Fugitive fraudster allegedly laundered millions at Crown Melbourne
The news just keeps getting worse for Crown Resorts, who are being asked to address claims that a fugitive fraudster has laundered millions of dollars through its Melbourne casino.
The Age reports that liquidators investigating the collapse of Michael Gu’s $600 million iProsperity property group found at least $8 million of clients’ funds were moved to Crown Casino via company accounts.
Mr Gu then either withdrew the money or used it for gambling.
Crown’s decision to call an inquiry into the allegations came within hours of The Age sending questions to the casino operator about the transactions.
Sources familiar with the transactions said they had the hallmarks of money laundering, which involves a person trying to conceal the illicit origin of money that is stolen or earned via criminality.
Passing dirty funds through a casino can make it appear as if they are the product of gambling, concealing their tainted origin.
Pressed on why Crown had not reported fugitive fraudster Mr Gu’s dealings with its Melbourne casino to the ongoing Victorian royal commission on the company’s suitability to hold a casino licence in the state, a spokesman said the matter would be addressed.
“We are treating this matter seriously and have immediately launched an investigation into the allegations.
“Crown will ensure regulators, the royal commissions and other relevant authorities are informed and updated as required,” Crown said in a statement.
iProsperity liquidator discovered millions transferred to casino
Crown’s licence for its new Sydney casino was suspended after an inquiry in New South Wales found it enabled money laundering in its bank accounts, while a Victorian royal commission reviewing its Melbourne casino licence unearthed a separate money laundering scandal in recent days.
The Western Australian government also called a royal commission to investigate Crown Perth’s casino following the NSW findings.
The scramble by Crown to deal with the allegations came after it was confirmed that Mr Gu repeatedly transferred large sums of money from the accounts of property group iProsperity to accounts at Crown.
In a recent report to creditors, liquidator Cor Cordis has identified that at least $8 million was sent to a casino, confirmed by sources to be Crown, by the fugitive fraudster or his business partner between August 2014 and May 2017.
The liquidator’s report also reveals Crown and Mr Gu were in email contact and that tax authorities had separately questioned iProsperity about its dealings with casinos.
Mr Gu fled the country in August 2020 amid allegations he dudded investors by claiming to be buying a portfolio of Australian commercial property worth hundreds of millions of dollars.
The iProsperity group collapsed in July 2020 owing creditors $325 million.
Company records show the Lamborghini-driving Mr Gu took out $21 million in loans using company money in the years before his sudden departure to Los Angeles.
A further $1 million of company money 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.
While primarily headquartered in Sydney, iProsperity had extensive Melbourne operations including a large office at 120 Collins Street.
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 and is popular with wealthy Chinese people.
It is unclear whether the Victorian royal commission will have adequate time to consider Crown Casino’s dealings with Mr Gu, given its reporting deadline of October.
Public hearings in Victoria’s Crown royal commission are due to conclude on July 9.