Australia's corporate watchdog has launched legal action against past and current directors and executives of casino giant The Star Entertainment, following public inquiries into its NSW and Queensland operations.
The Australian Securities and Investments Commission (ASIC) announced on Tuesday it has begun civil proceedings in the Federal Court against 11 people linked to the company.
They include former chair John O'Neill, ex-chief executive Matthias Bekier, Kathleen Lahey, Richard Sheppard, Gerard Bradley, Sally Pitkin, Ben Heap and Zlatko Todorcevski.
It will be alleged in court that board members breached their duties under the Corporations Act between 2017 and 2019.
ASIC deputy chair, Sarah Court, said it is alleged board members "failed to give sufficient focus to the risk of money laundering and criminal associations, which are inherent in the operation of a large casino with an international customer base".
ASIC alleges board members approved the expansion of Star's relationship to individuals "with reported criminal links", putting the company at risk of money laundering.
It is also alleged that board members did not take steps to prevent the potential for money laundering even when notified of those "critical risks".
ASIC said this constituted a "breach of their director duty obligations".
Ms Court said ASIC was seeking from the court declarations of contraventions, the imposition of penalties and disqualification orders in relation to individuals who were "at the peak" of the organisation.
"This court case really deals with who are the people that should be held accountable for these [alleged] significant governance failures," she said.
"Individuals that have engaged, if ASIC's case is made out ... in conduct of this kind should not be appropriately able to act as directors for other companies."
Each alleged breach carries a maximum penalty of $1.05 million.
In a statement, Star noted court proceedings "concern matters which were the subject of regulatory inquiries in New South Wales and Queensland".
"The Star and its subsidiaries are not parties to the proceedings."
Earlier this year, Star's Sydney operation was fined $100 million by the NSW Independent Casino Commission following allegations of money laundering, organised crime links and fraud.
A separate inquiry in Queensland also found "serious deficiencies" in Star's anti-money laundering practices.
The Star's relationship with Asian gambling junket Suncity has become a focus of ASIC's allegations.
Suncity generated $5.9 billion alone in turnover for the Star in 2019, making it the casino's biggest junket.
ASIC alleges Mr Bekier, former company secretary and group general counsel, Paula Martin, and ex-chief casino operator, Greg Hawkins, did not address money laundering risks associated with the junket.
It was also alleged they breached their duties by not escalating those risks to the board.
Mr Bekier is facing seven breach allegations in total, the most of former and current board members.
Ms Martin and Star's former chief financial officer, Harry Theodore, are also accused of allowing misleading statements to be provided to the National Australia Bank (NAB) regarding the use of China Union Pay (CUP) debit cards at the casino.
"Those statements disguised the fact that Star was permitting CUP cards to be used for gambling, which was prohibited by CUP," ASIC said in a statement.
"ASIC is aware over $900 million was obtained by Star customers using CUP cards in NAB ATMs from 2013 to 2019."
A NSW inquiry, led by Adam Bell SC, this year found the Star unsuitable to hold a casino licence in Sydney.
Its license was suspended in October and the company was ordered to pay a $100 million fine.
The company, now under an independent monitor, has committed to restoring itself to "suitability" and has been operating under a temporary licence.
