Federal Court judge found they breached their duties in relation to money laundering risks linked to the casino firm’s dealings with the now-defunct junket operator Suncity Group Ltd.
The court on Wednesday imposed a fine of AUD700,000 (US$491,685) on Star Entertainment’s former chief executive and managing director Matthias Bekier, and AUD400,000 on former chief legal and risk officer Paula Martin. Mr Bekier was disqualified from managing corporations for six years, while Ms Martin received a seven-year ban.
The penalties follow a March ruling that found both executives had breached their duties under Australia’s Corporations Act by failing adequately to address anti-money laundering (AML) and criminal activity risks associated with Suncity, once identified as the casino group’s largest junket partner.
The country’s corporate watchdog, the Australian Securities and Investments Commission (ASIC), brought the case against the executives in 2022. At the time, it involved 11 past and present directors and executives of Star Entertainment.
Court documents cited by ABC News showed Star Entertainment’s turnover from Suncity was approximately AUD2.1 billion, AUD4 billion and AUD5.9 billion for the 2017, 2018 and 2019 financial years, respectively.
ASIC alleged that Mr Bekier and Ms Martin failed to respond appropriately to warning signs regarding money laundering risks and reports of criminal links involving Suncity and its funding arrangements.
The regulator also alleged Ms Martin permitted misleading information to be provided to National Australia Bank regarding the use of China UnionPay cards at ATMs located within Star Entertainment’s properties.
The statements were said to have concealed the fact that the cards were being used for gambling-related transactions, which was said to be contrary to UnionPay rules.
In his judgment, Justice Michael Lee said the sanctions were intended to protect the public interest and deter similar conduct by senior executives at listed companies.
“There is no tariff for governance failures within large publicly listed corporations, still less for failures occurring within enterprises carrying the unusual privileges and risks associated with casino operations,” he stated, as quoted by ABC News.
Justice Lee also said neither executive had demonstrated sufficient insight into the seriousness of their misconduct.
Management breaches
The court had previously found that Mr Bekier failed to address adequately findings in a report by financial consultancy KPMG that identified deficiencies in the casino firm’s AML controls and criminal-risk management processes. He was also found not to have managed appropriately the risks arising from Star Entertainment’s relationship with Suncity.
Ms Martin’s breaches included failing to advise the company’s board adequately about risks associated with the junket operator.
Suncity’s founder and former chief executive, Alvin Chau Cheok Wa, was arrested in Macau in late 2021 as part of a crackdown on cross-border gambling and money laundering activities linked to Macau’s junket sector. In 2023, he was sentenced to 18 years in prison.
Mr Bekier resigned from Star Entertainment in 2022 amid investigations into possible breaches of AML and counter-terrorism financing laws at the company’s casinos. Ms Martin also left the group that year.
Star Entertainment’s operations in the Australian states of New South Wales and Queensland were placed under state-government supervision in 2022, following reviews that found the company unsuitable to hold casino licences in those states.
Shareholders of Star Entertainment approved in June last year a AUD300.0-million rescue package, led by United States-based gaming operator Bally’s Corp, which is now the Australian firm’s largest shareholder.
In April this year, Star Entertainment said it had completed the disposal of its 50 percent equity interest in the Destination Brisbane Consortium, the owner of the site in Brisbane, Australia, where The Star Brisbane casino is located.
