Crown yet to internally review arrest of 19 staff in China

by Mia Chapman Last Updated
Independent report shines light on Victoria’s gambling regulator

An internal investigation into the arrests of 19 Crown Resorts employees in China has still not commenced, the Victorian royal commission into the casino operator has heard.

The Australian Financial Review reports that the NSW Bergin inquiry, completed in 2020, recommended that a “good look back” into the saga was worthwhile.

Victoria’s royal commission has heard that Crown Resorts sat for a year on advice that it was not properly vetting junket operators for links to organised crime before banning them last year.

Commissioner Ray Finkelstein questioned Crown’s ability to overhaul its profit-driven culture, which fostered “systematic, long-term breaches of the law”, facilitated illegal conduct by third parties and lacked candour in dealing with government.

Counsel assisting Penny Neskovcin relayed to the commission Ms Coonan’s evidence to the NSW inquiry when she said it “may be beneficial” to have a “good look back” at the China arrests because there were “lessons to be learned from the past”.

But Crown’s chief risk officer, Anne Siegers, said neither Ms Coonan nor the board had instructed her to undertake an analysis into the 2016 arrests, which included three Australians, for allegedly recruiting Chinese high rollers to gamble at its Australian casinos.

“Has anyone ever asked you, after the NSW inquiry, to undertake that root cause analysis?” Ms Neskovcin asked.

“On the particular China arrests? No,” Ms Siegers said.

Hired by Crown in December 2017, Ms Siegers said she had just “scanned” the report on the 2016 arrests by the Victorian Commission for Gambling and Liquor Regulation and told the commission that by the time she joined Crown it was “too late for me to do a root cause analysis.”

“A review could be undertaken now,” Ms Siegers said.

“But we would not get the full benefit, as four or five years have passed.”

Involvement with Crown Resorts junket operators in the spotlight

On May 18, the VCGLR released its report, slamming Crown for being “unnecessarily belligerent” and slowing its inquiry into the arrests, which it ultimately blamed on Crown’s “deficient” risk management and governance structures.

On the same day, the watchdog told the inquiry Crown Resorts “lied about what they were aware of and what they weren’t” during interviews about the arrests.

It was revealed that Crown knew its junket due diligence process was not sufficient a year before it banned high-roller tours in August 2020.

An FTI Consulting report commissioned in August 2019 by Crown’s former lawyer, Richard Murphy from MinterEllison, warned that the casino group’s vetting processes were not up to scratch.

A similar report was produced in 2020 by Deloitte and was the basis of the decision to axe junket tours.

It was revealed during the Bergin inquiry that Crown facilitated hundreds of millions of dollars in money laundering via criminal-linked junket tour operators such as triad-linked Alvin Chau’s Suncity for at least five years to 2019.

Ms Siegers, who had not seen the FTI Consulting report until last week, agreed it showed “significant gaps” in Crown’s vetting process.

Ms Neskovcin pointed to redacted minutes to show FTI’s report was mentioned or tabled at a meeting of Crown’s “brand committee” in September or October 2019.

The committee counted Ms Coonan and director Jane Halton as members.

It was set up to manage the fallout from media reports of money laundering and organised crime at the casino.

“Therefore the report did not come to the attention of at least some board members at that time,
Ms Neskovcin said.

“Do you agree with me that, having occurred…there was a failure of the risk management process at Crown in respect to the FTI report?”

Ms Siegers said: “I would agree there was a failure there” if the report was tabled.

In April, the VCGLR issued Crown with a $1 million fine for partnering for eight years with high-roller junket operators linked to criminal triad gangs.

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